Botanic Tonics’ Post

Bain & Company’s eighth annual review recognizes 97 high-growth US consumer products brands, and we're very proud to see NICKS making it second year in a row. While accounting for less than 2% of market share in the categories in which they exist, these brands captured nearly 20% of incremental category growth. As Bain puts it: These insurgent brands provide insights into where innovation and disruptive growth is happening in the sector, and they offer useful blueprints for how to achieve sustainable growth during a time when many scale incumbents have reached their limits on price increases and volumes have stagnated.

Interesting read on Bain & Company's 2024 Insurgent Brands, sharing the movers and shakers disrupting FMCG right now https://lnkd.in/gkSWDcuu

Bain & Company has published our 2024 Insurgent Brands report, highlighting the set of brands driving innovation and disruptive growth in the Consumer Products sector! Shoutout to The Long Drink Company, founded by Bain alumni Mikael Taipale, recognized as one of the leading players to watch in the alcoholic beverages space. This further underscores the entrepreneurial spirit and innovative drive fostered within the Bain community! Learn more about them here: https://lnkd.in/d6zVaEtW Dive deeper into the report to uncover key trends and strategies shaping the future of consumer products: https://bit.ly/3v8bBFT #insurgentbrands #consumerproducts #marketinsights #atBain

Insurgents are real and growing 10X faster than their big company competitors. Startups gunning for big opportunities are winning. According to Bain & Company these young companies captured nearly 20% of incremental category growth in 2023 vs just 6% in 2022. If I was the CEO or CMO of an incumbent (read Fortune 500 company), I'd be worried. There is growth in my categories but I may not be the one capturing the benefits of the growth. Insurgent brands had the greatest impact in the nonalcoholic beverage category capturing more than 35% of the category growth. I wonder if companies like The Coca-Cola Company pulling back from small brands accelerated this opportunity? Or does it indicate that pulling back from small brands (that typically have high gross-margins and high sales growth) was a mistake? Emerging brands with sales between $10 million and $25 million outgrew their category growth by 10 times or more. Some of the most promising in this high-growth cohort are GOODLES TruRanch Carbliss - THE PREMIUM Ready to Drink Cocktail Mike's Hot Honey Bizzy® Cold Brew and Odele Beauty Looking forward, Bain notes that innovation by large FMCG companies remains limited, insurgents are well positioned to earn an even greater share of the growth. This has been the case for the last 20 years that I have worked with insurgent brands. It's time for large companies to reimagine what partnering and investing in high-growth companies can do to drive growth. It's more External R&D or External Innovation than "CVC". #Markknows #innovation #externalR&D #externalinnovation #CVC #partnerships #growth #leadership #food #beverages #beverage #insurgents #businessmodel https://lnkd.in/e6HY-cyy

British consumer goods giant #Unilever PLC (LSE:ULVR) has finalized the sale of its non-core beauty and personal care unit, #ElidaBeauty , to US private equity firm #YellowWoodPartners. The deal, anticipated to conclude by mid-2024, encompasses iconic brands like Q-Tips, Brut, Caress, Timotei, and Tigi, contributing around $1.02 billion in revenues for 2022. The move aligns with Unilever's broader strategy under new CEO Hein Schumacher. The new CEO told shareholders that Unilever will zero its focus on 30 of its key brands, which comprise nearly 70% of it sales. Yellow Wood Partners, known for its consumer brand portfolio, previously acquired Unilever's personal care brand Suave in May. In addition to Suave, Yellow Wood’s consumer brand portfolio includes Dr. Scholl’s and Scholl International (acquired from Reckitt). More at #Proactive #ProactiveInvestors #LSE #ULVR http://ow.ly/1Itw10562xx

