Revitalizing CPG Performance: Lessons From Market Leaders

Major consumer products companies (CPGs) face tough terrain. The first half of 2024 saw several formerly thriving companies report disappointing results, and most experience a drop in sales volumes – all while facing rising costs and relentless pricing pressures that squeeze profit margins. In this article, we focus on two major challenges CPGs are grappling with, and explore the strategies the more resilient companies are employing to weather the storm.

Two key pressures facing CPGs:

1. A volatile operating environment

The economic landscape for CPGs is marked by volatile post-pandemic conditions and slow volume recovery, with the cost-of-living crisis shattering consumer confidence. Skyrocketing food prices, which from 2020 to 2023 comprised 58% of the past decade's total food inflation in the U.S., have further squeezed household budgets, leading to a drop in grocery volumes.