P&G, Unilever and L'Oréal named in top 50 FMCG list

By Lucy Tandon Copp 26-Aug-2016

2015 proved to be an active year for M&A for the top 50 companies totalling $226bn

P&G, Unilever and L’Oréal have ranked in the top ten of consultancy OC&C’s top 50 global consumers goods companies 2016 list, published in association with the Grocer.

The ranking, now in its 14th year, analyses the financial performance of the world’s largest companies and ranks them based on revenues taken from the annual report of each business.

In second place on the list was P&G, while Unilever came in fourth and L’Oréal pitched in tenth place. German consumers goods giant Henkel came in 41st position and was the only German company to make it onto the list.

Local competition escalates

The list was part of a wider report, which also provided insight into the top 50 FMCG’s activities.

M&A activity was seen to oustrip the previous four years combined, totalling $226bn in 2015.

The global 50 consumer goods giants are finding their very business model under siege from all sides

OC&C Partner Will Hayllar

However, revenue of the top 50 declined for the fifth year in a row, due to slowdowns in emerging markets, currency volatility and local competition.

OC&C Partner Will Hayllar said: "The global 50 consumer goods giants are finding their very business model under siege from all sides. Smaller local competitors continue to gain share in not just BRIC but also western markets."

Speaking about the impact of homegrown companies, Hayllar added: “Nimble local players have been stealing share across the board. In western markets, their success has been fuelled by exploiting fragmenting customer demand and savvy use of digital.

"Dollar Shave Club’s direct to customer business model, for example, has propelled the company to over $150m in sales and the number two market position in US shaving in just five years.

"In emerging markets, local players have been taking share through a combination of scale in local distribution networks, tailoring products to local trends and tastes, and agility.”

Reclaiming control

Despite this, the top 50 companies have been seen to take action to take back control within the market.

Marketing spend among the top 50 was seen to grow in 2015 by 0.7% of sales and R&D by 0.1%, together contributing $8bn.

Hayllar added: “Greater investment in R&D and marketing, and the surge in M&A activity show that the Global 50 aren’t taking tough market conditions and aggressive competition lying down."

Hayllar notes that he believes the future for the top 50 lies in digital. "Consumer goods companies need to be thinking about how digital can bring value across their whole business: from supply chain optimisation and digitally facilitated new product development, to marketing and direct to customer sales."

Top 10

1. Nestle AG
2. P&G
3. Pepsico
4. Unilever
5. JBS
6. Coca Cola Company
7. AB Inbev
8. Tyson Foods
9. Mondelez
10. L’Oréal