‘It is not enough that we do our best, sometimes we must do what is required‘
– Winston Churchill
Many reached out to get our views on 2018. Now that all financial reports, market data, and M&A statistics are finally available, here is our take. It is a rather long and rich article but hopefully insightful and actionable. Get yourself a good cup of tea, sit comfortably in your armchair and enjoy the read.
1) An unprecedented wave of CEO replacement and a clear mandate for Growth
Almost 50% of the world largest FMCG companies (with greater than $4bn yearly revenue) changed CEOs over the last 30 months (16 new CEOs exactly) and it is not over as more changes will come soon (RB, L’Oreal…)
Almost 50% of the world largest FMCG companies (with greater than $4bn yearly revenue) changed CEOs over the last 30 months (16 new CEOs) and it is not over as more changes will come (RB, L’Oreal…). This percentage culminates to 66% on the Food & Beverage vertical, the vertical the most impacted by under-performance over 2015-17. Considering the average tenure of a FMCG CEO is a decade, that’s an unprecedented change. Many of those new leaders have been given a clear mandate for Growth to stop the ‘shrinking-to-glory’ spiral (more on this here) and have initiated a shift towards a more Consumer Centric Growth Strategy (e.g. Mondelez, Nestle..:) (more on Consumer Centric Growth Strategy Here). We saw early results in 2018 (see below)
2) A rebound of growth for the largest FMCGs in 2018 but on average Growth Gap remains and currently translates the inability of most FMCGs to address current fragmented growth opportunities and renew competitive advantages in a declining barriers-to-entry context
We took the top listed FMCG companies (annual revenue greater than $4bn, 34 companies across the whole FMCG spectrum excl. tobacco), compiled their organic growth and used Euromonitor data to measure their Growth Gap. Few stand-out:
i) On average (the situation changes drastically from one vertical to another – more on this on the next point) there is clearly no Growth Scarcity within the current FMCG market(total growth at 5.1%) but there is a stable growth gap since 2012 of on average ~200 bps
ii) Not only there is no Growth Scarcity but the current FMCG market can be also greatly enlarged (think consumers willingness to pay for complementary services on specific occasions or even retail forward integration – e.g. P&G foray into laundry on-demand – Tide Dry Cleaning initiative, ABI acceleration on alcohol on-demand delivery – Rappi, Ze Delivery acquisitions; L’Oreal opening of a new retail format in France with the Drugstore Parisien …)
iii) In this Abundance context, we see fragmentation (country, channel, consumer needs, consumer path-to-purchase…) as one of the key driver (not the only one but a critical one) explaining the large FMCGs average under-performance vs. the market
iv) This fragmentation will only accelerate as the growth rate behind those fragmentation drivers remain high and the share of developing markets, e-commerce, convenience… continue to increase in the overall FMCG industry. So if today this fragmentation is already a challenge, we have seen nothing yet
v) This fragmentation represents both an unprecedented risk for sub-scale (distant #2 and beyond), undifferentiated brands playing on low emotionally involving categories and a formidable opportunity for ALL the others
vi) Beyond fragmentation, the key topic is the falling barriers-to-entry (triggered by the accelerated channel shift but not only) that is the key driver in deflation and growth fragmentation (rise of small players) – (more there – Article obsolescence of competitive advantages)
vii) To address those challenges, FMCG leaders must start thinking dynamically in share of growth over a 3-5 year time-frame, not in absolute growth amount. They need also to move from a ‘top 3 priority’, ‘set in stone’ strategy to a dynamic strategy focus on a dozen or so micro-battles across the Core Business and New Businesses under the umbrella of a purpose-driven, ‘ownable’ and actionable mission statement (more on this in a next article) and with a clear view on the strategic enablers (organization & talent, M&A, technology…)
To address those challenges, FMCG leaders must start thinking dynamically in share of growth over a 3-5 year time-frame
