Top Global Food and Beverage Companies: Strategies for Success

Published by: Packaged Facts

Published: Jan. 1, 2009 - 295 Pages

Table of Contents

Top Global Food and Beverage Companies: Strategies for Success

Chapter 1: Executive Summary

Scope and Methodology

Scope of Report

Report Methodology

Global branding in the CPG food and beverage industry

Figure 1-1: Global revenues of leading CPG companies 2007-2008 (in billions of dollars)

A new age of complexity

Figure 1-2: Key external issues driving the food and beverage industry forward

Economic challenges

Consumer empowerment

The innovation challenge

Build global mega brands

Providing multi-tiered brand value

Figure 1-3: Comparison of food benefits by geographic markets “When making food purchases, which, if any, of the following factors do you consider today?”

Thinking globally, acting locally

Expanding the global footprint

Mature market pressures

Securing a greater share of high-growth markets

Figure 1-4: Consumer expenditure comparisons in selected global markets, Spending on food, beverages and tobacco as % of total country consumer expenditure, 2007

Building international scale

Placing health & nutrition at the heart of the business

Advertising and promotion

Figure 1-5: Advertising spend on major media by region, 2007 (in millions of U.S. dollars)

Retailers raising the bar

Figure 1-6: Leading global grocery retailers by net sales revenue, 2006-2007 (in millions of dollars)

Chapter 2: Introduction To Global Branding

Defining the global brand

The emergence of globalization

Globalization in the 21st century

The downside of globalization

Defining features of a global brand

Introduction to consumer packaged goods manufacturing

Table 2-1: Top 10 most profitable industries based on the Forbes Global 500, 2007 percent return on revenue; revenue on assets (latest years available)

Chapter 3: Mega Trends

Trend 1: Consumer empowerment

Products that meet an ‘eclectic’ set of needs

Higher expectations

A louder ‘collaborative’ voice

Harder to reach and engage

Trend 2: Health and nutrition

Globesity

Table 3-1: The rise of adult ‘globesity’ across selected markets, 1960-1995 (people with a BMI ≥ 30 kg/m²) (percent rate by gender)

Figure 3-1: Obesity and Overweight Prevalence in Selected Industrialized

Nations (percent 2005/ people with a BMI ≥ 30 kg/m²)

Child obesity

Taking action

Trend 3: Supply side issues

Figure 3-2: Global commodity prices 1998-2010, Based on world price indices (U.S. dollars/tonnes)

Looking at prices in context

Trend 4: Global shifts in consumer expenditure - rise of the BRIC economies

Figure 3-3: Consumer expenditure comparisons in selected global markets, Actual expenditure on food, beverages and tobacco, 2007

Figure 3-4: Consumer expenditure comparisons in selected global markets, Spending on food, beverages and tobacco as percent of total country consumer expenditure, 2007

Figure 3-5: US Consumer expenditure 2007 (percent of total expenditure) Difficult times in mature markets

Trend 5: Sustainability and the ‘green’ movement

Figure 3-6: Municipal waste management in the European Union Corporate impact

Figure 3-7: Key external issues driving major food and beverage companies

Consumer propensity for green and sustainable products is growing

Sustainable approaches

Trend 6: Convenience

Broader societal changes

Figure 3-8: Number of hot meals cooked in the Home 1991-2005

Chapter 4: Corporate Analysis

The brand portfolio

Table 4-1: Global brand comparisons, by revenue and brand portfolio (in billions of dollars)

Brand differentiation

Glocal branding

Building the umbrella brand

Evolving the brand

Innovation-led

Research & Development

Mergers, acquisitions and ventures

Building around the core product portfolio

Creating a diversified CPG company

Creating a ‘health halo’: driving the health and wellness agenda

Sustainability and CSR

Specific company CSR developments

Benefits

Building a global footprint

Creating a global geographic presence

High-growth market: China

High-growth market: Russia

Chapter 5: Brand Development Trends

Strategy #1: Evolve to meet consumer demand globally

Global innovation challenges

Figure 5-1: US mass-market volume sales, by key category, 2003-2007 (in millions)

In pursuit of ground breaking innovations

Strategy #2: Create affordable luxuries

Price competitiveness

Premiumization

Figure 5-2: US mass-market value sales, by key category, 2003-2007 (in millions of dollars)

Strategy #3: Build global mega brands

Heinz Ketchup

Wrigley’s Orbit and Extra

Kellogg’s Special K

Kraft Philadelphia

Nestlé’s Nescafé

Strategy #4: Provide multi-tiered brand value

Figure 5-3: When making food purchases, which, if any, of the following factors do you consider today?

