Alcoholic beverage company Constellation Brands was the top growth leader for large companies in consumer packaged goods, according to Boston Consulting Group (BCG) and IRI’s annual US CPG study. Constellation led the category for the third year in a row.
Constellation’s number one growth category in 2019 was beer, with its Modelo brand seeing year-over-year sales growth of $380 million, while Corona saw sales rise by $118 million in the US. And more recently, the coronavirus outbreak hasn’t dampened Corona’s sales nor damaged its brand, according to Constellation’s CEO Bill Newlands. He told Yahoo Finance earlier this month that its recent data show the brand is “up over 20%.”
Rounding out the top five large CPG growth leaders were Johnson & Johnson, Tyson, General Mills, and Procter & Gamble. All of the leaders saw sales volumes increases in 2019, except for P&G.
The US CPG industry increased by 2.2% in 2019, outpacing the 2% growth seen in 2018, according to the report. This was due to pricing adjustments, as average sales volumes actually decreased.
Leading mid-size firms included sports drink maker VPX and e-cigarette manufacturer Juul, while top-growth small firms included e-cigarette manufacturer NJOY and sports drink company BodyArmor. So e-cigarettes and sports drinks were clearly high growth CPG products in 2019.
According to the BCG/IRI report, acquisitions have been driving growth in the category in recent years. “Over the past five years, a mix of acquisitions and portfolio shaping has driven growth among both large and small CPG companies,” said BCG managing director and partner Aman Gupta. “Acquisitions made by Tyson in the past five years account for 85% of its 2019 growth and 53% of its overall portfolio. While CPG companies are using a variety of tools to sustain growth, interest in acquisition seems to be on the rise even among smaller players.”
The other main levers for growth identified by BCG include careful pricing changes, e-commerce emphasis, and products capitalizing on emerging consumer trends. The top trends are multifunctional beverages; protein-on-the-go; premium self-care; better-for-you snacking; simple and transparent ingredients; and products focused on the Hispanic market.
“Based on the results of our 2019 Growth Leaders study, we expect that small, medium, and large companies that leverage these emerging trends will be well-positioned to capture growth in the years to come,” said Krishnakumar S. Davey, president of strategic analytics for IRI. “Some of the trends (e.g., protein-on-the-go, better-for-you snacking) and categories (e.g., candy) of 2019 winners are challenged in these turbulent times.”
According to Davey, the emerging data seems to point to smaller companies gaining more than larger companies during the Covid crisis thus far, and especially those in “stock-up” categories.