Tackling the topic on how to renew competitive advantages in the digital disruption age is clearly critical and goes much beyond the scope of this article. We will publish an article in Q2 to cover this topic
3) This Growth Gap varies greatly across and within each vertical
If the total FMCG industry average growth gaps amount to 190 bps in 2018, it varies significantly across verticals. Household, Consumer HealthCare and Food & Beverage display the largest growth gaps whereas large beauty and alcoholic drinks FMCGs perform almost in line with their respective global market. Few comments there:
i) Geographic footprint: considering that on average 50% of the FMCG market value sits in developing markets, having a strong footprint in emerging markets is a competitive advantage. If Unilever, Coke, MDLZ and Colgate to name few are greatly exposed to developing markets (>40% of their NR), most FMCGs suffer from an unfavourable (e.g. RB HyHo, P&G; Henkel HPC are in the 20-30% range) or even extremely unfavourable (PepsiCo, Kraft-Heinz, GeneralMills, Kellogg’s, Campbell’s – <20% of their NR) footprint. We see geographic footprint as the #1 driver behind the Growth Gap, especially on the Food and Household verticals
ii) Food: beyond geographic footprint, channel fragmentation (rise of away-from-home), the rise of private labels, increasingly fragmented consumer needs and management attention over-focused on bottom-line over 2014-17 have been the key drivers in our view of this growth gap. 2018 has been a turning point with growth acceleration witnessed at almost all players. 2018 winners on F&B: Nestle, MDLZ, PepsiCo, Coke with all revenue organic growth >2.5%. Losers (again): Kellogg’s, GenMills, KH, Hormel, Campbell’s with flat growth rate – KH specific case is detailed further down
Beauty and Personal Care: As often average lies. The excellent performance of the vertical is mostly exclusively driven by the Luxury segment (as it is often the case in a growth cycle and represents 67% share of growth of L’Oreal in 2018 and >100% for Coty), the overall being greatly driven by China. Mass (increasing deflationist pressure, channel shift to online and owned retail, masstige and cost leaders new entrants) and Professional beauty (increasingly obsolete business model with eroding price/ assortment advantage vs. other channels) continue to face structural challenges. Winners: L’Oreal, LVMH Beauty, Estee Lauder, Beiersdorf with all organic growth >5% (EL and LVMH Beauty were remarkable stand-out with respectively +12% and +14%). Losers: Coty (still penalized by the P&G Beauty integration and hit by logistics one-offs – more on Coty and JAB below) and Henkel Beauty (unfavorable category and geographic footprint, inability to address fragmented consumer needs as witnessed the recent recall in France of its newly launched organic range NAE)
iv) Household: P&G, RB, Unilever, Church & Dwight clearly outperformed (>4% growth) whereas Henkel, Kao, Colgate, Kimberly Clark all lost shares (0-2% growth) in what looks increasingly like a costly zero sum game (driven by promotion and A&P) played mostly in a shrinking backyard (developed markets) with an increasing cost of doing business (increasing deflationist retail pressure). In this context, unsurprisingly, 67% of Household FMCG units witnessed a profit erosion in 2018 (more on this on the next point). FMCGs with the highest capital intensity/ share of fixed costs have been the most exposed (e.g. paper segment – specifically Kimberly-Clark that saw its EBIT moving from 19% to 12% over 2016-18)
It looks increasingly like a costly zero sum game (driven by promotion and A&P) played mostly in a shrinking backyard (developed markets) with an increasing cost of doing business (increasing deflationist retail pressure). In this context, unsurprisingly, 67% of Household FMCG units witnessed a profit erosion in 2018
iii) Consumer HealthCare (CHC): As predicted last year (cf. article – ‘Is Consumer Health Doomed?’), everyone declined to acquire large consumer health assets at current valuation (Novartis, GSK, Pfizer – although P&G tried a bold – but then rejected – $15bn offer on Pfizer CH) leaving no other option than to merge and spin-off some assets to realize value (e.g. GSK-Novartis CHC units). Large CHC FMCGs continue to underperform the market (1-3% growth in a market growing at ~5%) in what still remains the most fragmented vertical in the entire FMCG industry (large FMCGs hold collectively only 33% market share – Euromonitor). We see the channel shift to online as a key driving force to-date for growth fragmentation and deflation (especially on the least differentiated segments like VMS). We believe most of the hit is still ahead