Product quality

Health, nutrition and wellness

Functional health solutions (nutraceuticals)

Nutrition

Weight management

Well-being

Taste

Convenience

Sustainability

Intangible value: Design & Appeal

Chapter 6: Advertising & Promotion

The global advertising landscape

Figure 6-1: Global advertising spend by region, 2007 (percent share of expenditure)

Figure 6-2: Advertising spend on major media by region, 2007 (in millions of U.S. dollars)

Multi-media communications strategies

Figure 6-3: Global distribution of advertising expenditure by major media, 1998-2007

Online advertising

Social media

Branded Utility

Big ideas that travel

Importance of in-store marketing

Sponsorships

Advertising backlash

Marketing to children

CPG companies embrace self-regulation on marketing to children

Consumer groups seek global code of contact to reduce marketing to children under 16

Chapter 7: Global Retailing Analysis

International retail trends

Figure 7-1: Leading global grocery retailers by net sales revenue, 2006-2007 (in millions of dollars)

Figure 7-2: Top 10 global retail grocery markets, 2005 (percent)

Growing power of supermarket retailers

Retailers raising the bar on innovation

Private label creates stronger competition for global brands

Growth in premium private label

Table 7-1: Top 19 take-home private label ranges, Great Britain, 2007-2008, 52 weeks ending April 20, 2007/08 (in million £ and percent)

Implications for global brands

Chapter 8: Company Profiles

Budweiser (Anheuser-Busch InBev)

Overview

Anheuser-Busch InBev

International presence

Figure 8-1: Anheuser-Busch beer sold by brand, 2007 (percent volume sales)

Market Performance

Table 8-1: U.S. Mass-Market Sales of Bud Light Domestic Beer/Ale, 2003-2008 (in millions of dollars and percent)

Table 8-2: U.S. Mass-Market Sales of Budweiser Domestic Beer/Ale, 2003-2008 (in millions of dollars and percent)

Financial Performance

Table 8-3: Anheuser-Busch - Financial analysis, 2003-2007 (in millions of U.S. dollars and percent)

Product development

Figure 8-2: Anheuser-Busch new product launches, 1998-2007

Table 8-4: Anheuser Busch - New Beverage Product Development by

Category Product and SKU data, 1998-2008

Corporate Responsibility

Marketing Communications

Interactive marketing

Coca-Cola….

Overview

International presence

Figure 8-3: Coca-Cola: Percent volume share by key geographic regions, 2007

Market performance

Table 8-5: U.S. Mass-Market Sales of Classic Coca-Cola, 2003-2008 (in millions of dollars and percent)

Table 8-6: U.S. Mass-Market Sales of Diet Coke, 2003-2008 (in millions of dollars and percent)

Table 8-7: U.S. Mass-Market Sales of Coke Zero, 2006-2008 (in millions of dollars and percent)

Financial performance

Table 8-8: The Coca-Cola Company - Financial analysis, 2004-2007 (in millions of dollars and percent)

The manufacturing (bottling) system

Innovation-led

Product development

Figure 8-4: Coca-Cola New product launches, 1998-2007

Table 8-9: The Coca-Cola Company - New Beverage Product Developments by Category Product and SKU data, 1998-2008

Global product development trends

Packaging innovation

Corporate social responsibility

Marketing communications

Interactive marketing

Sponsorships

Danone

Overview

Repositioning as a pure ‘health’ company

International presence

Figure 8-5: Danone: Percent revenue by Region (Q1 2008)

Market performance

Figure 8-6: Danone: global sales by business unit, 2007

Table 8-10: U.S. Mass-Market Sales of Dannon Activia Yoghurt (standard version only), 2003-2008 (in millions of dollars and percent)

Table 8-11: U.S. Mass-Market Sales of Dannon Light n Fit Yoghurt, 2003-2008 (in millions of dollars and percent)

Fresh Dairy Products

Waters

Baby Nutrition

Medical Nutrition

Financial performance

Table 8-12: Danone - financial analysis: Net revenues and operating income, 2003-2007 (in Euros and percent)

Table 8-13: Danone - financial analysis: Net revenues and operating income, 2006-2007 (excluding biscuits business) (in Euros and percent)

Research & development

Product developments

Figure 8-7: Danone/Dannon New Product Launches, 1998-2007

Table 8-14: Danone: New Beverage Product Developments by Category

Product and SKU data, 1998-2008

Global new product developments

Corporate social responsibility

Marketing communications

HJ Heinz & Company

Overview

Figure 8-8: Heinz: Sales by major product category, 2008 (percent sales revenue)

History

International presence

Figure 8-9: Heinz sales revenue by geography, 2008 (percent share)

