We help clients achieve sustainable performance gains by optimizing corporate strategy, category strategies,
and financial productivity.
In the past, margin management in the consumer goods industry was tantamount to capturing raw material price declines and introducing ever more profitable products. But increasing competitive intensity, price pressure, and hybrid consumption have put an end to this era. To create sustainable value in today’s environment, consumer goods companies need disciplined strategic planning and focused execution, mid-term as well as long-term. We support leading players in their efforts to gain sustainable supremacy.
What we do
Our teams support clients in their efforts to create value now and in the future. Specifically, we work with consumer goods companies to define, review, and optimize strategies at all organizational levels, from the corporate center to individual business units and specific categories. Our global team also provides independent, strategic advice on finance and value creation. We work with clients on topics such as valuation, transaction support, capital markets, treasury, financial analysis and modeling, and strengthening the finance function.
Depending on the challenge, solutions may include the following:
- Corporate strategy/growth. Top-line growth is a key driver of total return to shareholders. We help clients identify and analyze their key drivers of growth relative to competitors. We engage with them on the outlook for future growth in light of their current portfolio, and we help them determine strategic actions to improve their growth trajectory. We also help clients understand and reap the benefits of scale.
- Category strategy. We help manufacturers determine the optimal category strategy for their portfolio. Guiding questions include: What categories are most attractive? What are the category dynamics in these categories? How can further growth in developed categories be achieved? Our teams work closely with our subsidiary Henry Rak Consulting Partners (HRCP), leveraging big data to build a market structure that explains the drivers of consumer choice using all possible variables.
- Corporate finance/M&A. We help clients analyze and understand their performance in capital markets, and we work with them to devise a course of actions to improve their returns in capital markets. We also support our clients at all stages along the continuum of a transaction. Additionally, we help companies optimize the performance of their finance function.
- Risk management. Consumer companies are operating in an environment that is characterized by volatile commodity cost, changes in consumer confidence, and many other dynamic factors. We help clients decide how to operate in this environment and hedge the risk of future challenges.
Over the course of more than 700 client projects, we have developed tools and solutions to address a wide range of strategic topics in the consumer goods industry. Clients and teams make use of an evolving suite of growth strategy tools, databases, and surveys, updated and enhanced by a growing team of dedicated experts. Examples include:
- Growth Compass Database. The Growth Compass is McKinsey’s proprietary database that helps teams assess and prioritize growth opportunities in consumer goods. It includes a high-resolution forecast tool that enables clients to drill down to the category level. Learn more on the Consumer Shopper Insights site about finding profits and growth in emerging markets.
- Granularity of Growth Decomposition. This proprietary tool helps clients disaggregate historical growth of consumer packaged goods companies, singling out factors that include market momentum, losses and gains in market share, inorganic growth, and growth due to currency changes.
- Value Navigator. The Value Navigator is a tool to develop granular insights on sources of past and future value creation across the corporate portfolio. It goes beyond mere growth and incorporates profitability and capital productivity of the granular cells of a company's portfolio. With the Value Navigator, CPG companies can determine the real drivers of value, thereby creating a fact base for future resource allocation.
- Market Structures. Thanks to our wholly-owned analytical subsidiary Henry Rak Consulting Partners (HRCP), we are able to mine vast amounts of shopper data and build a market structure that explains the drivers of consumer choice using all possible variables. Among other things, this allows our clients to understand switching behavior and predict pockets of growth realistically. Learn more about our capabilities in Big Data & Advanced Analytics.
- Capital Markets Diagnostic. Our Capital Markets’ Diagnostic tool provides the capital markets perspective on historical share price performance and helps clients evaluate share price differential. It helps CFOs in consumer industries drive maximum value creation.
- Consumer Sentiment survey. Since August 2008, McKinsey has been surveying more than a thousand consumers in the US about their attitudes and behavior; this has created a unique data set that allows us to understand how these have changed over time. In the latest round, two-thirds of respondents reported they were feeling economic pressure.
- Trend Barometer. Our Trend Barometer enables clients to identify the trends that will shape the consumer industries in the next decade, from emerging market growth and demographic change to sustainability and changes in taxation. The barometer recognizes both the potential business impact and the likelihood of future developments, as well as the specific impact on the client’s company.