Last but not least, we see as a key risk for CHC the slowdown of the infant milk market in China (~50% of global infant formula market and key growth/ profit engine for Danone, RB and Nestle), both driven by economic slowdown and demographic change. Opportunities remain to offset this decline (mix, go-direct…) but impact will likely be significant
4) Beware the China addiction
Re-balancing geographic source of growth (and profit) in the coming quarters remains high on the CEO agenda of some of the world largest FMCGs. Infant milk, beauty (especially luxury and skincare) and spirits are particularly concerned. We do not believe in a brutal downturn scenario in China but rather in a progressive slow-down calling nonetheless for active management
5) On certain categories, the profit leakage from large FMCGs through grocery retailers to hyper-scale players is already visible and ‘other things being equal’ margin resets will progressively take place across most verticals (although impact will vary)
Unsurprisingly the bottom-line picture mirrors the top-line picture with Household and CHC being the verticals that suffered the most from profitability erosion in 2018 with >2/3 of companies experiencing eroding profitability
We expect this profitability erosion to accelerate and spread across verticals (naturally the exposure varies considerably by company according to the category/ country/ channel footprint but there is a general trend) for 6 reasons:
i) By and large, FMCGs still hold the majority of profit in the value chain (75% vs. 25% for retailers)
ii) FMCG Net Revenue is the largest and most actionable item in the retailer P&L (considering the top 5 world retailers) accounting on average for 75% of retailer net revenue
iii) Grocery retailers (see below charts) have seen their profitability rapidly decliningover the last few years for few reasons: reinvestment in price decrease to keep up with more effective business models (discount, e-commerce), investment in store remodeling (from big to small boxes) and e-commerce/ IT infrastructure, dilutive e-commerce profitability (last-mile logistics…)
Carrefour France situation is a good illustration of those dynamics at work
iv) All of those drivers will only accelerate as Amazon scales-up its grocery operations in the coming quarters (cf. next section on Amazon) and legacy players will respond by reducing their prices, merging (e.g. Asda/ Sainsbury) or building new alliances (e.g. buying groups – Carrefour and Tesco partnership) to achieve economies of scale, increasing their share of private labels and cutting shelf space of the least defendable/ profitable categories (e.g. Household)
v) Deflation will not only impact developed countries but also developing countrieswhere fragmented trade will be consolidated at an unprecedented pace (starting in China) by virtual/ asset-light business models (we will develop more this point in our upcoming 2019-21 predictions article)
vi) Hyper-scale players (AMZ…) profitability will progressively increase (scale, new growth engines – cloud, marketing, private labels) and enable even more aggressive price reinvestment. It is already the case in the US for AMZ where its ecommerce operation profitability has greatly increased and is almost at par with Walmart US profitability
To-date, Henkel, Colgate, Kraft-Heinz and Beiersdorf announced material margin rebasing. In addition, some FMCGs like PepsiCo already clearly lowered their profit expectations for 2019 arguing the need to reinvest to support growth. We expect that ‘as-is’ (without significant change in strategy and business model), this margin reset trend to accelerate. Over the short-term, we see Unilever, Danone and in a lesser extent RB as the most exposed because of their respective country/ category/ channel footprint
We expect that ‘as-is’ (without significant change in strategy and business model), this margin reset trend to accelerate
6) P&G: a dramatic rebound but structural questions remain
The performance improvement is dramatic (see chart below – more information on the P&G CAGNY 2019 presentation).