Reckitt Sells Non-Core Brands for Sharper Focus Reckitt is streamlining its business! Marketing Week reports that the consumer goods giant is selling off its "non-core" brands, including Air Wick and Cilit Bang, to become a more "effective" organization. What's the strategy? - Simplifying the Portfolio: Reckitt is focusing on its "power brands" like Strepsils, Nurofen, Durex, and Finish, which are leaders in their respective categories. - Sharpening the Focus: By divesting non-core brands, Reckitt aims to allocate resources more effectively towards its core business and growth areas. - Investing in What Matters: The proceeds from the sale could be used for strategic acquisitions, product development, or marketing initiatives that fuel growth for their power brands. Reckitt emphasizes: becoming a "world-class health and hygiene company" with the right categories, brands, team, and structure. This move signifies a trend in the FMCG industry: focusing on core competencies and optimizing brand portfolios. https://ow.ly/CnIi50SJOXT #Reckitt #FMCG #MarketingStrategy

Companies are turning to premiumization strategies to deliver more value to customers – and to maintain healthy margins. But the strategy doesn’t always pay off. Innosight's Claudia Pardo, Dr. Thomas Hagmann, Eric Davis, and Walid Fawaz share three keys to success and lessons from consumer goods leaders like L'Oréal, Procter & Gamble, and Ferrero. Done right, premiumization can not only cushion the inflation effect but also foster growth by delivering enhanced value to the customer. https://lnkd.in/g2wkcRua  #premiumization #businessstrategy #valuecreation

What have in common the highest ROI M&A transactions in the FMCG industry over the last decade? Most of them share four key traits: i) Mid-sized assets ($0.5-6bn EV): with hence a proven business model yet with plenty of growth headroom ii) US-based assets: often positive payback on M&A guaranteed if scale-up successfully nationally. US-assets tend to travel better than assets acquired in other regions (although not an absolute guarantee of international success) iii) Mostly acquirers' with the right category expertise and/ or the right GTM capabilities: that is the case for all (except in some extent for GenMills with Blue). No 100% digital assets (e.g. DTC pure-players) are part of this list iv) The majority of those transactions were completed by frequent acquirers demonstrating one more time the importance to acquire frequently assets both to spread risk but also to develop M&A capabilities across the entire cycle (from due diligences through integration to value creation case delivery) To read our full perspective: FMCG CEOs: M&A Q1 2024 In Review - A New Bottom & Four Reinforcing Trends 𝗟𝗶𝗻𝗸 𝘁𝗼 𝘁𝗵𝗲 𝗳𝘂𝗹𝗹 𝗽𝘂𝗯𝗹𝗶𝗰𝗮𝘁𝗶𝗼𝗻: https://lnkd.in/efD5RNWX 𝗧𝗼 𝗴𝗲𝘁 𝘁𝗵𝗲 𝗰𝗼𝗿𝗿𝗲𝘀𝗽𝗼𝗻𝗱𝗶𝗻𝗴 𝗱𝗲𝗰𝗸, 𝗽𝗹 𝗹𝗲𝗮𝘃𝗲 𝘆𝗼𝘂𝗿 𝗻𝗮𝗺𝗲 𝗶𝗻 𝗰𝗼𝗺𝗺𝗲𝗻𝘁 𝗧𝗼 𝗴𝗲𝘁 𝗮𝗹𝗹 𝗼𝘂𝗿 𝗶𝗻𝘀𝗶𝗴𝗵𝘁𝘀, 𝗳𝗼𝗹𝗹𝗼𝘄 𝘂𝘀/ 𝘀𝘂𝗯𝘀𝗰𝗿𝗶𝗯𝗲 𝘁𝗼 𝗼𝘂𝗿 𝗙𝗠𝗖𝗚 𝗖𝗘𝗢𝘀 𝗜𝗻𝘀𝗶𝗴𝗵𝘁𝘀 𝗻𝗲𝘄𝘀𝗹𝗲𝘁𝘁𝗲𝗿: https://lnkd.in/ea4gy65y #cpg #fmcg Nestlé AB InBev Procter & Gamble PepsiCo The Coca-Cola Company Unilever Mondelēz International Kraft Heinz L'Oréal Church & Dwight Co., Inc. Kellogg Company General Mills Blue Buffalo cerave Monster Energy Native RXBAR Danone The HEINEKEN Company Pernod Ricard Henkel Coty The Estée Lauder Companies Inc. Beiersdorf Bel William Grant & Sons Campari Group Diageo Mars

