The world’s 250 largest consumer products companies generated sales of nearly $3.1 trillion in fiscal year ending June 2014, despite economic uncertainty, a report said.

This resulted in an average company size of $12.3 billion, added the eighth annual Global Powers of Consumer Products 2015: Connecting with the connected consumer report issued by Deloitte, a provider of audit, tax, consulting, and financial advisory services.

The report provides an outlook on the global economy, a look at merger and acquisition activity in the consumer products industry; and a discussion on the importance of connecting with the connected consumer.

Only four of the global Top 250 consumer products companies are from the Africa/Middle East region. Savola, a multinational food group based in Saudi Arabia, is the biggest amongst this group and the 111th globally. The region’s three other companies are headquartered in Turkey.

“The fall in the price of oil is having a considerable impact on the global economy, with increased disinflationary pressures, especially in developed markets such as the US, Europe, and Japan. It is boosting consumer purchasing power in oil-consuming nations such as Japan, India, the US, and much of Europe, and contributing to faster economic growth than would otherwise be the case,” said Dr Ira Kalish, Deloitte’s chief global economist.

Strong M&A activity

The number of deals has picked up every year since flat lining in 2009, with 1,421 total deals completed by consumer products companies in 2013. Based on the numbers to date, 2014 is on track to reach or surpass 2013’s deal volume.

Unlike deal volume, however, deal values have trended down since 2009—that is until 2013 when the average value rebounded sharply. The decline in deal values through 2012 may be accounted for, at least in part, by bargain hunting opportunities coming out of the global economic slowdown that allowed companies to pick up assets at distressed prices.

Herve Ballantyne, partner and Consumer Business leader at Deloitte Middle East said: “Organic growth remains a challenge for many consumer products companies. As a result, companies will continue to view strategic acquisitions as a fast-track method to increasing market share.

“Over the next few years, we expect consumer products companies to continue to use acquisitions and disposals to streamline and focus their product portfolios, making their organizations more agile and responsive to changing consumer preferences.”

While consumers have unprecedented access to product information and online expertise to guide their purchasing decisions, recent research  from Deloitte shows that, surprisingly, consumers are talking far less to product or service experts than they are to families, friends, and other consumers.

Sixty per cent said they either trust family and friends or customer reviews for information on products and service, followed by independent product/service experts (43 per cent); store staff/retailer website (16 per cent); and product manufacturers (12 per cent).

“Consumers are increasingly turning to those they feel they can trust and, as the statistics indicate, trust is an important driver of consumer purchasing behaviour,” said Ballantyne.

“It is imperative, therefore, that in return for sharing their data, consumers have assurance that their data will be protected and that they receive something valuable in return. This is one of the big challenges facing consumer goods companies.”

Global outlook

As a whole, 2013-2014 was another challenging year for the global economy. Europe remained in recession during most of 2013, although it began to recover modestly by the end of the year and heading into 2014—but growth remained poor.


The US economy grew slowly in 2013 largely due to a tightening of fiscal policy. While the economy strengthened in Japan, supported by improved exports and the government’s massive economic stimulus measures, the Chinese economy decelerated in 2013, and similar slow growth continued into 2014.

Economic growth also cooled in several Latin American countries as they faced the end of China’s commodity boom, weaker domestic demand, social unrest, and other downward pressures. Overall, recovery by many economies around the globe continued to be jagged and weak. – TradeArabia News Service