If it is unclear whether Peltz appointment played a role, we see a clear strategic inflection point in 2018
i) M&A acceleration: P&G spent $4-5bn in acquisitions in 2018, an unseen amount since 2004-2005 and Gillette/ Wella
ii) Consumer Health as a key target: The acquisition spend could have been a lot higher if Pfizer would have accepted the $15bn offer for its CHC unit. P&G however still managed to scoop Merck CHC unit for $4bn. Joe Jimenez (former Novartis CEO appointed to the Board in Dec ’17) may well have played a critical role in those two moves
iii) Tapping (finally) into DTC/ digital native brands: finally, P&G decided to move forward and pulled the trigger on a number of deals with the objective to hedge exposure (Walker on B&R, L. on FemCare) but also to take advantage of growth opportunities on unaddressed product segments (First Aid Beauty, Snowberry) and services (Pressbox as a key enabler to accelerate Laundry On-Demand)
iv) Addressing (finally) the emerging consumer needs: from Pampers Pure through Tide Pure Clean to Febreze One and the Burt Bee’s licensing deal, 2018 has been a clear year of acceleration for organic/ greener innovations at P&G
Despite those dramatic improvements, key questions remain:
i) Those performance were obtained in a context US recorded one of its strongest retail growth ever, can this be sustained with the upcoming downturn?
ii) Is the China growth (60% of P&G growth in 2018) sustainable in a slowdown environment considering competitors are all doubling down on Skin Care?
iii) What is P&G ability to implement the consumer price increase it communicated end 2018?
iv) How fast and how much now retail deflation will hit P&G in developed markets?
If the turnaround is dramatic, P&G footprint remains to-date one of the most exposed in the entire FMCG industry
7) 3G/ JAB: not dead, just mutating fast
Let’s start with 3G. A lot has been published and said over the last month, too much maybe and the least we can say is Kraf-Heinz latest performance was underwhelming (see below chart for a summary of key numbers). We took notice that the same observers that praised the 3G model 4 years ago, now are criticizing it without nuances. Let’s get few things straight:
i) ZBB is not the key cause of KH’s problems, its category/ channel/ country footprint is. 3G considerably under-estimated the vulnerability of KH (categories vulnerable to changing consumer needs, increasing retail pressure and private labels threat) at a time they planned the deal
ii) The Zero Based Mindset is and remains valuable if applied in a balanced manner
iii ) The more growth and profit are fragmented (across segments, categories, channels, countries) and barriers-to-entry are falling, the less a pure scale strategy is effective
iv) Incremental scale cannot be the response to hyper-scale (Amazon, Alibaba, now Walmart – see below). On KH alone, $80bn shareholder value was wiped out over the last 24 months. Following the same pattern, we see RB HyHo and in a lesser extent Colgate as the two assets to avoid to acquire, especially for Unilever and Henkel. We see a key risk of unprecedented shareholder value destruction through M&A if CEOs decide to ‘do more of the same’ (old category scale tactic) to address the new challenges ahead
Incremental scale cannot be the response to hyper-scale. We see a key risk of unprecedented shareholder value destruction through M&A if CEOs decide to ‘do more of the same’ (old category scale tactic) to address the new challenges ahead
Coming back to KH, we see the turnaround as an uphill battle. If recent bolt-on acquisitions and growth initiatives will not be enough to move the needle, we should not write-off (yet) KH though. We are about to enter a long downturn period, multiples will come down much faster than most believe as most US Food companies continue to struggle, KH stock price can only rebound and 3G just raised a new $10bn fund. Like it or not, 3G will continue to surprise most and no one should underestimate their capacity to reinvent themselves. Last but not least, let’s not forget that RBI (Burger King/Tim Horton’s – the other consumer company in which 3G has a major stake) has outperformed (+66%) peers (MCD +50%) and the S&P 500 (+47%) over the last 36 months
