CPG Industry’s Future Cloudy On Uneven Growth, Commodity Prices

The consumer packaged goods industry has seen its revenues continue to increase throughout the financial crisis, but margins fell sharply and even with much of the world recovering it won’t be easy for CPG firms to cash in on that growth.

“Given that global CPG companies are selling more of their products to more people in more parts of the world, shouldn’t revenue growth—and, with it, healthy returns—be theirs for the taking?” write McKinsey & Co analysts Jim Brennan, Greg Kelly, and Anne Martinez.

The CPG industry has gone through four distinct phases over the last five decades: a period of strong growth at the expense of margins, a period of expanding margins, a wave of mergers and acquisitions, and then...