European consumer companies are seeking growth at a volatile moment

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Amid a shifting macroeconomic landscape, we surveyed 175 European executives to better understand how mid-cap consumer companies grow, what kinds of challenges they’re facing, and what levers they plan to use to boost future growth. This survey’s respondents are C-level executives at European-based companies with annual revenues between €50 million and €3 billion.

The survey was in the field during March 2023 and builds on a survey conducted in fall 2022. While the previous survey revealed actions that have delivered success in the past, this survey focuses on the future plans of companies with high-growth ambitions. Among its major findings: novel challenges are surfacing, core business activities are gaining in importance, and companies are updating their investment priorities. It will be critical to carefully manage ROI in a future where growth slows even as investments in growth increase.

Companies will need to adopt bolder mindsets as growth outperformance becomes more elusive

Mid-cap consumer executives expect diminishing future growth.

Challenges are shifting, new concerns are emerging, and companies will need to stay agile to adapt

Pandemic-era obstacles for consumer companies are subsiding as new challenges arise.

Companies plan to use a broad set of levers to achieve future growth

Consumer goods executives tend to prioritize product innovation and expansion into new categories close to their cores.

Retailers are eager to establish their own marketplaces

Retail executives are focused on improving store experiences, expanding into new categories, and establishing their own marketplaces.

Restaurant executives hope to expand into new channels

Restaurant executives are focused on improving same-store sales, launching new channels, and creating digital solutions.

Investment levels are projected to increase, with optimization of ROI becoming more critical than ever

Respondents expect higher overall investment levels, with top priority granted to capital expenditures and external marketing.

To deliver continuous, profitable growth, a company can pursue three growth pathways: growing the core of its business, expanding into adjacencies, and igniting breakout businesses. If a company ignores any of these crucial avenues to growth, it risks falling behind its competition. Our prior research suggests there are four crucial lessons to learn from companies that have succeeded in the past:

  • Apply a venture capital or private equity mindset to your growth strategy.
  • Don’t underestimate the potential contributions of your core business.
  • Make sure you have a sharply defined strategy and sense of direction for growth.
  • Link your strategic growth vision and direction to a clear and essential set of targets and key performance indicators.

Our new research confirms these insights and also sheds further light on how companies plan to achieve high growth in the future—with challenges shifting, high-growth rates becoming even more difficult to achieve, and optimizing ROI for growth becoming more imperative than ever.

Asking several diagnostic questions can help stress-test strategies for extraordinary growth in the consumer sector:

  • Are you continuously choosing growth—by emulating a venture capital or private equity mindset—even if you have achieved high growth in the past?
  • Are you equipped to quickly notice and react to evolving barriers to growth, as well as evolving opportunities?
  • Are you exploring all three avenues of growth (core, adjacencies, breakout businesses)? Are you focusing enough on growing your core business?
  • What set of levers will you trust to drive growth?
  • Are investment decisions in line with what is needed to boost growth in a more challenging context? How are you managing ROI, given increased pressure?
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