At JAB, 2018 has been a year also of underwhelming performance at their listed companies (Coty and RB) with an unprecedented game of Partners/ CEOs musical chairs at JDE, Coty, JAB and soon RB also. Few reasons to believe that 2019 will be the year of the rebound for JAB:
i) If Coty stock took a hit over the last 2 years ($16bn market cap evaporated), it seems that it has reached now a rock-bottom low impacted by many one-off hits and can only bounce back as showed the recent JAB decision to increase its stake from ~40% to 60% and the YTD ’19 stock performance. Structural challenges will not go away overnight though starting with the structural under-performance of the Consumer division, the expected slowdown in China and the increasing competition of digital native brands. Coty seems much less prepared for now than L’Oreal to address those challenges
ii) At RB, HyHo remains the key argument for value creation over the short-term as most believe that the value of the parts are greater than the whole. Unless many observers, we doubt that a strategic buyer (Unilever, Henkel…) or even a PE will in-fine strike a deal with RB despite HyHo recent strong performance (too vulnerable category/channel/country footprint and already extremely optimized P&L structure). We expect also RB to have limited appetite to break-down HyHo in smaller pieces or even to discount heavily the multiple. For now, we see a spin-off/ IPO as the most likely scenario (a la Indivior)
iii) On the coffee/ food & beverage retail vertical, it is difficult to assess performance as results are not disclosed. It seems that the strategy to consolidate FMCG suppliers with specialist retailers in an attempt to maximize profit over the end-to-end value chain is paying off as the Dr Pepper/Snapple deal suggests (more on this in the M&A section below)
iv) As expected, JAB has been opening a new front with the acquisition last month of a small vet clinic chain in the US. Hard to not see the partial replication of the current Mars PetCare strategy (see point below on Strategic Transformation Of The Year) especially knowing the background of most JAB partners. It is a clever move as it starts with what is the scarcest and most valuable piece of the entire eco-system. Expect a lot more acquisitions to follow in the next quarters on PetCare
As expected, JAB has been opening a new front with the acquisition last month of a small vet clinic chain in the US. Expect a lot more acquisitions to follow in the next quarters on PetCare
8) The end of the DTC arbitrage?
The first generation of DTC disruptors date from 2011-13 (think Dollar Shave Club, Harry’s, Beauty Counter, Younique, Honest and many more) and were greatly enabled by low cost digital marketing tactics
Although public data is scarce, we see the growth of those businesses now slowing down. Why?
For all those reasons, only the DTC businesses with the strongest organic traffic (high purpose, sticky consumer communities..) will ultimately survive whereas the other are condemned to ‘tweak’ their economics with no guarantee for success (e.g. flattening growth experienced in 2018 by DSC and its recent efforts to drive basket size to boost CLTV…). It explains also why the new oil is becoming so rapidly first-party data as the ability to reach for free/ cost effectively consumers is becoming the ultimate competitive advantage (more on this in our upcoming 2019-21 predictions article)
Only the DTC businesses with the strongest organic traffic (high purpose, sticky consumer communities..) will ultimately survive whereas the other are condemned to ‘tweak’ their economics with no guarantee for success
9) Walmart: becoming the next hyper-scale player
2018 will remain a memorable year for Walmart (WMT):
We summarized their last 3 years moves in our strategic response framework.