Strong, local organizations

Market Performance

Table 8-15 U.S. Mass-Market Sales of Heinz Ketchup, 2003-2008 (in millions of dollars and percent)

Financial Performance

Table 8-16: Heinz - financial analysis: Net revenues and operating income, 2004-2008 (in millions of dollars and percent)

Innovation-led

Product development

Health & Wellness products

Figure 8-10: Heinz New Product Launches, 1998-2007

Table 8-17: Heinz - New Product Developments by Category Product and SKU data, 1998-2008

Packaging innovation/trends

Corporate social responsibility

Marketing communications

Interactive marketing

Sponsorships

Kellogg Company

Overview

International presence

Figure 8-11: Kellogg Company: revenue share by key geographic regions, 2008 (percent)

Market performance

Table 8-18: Leading Kellogg brands in the breakfast cereal category: Great Britain - Take Home/Retail: 2007-2008 (£ sales - 52 weeks ending April 20, 2007 and 2008)

Table 8-19: Leading U.S. Kellogg brands: Mass-Market Sales Breakfast Cereals, 2006-2008 (percent value share)

Table 8-20: U.S. Mass-Market Sales of Special K and Special K Red Berries, 2008 (in millions of dollars and percent)

Financial performance

Table 8-21: Kellogg Company - Financial analysis, 2003-2007 (in millions of dollars and percent)

Innovation

Product development

Figure 8-12: Kellogg New Product Launches, 1998-2007

Table 8-22: Kellogg - New Product Development by Category Product and

SKU data, 1998-2008

Packaging innovations/trends

Corporate social responsibility

Marketing communications

Interactive marketing

Sponsorships

Kraft profile.

Overview

History

Three-year turnaround strategy (2006-2009)

International presence

Localizing marketing strategy

Ten brands in ten markets

Market performance

Table 8-23: U.S. Mass-Market Sales of Kraft Philadelphia (brick, soft, whipped), 2003-2008 (in millions of dollars and percent)

Table 8-24: U.S. Mass-Market Sales of Oscar Mayer (sliced luncheon meat),

2003-2008 (in millions of dollars and percent)

Table 8-25: U.S. Mass-Market Sales of Nabisco Oreo Cookies, 2003-2008 (in millions of dollars and percent)

Financial performance

Table 8-26: Kraft financial analysis: Net revenues and operating income, 2003-2007 (in millions of dollars and percent)

Product development

Figure 8-13: Kraft New Product Launches, 1998-2007

Health and wellness

The king of convenience

Premium taste

Table 8-27: Kraft - New Product Developments by Category Product and

SKU data, 1998-2007

Corporate social responsibility

Marketing communications

Online marketing

Sampling & events

Education and information

Nestlé

Overview

History

International presence

Figure 8-14: Nestlé: Revenue by key business unit, 2007 (percent)

The creation of a global multifocal organisation

Market performance

Figure 8-15: Nestlé: Revenue by product group, 2007 (percent)

US market performance of selected brands

Table 8-28: U.S. Mass-Market Sales of Nescafé Tasters Choice Instant Coffee, 2003-2008 (in millions of dollars and percent)

Table 8-29: U.S. Mass-Market Sales of Nescafé Clasico Instant Coffee, 2003-2008 (in millions of dollars and percent)

Table 8-30: U.S. Mass-Market Sales of Friskies Fancy Feast Wet Cat Food, 2003-2008 (in millions of dollars and percent)

Financial performance

Table 8-31: Nestlé financial analysis: Net revenues and operating income, 2003-2007 (CHF million and percent)

Innovation and renovation

Product developments

Figure 8-16: Nestlé New Product Launches, 1998-2007.

Table 8-32: Nestlé - New Product Developments by Category Product and SKU data, 1998-2008

Beverages

Confectionery

Infant Nutrition

Healthcare

Dairy

Prepared dishes and cooking aids

Packaging innovation/trends

Corporate social responsibility

Marketing communications

Interactive marketing

Sponsorships

Wm Wrigley Jr Company (Mars Inc)

Overview

Figure 8-17: Wrigley Sales Revenue by Geography, 2007 (percent)

International presence

China

Russia

India

Market performance

Table 8-33: U.S. Mass-Market Sales of Wrigley’s Extra Sugarless Gum, 2003-2008 (in millions of dollars and percent)

Table 8-34: U.S. Mass-Market Sales of Wrigley’s Eclipse Sugarless gum, 2003-2008 (in millions of dollars and percent)

Table 8-35: U.S. Mass-Market Sales of Wrigley’s Orbit Sugarless gum, 2003-2008 (in millions of dollars and percent)

