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The globe’s consumer goods giants hit their highest growth levels for a decade last year amid a post-Covid resurgence according to the OC&C/Grocer Global 50.
The 2022 OC&C/Grocer Global 50 report found overall grocery revenues among the world’s largest 50 fmcg groups were up by 9.3% in their most recent collective financial years.
That surpasses the previous high of 5.7% in 2017 and marks a rebound from the Covid-suppressed growth of 1.1% in last year’s report.
Overall figures were boosted a strong rebound in the beer and spirits sector: the category’s revenues jumped 11% from a 9% decline in 2020.
However, there was also broad-based growth of 11% in the food and drink sector, as the global economy recovered from Covid and the hit to out-of-home consumption.
Companies saw strong average organic growth of 7.9%. Volume increases of 3.4% were accompanied by 4.5% price/mix growth as inflation started to flow through to pricing.
Gross margins remained broadly flat – edging back 0.1%. Adjusted EBIT margins improved 0.7 ppts to 19.1% as operational costs fell by 0.8 ppts.
However, pressure on margins is likely to increase as global players face soaring inflation.
“The Global 50 have barely had time to catch their breath from Covid before facing yet another crisis in the form of inflation, said OC&C partner Claire Dannatt.
“Whilst consumer goods should be more resilient than most areas, there is deep uncertainty about how the disposable income squeeze will impact behaviours and for how long.”
She said global players face having to simultaneously juggle managing pricing and protecting the bottom line in the short term, while remaining focused on wider, medium term portfolio and brand strategy.
“The rebound in the last year means they face these challenges with stronger businesses than might have been expected, but a volatile environment will still create winners and losers,” she said.
“The triumphant will be those who best pivot to meet emerging consumer and retailer needs, whilst also securing reliable, economical and sustainable supply.”
The index itself was topped again by Nestlé, with global sales of $95.3bn.
New entrants included Shiseido and Carlsberg, with Saputo and Meiji dropping out.
See thegrocer.co.uk/finance later today for the full table and Global 50 feature.
Morning update
UK consumer confidence has slumped to a new record low amid soaring inflation and pressure on consumer budgets.
GfK’s monthly Consumer Confidence Index fell to -49, which is the index’s worst score since records began in 1974.
The September measure easily surpasses the -39 recorded at the peak of the 2008 financial crash and is five points worse than the previous record set last month.
Confidence in personal finances over the coming 12 months fell nine points to -40, while confidence in the general economy over the next 12 months slumped eight points to -68.
GfK client strategy director Joe Staton commented: “Consumers are buckling under the pressure of the UK’s growing cost-of-living crisis driven by rapidly rising food prices, domestic fuel bills and mortgage payments.
“Today’s mini-budget, and the longer-term agenda to drive the economy and help rebalance household finances, will be the first major opportunity to deliver that improvement. It will also be a major test for the popularity of Liz Truss’s new Government.”
On the markets this morning, ahead of today’s ‘mini-budget’ the FTSE 100 is down another 0.6% to 7,116.6pts.
Fallers include THG, down 4.4% to 40p, Naked Wines, down 2.7% to 86.7p and Coca-Cola HBC, down 1.9% to 1,907.5p.
Risers include McBride, up 3.3% to 24.8p, Bakkavor, up 2.9% to 89.6p and Haleon, up 2% to 271.2p.
Yesterday in the City
The FTSE 100 slumped 1.1% yesterday as the Bank of England raised interest rates by 0.5%pts.
PZ Cussons rose 2.1% to 199.2p after posting better than expected profits and organic growth for the second successive year, with strong growth in Q1.
Fallers included Deliveroo, down 6% to 84.1p, Just Eat Takeaway.com, down 4.4% to 1,338p, Science in Sport, down 3.9% to 24.5p, Bakkavor, down 3.3% to 87p, Ocado, down 3% to 557.6p, Glanbia, down 2.5% to €11.80 and Coca-Cola Europacific Partners, down 2.5% to €47.05.
Risers included FeverTree, up 2.7% to 937p, Coca-Cola HBC, up 2.3% to 1,944.5p, Kerry Group, up 2.2% to €97.04, Virgin Wines, up 2.1% to 49.5p, Finsbury Food Group, up 2% to 78.5p and AG Barr, up 1.6% to 503p.
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