Few key take-away:
i) Be clear on where you have a right-to-win (or can develop one) and lean in. It is the case in the US for WMT as 90% of consumers live within 10 miles from a WMT store and the future of ecommerce on grocery is local-to-local. It is also a ‘too big to fail’ business accounting for 70% of its revenue
ii) Be clear where you do not have anymore a right-to-win (because of the winner takes it all dynamic of the market) or where you cannot defend anymore your position(insufficient resources left) and divest ruthlessly. Here mostly UK and Brazil
iii) Understand where are the most attractive white spaces for grab where you can develop a right-to-win at scale (India) or where you have balanced ambitions and need a partner (China, Japan)
iv) Reallocate rapidly capital/ resources and integrate on each transaction your ‘cost of not doing’. Most WMT M&As in the US were done at acquisition prices greater than ‘market price’, simply because it integrated the cost of not doing for WMT (e.g. $3bn on JET). Most called them crazy at the time but it is paying off. In the same way, they incurred a $4bn write-off on their Brazil divesture to Advent but it was a must-do. Speed and holistic view on the value at stake is critical
iv) When critical mass is met, diversify income streams and monetize grip over the path-to-purchase. Now that WMT has such a ‘consumer engine’ in the US with a so large source of organic traffic, they started to attract 3rd party sellers (marketplace model) and to launch copycats of successful business models without having to acquire them (e.g. DTC mattresses…). Unlike Target, WMT does not have to invest in Casper, it has now the consumers traffic and the tech. Most importantly, it is now about to scale-up its advertising services online and offline and replicate AMZ Marketing approach. It keeps also building up its media capabilities (cf. its $250m investment in EKO – more details here)
v) Build holistic (strategic and capitalistic) alliances to support your strategic intent (here mostly JD.COM). For example (non-exhaustive): WMT owns a 12% stake in JD (valued at ~$5bn, 2nd largest shareholder after Tencent) and co-invested $500m last summer in a local online grocery delivery player (Dada). There are many other examples of their collaboration with JD in China but also in the US
If WMT is far from having won the battle in the US (as AMZ is about to scale-up retail operation) and in India (where it faces strong competing intent – cf. specific point below on India), what is clear is that WMT case offers an interesting strategic blueprint for any FMCG companies willing to understand future-back risks/ opportunities assessment and corresponding strategic response
WMT case offers an interesting strategic blueprint for any FMCG companies willing to understand future-back risks/ opportunities assessment and corresponding strategic response
10) AMZ: 2018 was about monetization, 2019 will be the year to wage at scale the mother of all battles (Grocery)
In 2018:
i) AMZ struggled on Grocery and Fresh (full details there) online but also offline (revenue at WholeFoods were down 3%) and it confirms our long-standing belief that the grocery battle will be won through leveraging local stores as stock points (drive, local-to-local delivery…)
ii) AMZ more than doubled its profitability (and tripled profit) in 2019 (see chart below), mostly driven by Prime subscription price increase (+$20 per year) in the US, the rise in marketing revenue and the continuous growth in AWS
In 2019, we expect:
i) A dramatic push on brick and mortar retail in the US (3000 AMZ Go to be opened by 2021 and probably ‘dozens’ of supermarkets also in 2019 – more details here) but also in India with Build initiatives (plan to open 100 kiosks malls in 2019 – more details here) along with some key partnerships (still in talk with Future Group to take a 10% stake)
ii) The launch of traffic building private labels even on categories with extremely unfavorable economics (e.g. on dairy – more details here) and a push to accelerate the launch of private labels on the most profitable/ e-commerce categories (e.g. on skin care – more details here)
iii) An increasing pressure to monetize its grip over the path-to-purchase with advertising
11) The battle of India has (now really) started and the winner may surprise few
From SoftBank through Naspers to AMZ/WMT/Alibaba, we see rightfully a rising interest in India. Few thoughts:
i) Grocery will be the ‘mother of all battles’ (sheer size) and even more than anywhere else, the local fragmented convenient stores will become the most valuable assets in the entire ecosystem to enable at scale and profitably e-commerce with New Retail business models
ii) If AMZ/WMT/BABA/RELIANCE have each different assets and strategies (chart below), we see brick and mortar retail becoming a key strategic focus for all of them
iii) Looking at all parties in presence and their respective assets, we believe that RELIANCE has a real right-to-win (it provides already Internet to ~300m consumers, it owns diversified retail assets on e-commerce friendly categories – apparel, consumer electronics, it is currently executing a plan to connect at scale 1.2m kirana stores – 10% of the overall kirana stores)
iv) Impact on FMCG companies will be gradual yet profound. The biggest one being the increase in the cost of doing business (sell-in price deflation, advertising inflation) and the proliferation of private labels that will reduce significantly FMCGs structural profitability (+/- 500 bps according to our research). Strategic plays remain for incumbents though (more on this on a specific article focused on India)
Impact on FMCG companies will be gradual yet profound. The biggest one being the increase in the cost of doing business (sell-in price deflation, advertising inflation) and the proliferation of private labels that will reduce significantly FMCGs structural profitability
12) Business model transformation of the year (strategic intent at least): Mars PetCare
If it is still a ‘strategic intent in progress’ and it still needs to be rightly executed, it seems to be a clever move (cf. chart below). Here is what we like:
If the strategic intent is remarkable in many respects, success will come down to perfect integration and execution
If the strategic intent is remarkable in many respects, success will come down to perfect integration and execution
13) Deal of the year: Coke-Costa Coffee
If we do not necessarily agree with James Quincey vision to build a Total Beverage company (we rather consider that the right strategic framework for Coke should be about owning impulse beverage – and food – occasions but this point goes much beyond this article), the Costa acquisition makes a lot of strategic sense and reminds us JAB’s strategy on coffee: owning vertically the entire value chain as a key way to future-proof/ expand a profit pool.