Financial performance

Table 8-36: Wrigley financial analysis: Net revenues and operating income, 2003-2007 (in millions of dollars and percent)

Retail expertise

Innovation-led

Figure 8-18: Wrigley New Product Launches, 1998-2007

Table 8-37: Wrigley - New Product Developments by Category Product and SKU data, 1998-2008

Product development

Packaging innovations

Corporate social responsibility

Marketing communications

Interactive marketing

Sponsorships

Chapter 9: Future Challenges

Highlights

Accelerating pace of change

Figure 9-1: Key issues driving the food and beverage industry forward

Economic downturn to continue into 2009

Health concerns will play a more dominant role in strategy

Convenience

Figure 9-2: Which of these aspects of packaging would you be prepared to give up if it meant that it would benefit the environment? (percent of global respondents, based on a global average)

Creating stronger global entities

Table 9-1: Forecast consumer expenditure data on food, beverages and tobacco, 2007-20012 (in billions of dollars and percent)

Sustainability and the CSR agenda

Responding to an empowered consumer

Retailer power will remain strong

Abstract

One of the most notable industry catalysts has been servicing a consumer with increasingly sophisticated tastes, preferences and power. Today, consumers are highly marketing-savvy and have greater expectations of brands not just in terms of quality and service, but honesty and transparency in how they run their business. Global brands are now confronted with a consumer that is willing and able to voice opinions about a brand and spread it like wildfire via online communities.

Health and convenience remain two of the biggest mega trends confronting manufacturers and play a significant role in shaping product strategy. Environmental concerns are rising, however, and the ‘green element’ is opening up a new set of issues manufacturers need to deal with, notably with regard to packaging and transportation. Devising and executing a robust corporate social responsibility strategy that deals with these issues is becoming a key requirement for global food and beverage brands.

Faced with limited volume growth in major developed markets, high-growth developing markets are becoming much more important to the bottom line. Mergers, acquisitions and partnerships are on the rise as food and drink brands look to establish and build their brands in international markets.

In response to these challenges, global brands are investing heavily in becoming better innovators, focusing more closely on using data and insight to drive strategy. As a consequence, there is a shift to becoming focused around a core mission or smaller set of brands, on which the company can build its foundations and evolve. Innovation is moving quietly into new avenues, where science can create real product differentiation.

From a communications standpoint, new and exciting avenues are being pursued as marketers embrace a wider range of media - offline and online - and build more targeted and intimate experiences for their customers. The power of digital platforms is creating new opportunities for food and drink marketers to build brand awareness and converse with consumers well away from the point of sale, but very much part of an integrated communications strategy.

Top Global Food and Beverage Companies: Strategies for Success explores the features and strategies of eight companies that have played a key role in shaping the global food & beverage industry. The report showcases the strategies that have underpinned the success of these companies and their brands, along with the highly complex challenges they face for the future. In addition to eight in-depth brand profiles, the report discusses the commonalities and distinguishing features of global brand strategies, from product development and innovation, through to marketing communications and distribution. The eight companies are:

• Anheuser-Busch (InBev)
• Coca-Cola
• Danone
• Heinz
• Kellogg
• Kraft Foods
• Nestlé
• Wrigley (Mars)

The information in Top Global Food and Beverage Companies: Strategies for Success is based on primary and secondary research. Secondary research entailed data gathering from relevant sources, including industry and association publications, trade press, company literature and corporate annual reports. Primary research consists of a series of in-depth interviews with brand experts, associations and consultants to the CPG industry, in order to more closely understand the challenges brands face.

What you’ll get in this report

Top Global Food and Beverage Companies: Strategies for Success contains a unique mix of consumer, market and industry insight with international scope. It highlights the international strategies employed by some of the most successful leading brands in the industry and discusses the challenges faced by companies both now and in the future.

How you’ll benefit from this report

This report will serve as a benchmarking tool for companies and brands either looking to grow their industry presence on a domestic or international level or for smaller brands with big ambitions. The report provides a comprehensive overview that cannot be found in a single source, including insight from multiple products categories and markets.

This report will help:

Marketing managers including brand, product and communication specialists to identify industry challenges, market opportunities and help formulate marketing strategy in multiple areas.

Business development executives and entrepreneurs in the food and beverage field to understand the landscape, the competitive set, and act as guidance to develop a ‘go-to-market’ strategy.

Research and development professionals stay on top of competitor initiatives and explore demand for food and beverages.

Marketing and branding agencies working with clients in the food and beverage industries understand the issues affecting them and identify insights to develop messaging and creative ideas that resonate with the target audience.

Business and information researchers that require valuable insight to pass on to in-house market researchers, business managers and other employees.

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