What have in common the highest ROI M&A transactions in the FMCG industry over the last decade? Most of them share four key traits: i) Mid-sized assets ($0.5-6bn EV): with hence a proven business model yet with plenty of growth headroom ii) US-based assets: often positive payback on M&A guaranteed if scale-up successfully nationally. US-assets tend to travel better than assets acquired in other regions (although not an absolute guarantee of international success) iii) Mostly acquirers' with the right category expertise and/ or the right GTM capabilities: that is the case for all (except in some extent for GenMills with Blue). No 100% digital assets (e.g. DTC pure-players) are part of this list iv) The majority of those transactions were completed by frequent acquirers demonstrating one more time the importance to acquire frequently assets both to spread risk but also to develop M&A capabilities across the entire cycle (from due diligences through integration to value creation case delivery) To read our full perspective: FMCG CEOs: M&A Q1 2024 In Review - A New Bottom & Four Reinforcing Trends 𝗟𝗶𝗻𝗸 𝘁𝗼 𝘁𝗵𝗲 𝗳𝘂𝗹𝗹 𝗽𝘂𝗯𝗹𝗶𝗰𝗮𝘁𝗶𝗼𝗻: https://lnkd.in/efD5RNWX 𝗧𝗼 𝗴𝗲𝘁 𝘁𝗵𝗲 𝗰𝗼𝗿𝗿𝗲𝘀𝗽𝗼𝗻𝗱𝗶𝗻𝗴 𝗱𝗲𝗰𝗸, 𝗽𝗹 𝗹𝗲𝗮𝘃𝗲 𝘆𝗼𝘂𝗿 𝗻𝗮𝗺𝗲 𝗶𝗻 𝗰𝗼𝗺𝗺𝗲𝗻𝘁 𝗧𝗼 𝗴𝗲𝘁 𝗮𝗹𝗹 𝗼𝘂𝗿 𝗶𝗻𝘀𝗶𝗴𝗵𝘁𝘀, 𝗳𝗼𝗹𝗹𝗼𝘄 𝘂𝘀/ 𝘀𝘂𝗯𝘀𝗰𝗿𝗶𝗯𝗲 𝘁𝗼 𝗼𝘂𝗿 𝗙𝗠𝗖𝗚 𝗖𝗘𝗢𝘀 𝗜𝗻𝘀𝗶𝗴𝗵𝘁𝘀 𝗻𝗲𝘄𝘀𝗹𝗲𝘁𝘁𝗲𝗿: https://lnkd.in/ea4gy65y #cpg #fmcg Nestlé AB InBev Procter & Gamble PepsiCo The Coca-Cola Company Unilever Mondelēz International Kraft Heinz L'Oréal Church & Dwight Co., Inc. Kellogg Company General Mills Blue Buffalo cerave Monster Energy Native RXBAR Danone The HEINEKEN Company Pernod Ricard Henkel Coty The Estée Lauder Companies Inc. Beiersdorf Bel William Grant & Sons Campari Group Diageo Mars

Most investors would think that established brands are better positioned to weather tough times. However, this inflationary period has proven that even established brands are struggling. But investors should not be dismayed because there are younger, dynamic brands that are prospering. Here are some examples with their corresponding 1-year stock performance: McDonald's: -8% Wingstop: +93% 🚀 Coca-Cola: -3% Celsius: +118% 🌟 Estee Lauder: -48% e.l.f. Beauty: +73% ✨ It's not just about offering lower prices but also providing high value via products that excite consumers, making them willing to open their wallets even during an inflationary period. Read more analysis here: https://lnkd.in/gEHYBRiJ