This Coke’s move on Costa needs to be put in a much wider context; the race to acquire DTC assets, and especially brick and mortar retail assets for Food and Beverage companies as it is where the disruption will mostly come from on impulse categories (New Retail)
14) Another record year for M&A fueled by PE investments and marked by radically different strategic choices
(Very summarized) key take-away (longer article to come dedicated on the topic):
i) 2018 has been another record year for M&A in the FMCG industry, coming only after the exceptional year 2016 fueled by the ~$100bn Megabrew deal
ii) PE funds played an important role with a record $58bn invested, led by JAB, KKR, TPG and PARTNERS GROUP. Even SOFTBANK, that usually focused on Tech, invested in the FMCG industry in 2018 with a stake in BRANDLESS for a whopping $240m
iii) A year marked by radically different strategic choices:
While it is way too early to judge, we see Mars, Coke and JAB moves as being more future-proof
3 questions for 2019 for FMCG CEOs:
1) Do you finely understand your company’s Growth gap, its key drivers and the recoverable parts? Do you understand where you have a right-to-win to go beyond the boundaries of your categories to create value for consumers (services, DTC/ retail forward integration…)?
2) Similarly to Mars PetCare and Walmart, do you have a clear understanding of the future-back value at stake (key risks/ opps,) and do you have accordingly a clear strategic intent to future-proof your company?
3) Finally, do you have a balanced strategy between strengthening the Core and Inventing the New with the appropriate resource allocation? Do you have the right enablers (organization, talent, M&A, technology) in place to deliver it?
As often, I will conclude this article with the opening quote: ‘It is not enough that we do our best, sometimes we must do what is required’ Winston Churchill
No doubt that 2019 will be again a hugely exciting year.
Frederic, Nikhil, Tripti, Bartek and Akhil
For the ones willing to continue the conversation, we will organize an Exclusive FMCG Senior Executive round-table on June 21st 2019 in our Zurich office from 11 am to 3 pm (lunch will be served), The theme will be: ‘Which strategy to win now in a fragmented world while future-proofing our business to win tomorrow’. It will be our unique conference in 2019. As usual, the attendance is strictly limited to 12 FMCG leaders. Please contact lea@fredericfernandezassociates.com to RSVP before April 21st 2019
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Frederic Fernandez does not own any stocks or financial instruments of any FMCG companies or companies mentioned in the above article. All the above information are public information.
About the author:
Frederic Fernandez is an expert and thought leader in the FMCG industry. He is the Managing Director and Partner of Frederic Fernandez & Associates a global bespoke Strategy Consulting Firm exclusively focused on the FMCG industry. Its purpose is to co-create the future of the FMCG industry, one client at a time. The Firm helps the CEOs and the Boards of the world’s largest FMCG companies on selected areas: Growth and Profit turnaround, Exponential Growth strategy (New Retail, Omnichannel, DTC, Ecommerce, Business Model Innovation), Disruption Hedging/Leapfrog and M&A strategy. The Firm’s head office is located in Zurich, Switzerland. The Firm’s team intervenes all across the globe. To know more about the Firm, please visit its website: www.fredericfernandezassociates.com
