Large CPG Manufacturers Are Losing Market Share to Private Label and Extra Small Companies

May 21, 2020

This article is included in these additional categories:

Brand-Related | CPG & FMCG | Industries | Top Brands

IRIBCG US CPG Channel Growth 2012 2019 May2020US CPG dollar sales saw a 2.2% rise year-over-year in 2019, continuing steady growth since 2017, according to a recent study [pdf] from IRI and Boston Consulting Group (BCG). Private label and extra small companies were drivers of growth last year with large companies seeing their market share decline.

Year-over-year the 2.2% growth in CPG dollar sales is up from 2% growth in 2018, and 1.4% in 2017 (the lowest since 2011). Volume decreased year-over-year by 0.3%, but a rise in price/mix from 1.9% to 2.5% allowed for overall growth. Note that these figures do not include all online revenues, which may be important given that CPG e-commerce growth has been far greater in percentage terms.

Private label and extra small companies were the fastest growing in 2019, each seeing a percentage uplift of 3.9%. Private label and extra small CPG manufacturers increased their market share to 15.6% (up 0.3 points) and 9.7% (up 0.2 points), respectively, while large manufacturers saw the smallest revenue growth (1.0%), with their market share falling by 0.6 points to 46.6%.

This movement shouldn’t come as a surprise, as previous studies have shown that Americans have been increasingly turning to private label products, even among affluent groups.

BCG/IRI used a composite growth index measuring dollar sales % change, volume sales % change and dollar share point change to calculate the standout companies in three size categories:

Large Brand (>$5.5B sales) Growth Leaders

  1. Constellation Brands
  2. Johnson & Johnson
  3. Tyson (new to list versus 2018)

For the #1 large brand growth leader Constellation Brands, beer was the top growth category, with Modelo sales increasing by $380M and Corona sales up by $118M year-over-year.

Other top growth categories were skincare for Johnson & Johnson, with growth in brands like Neutrogena (+$90M) and Tylenol (+$86M), as well as frozen breakfast food for Tyson, which owns brands such as Jimmy Dean (+$166M).

Mid-Size Brand ($1.0-$5.5B sales) Growth Leaders

  1. VPX
  2. Juul
  3. Mark Anthony Wine & Spirits (new to list versus 2012-2018)

Two other mid-size CPG firms new to the top 15 for 2019 were Chobani (#6), Hostess (#9) and Reynolds (#12).

Small Brand Growth Leaders ($100M-$1B sales)

  1. NJOY (new to list versus 2012-2018)
  2. BODYARMOR
  3. Rana

Here, Old Trapper (#11) and Fairlife (#13) were new small-sized firms for 2019’s rankings.

Read the full study here.

About the Data: Based on IRI data for multi-outlet and convenience, excluding e-commerce, though select click & collect is covered.

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