Professional Documents
Culture Documents
Table of contents
Highlights
Top-performing
companies
This years edition of the Retail and Consumer Insights series focuses on the financial
performance of consumer packaged goods (CPG) companies in 2014. In this report,
we discuss how the economy impacted CPG manufacturers and provide detailed
financial benchmark analyses.
Financial Performance
Metrics
-R
etailers and
manufacturers
Our benchmarks include a range of metrics for growth, returns, income, liquidity,
and balance sheet results. We analyze companies by size (small, medium, large, and
very large), sector (food, beverage, and household products), and source of primary
revenues (global and domestic).
- Manufacturers:
- Size-specific data
As in previous years, we have also sorted companies with sales of more than $4 billion
(large and very large) into performance quartiles and analyzed the results over five
years to find the common characteristics that the highest-ranking manufacturers
share, a category we call top-performing companies. A common trend that we have
seen is that top-performing companies are getting fit for growth and investing in
differentiating capabilities and operational excellence.
Economic overview
- Global vs domestic
- Food, beverage and
household product
manufacturers
In this years analysis, there were some interesting contrasts between the
performances of global and domestic manufacturers and the performance of retailers
and manufacturers. Company size also yielded intriguing differences in performance,
especially in terms of net sales growth.
These performance results suggest that although 2014 was a year in which the
economy continued its slow recovery from the Great Recession lows and employment
continues on its upswing, US manufacturers must keep relying on their own ingenuity
and innovation to spark their growth rather than wait for a slowly rising and
undependable global economic tide to lift them up.
Economic overview
The economic recovery continues, with all eyes on employment
numbers, wage growth, and a possible interest rate hike
400
141,000
350
140,000
300
250
139,000
200
138,000
150
137,000
100
136,000
50
135,000
Feb 2015
Mar 2015
Apr 2015
Dec 2014
Jan 2015
Nov 2014
0
Sep 2014
Oct 2014
142,000
Aug 2014
450
Jun 2014
Jul 2014
May 2014
Jan 2014
Feb 2014
Mar 2014
Apr 2014
Economic overview
Economic overview
The economic recovery continues, with all eyes on employment numbers,
wage growth, and a possible interest rate hike
8 Strategy&, How US CPGs can get their groove back & Manufacturers must
find ways to grow beyond the grocery channel, 2014
9 Bureau of Labor Statistics, The Employment Situation, April 2015; Bureau of
Labor Statistics, Databases, Tables & Calculators by Subject, accessed May
2015
Economic overview
Economic overview
The economic recovery continues, with all eyes on employment numbers,
wage growth, and a possible interest rate hike
8
7
6
5
4
Wheat
Feb-15
Aug-14
Feb-14
Aug-13
Feb-13
Aug-12
Feb-12
Aug-11
Feb-11
Aug-10
Corn
Source: USDA, Wheat Yearbook, Table 18, average monthly price received
by US farmers for all wheat; Feed Grains Database for market price for corn,
No. 2 Yellow in Kansas City, MO.
Economic overview
Economic overview
The economic recovery continues, with all eyes on employment numbers,
wage growth, and a possible interest rate hike
Economic overview
Top-performing companies
An analysis of the financial performance of leading manufacturers
Top-performing companies
Top-performing companies
An analysis of the financial performance of leading manufacturers
5%
0%
-5%
-10%
2010
2011
2012
2013
2014
Top-performing quartile
Bottom-performing quartile
TPC median gross margin
80%
60%
40%
20%
0%
2010
2011
2012
2013
2014
Top-performing quartile
Bottom-performing quartile
Source: YCharts, Appendix A and
PwC analysis
Top-performing quartile
Bottom-performing quartile
Top-performing companies
Top-performing companies
An analysis of the financial performance of leading manufacturers
20%
20%
10%
15%
0%
-10%
10%
-20%
5%
-30%
-40%
2010
2011
2012
2013
2014
0%
2010
2011
2012
2013
Top-performing quartile
Bottom-performing quartile
TPC median SG&A as a percentage of sales
Top-performing quartile
Bottom-performing quartile
TPC Median Cash Conversion Cycle
35%
120 days
30%
100 days
25%
2014
80 days
20%
60 days
15%
40 days
10%
20 days
5%
0%
2010
2011
2012
2013
Top-performing quartile
Bottom-performing quartile
2014
0 days
2010
2011
2012
2013
2014
Top-performing quartile
Bottom-performing quartile
Top-performing companies
Top-performing companies
An analysis of the financial performance of leading manufacturers
1.5
20
15
1.0
10
0.5
5
0.0
2010
2011
2012
2013
Top-performing quartile
Bottom-performing quartile
2014
2010
2011
2012
2013
2014
Top-performing quartile
Bottom-performing quartile
Top-performing companies
Top-performing companies
An analysis of the financial performance of leading manufacturers
10
Top-performing companies
Top-performing companies
An analysis of the financial performance of leading manufacturers
that it can extract data not only from social media and
loyalty programs but even from individual vending
machines. Dashboards help analysts get earlier access to
data and make faster decisions.
A household products manufacturer also focused on
speeding up decisions by building an analytics platform
that provides in-memory analytics capabilities capable of
delivering results hundreds of times faster than before.
It can analyze models across large sets of customers and
products in as close to real time as possible.
11
Top-performing companies
Top-performing companies
An analysis of the financial performance of leading manufacturers
12
Top-performing companies
13
14
3.7
4%
3.6
3%
2%
1%
0%
2010
2011
2012
2013
2014
Retailers
Manufacturers
Liquidity metrics
Median current ratio
1.6
2.0
12
1.0
10
0.8
1.5
1.4
1.0
8
0.6
6
0.4
4
0.5
0.2
2
0.0
2010
2011
2012
2013
2014
Retailers
Manufacturers
2010
2011
2012
2013
0.3
0.6
0.2
0.4
0.1
0.2
2010
2011
2012
2013
2014
Retailers
Manufacturers
0.0
2010
2011
2010
2011
2012
2013
2014
Retailers
Manufacturers
Retailers
Manufacturers
0.0
0.0
2014
2012
2013
2014
Retailers
Manufacturers
Retailers
Manufacturers
15
15%
15%
8%
10%
6%
10%
5.7%
5%
2.1%
0%
-5%
3.0%
5%
2010
2011
2012
2013
2014
-0.5%
0%
-5%
2010
2011
2012
2013
2014
4%
2%
0%
0.9%
2010
2011
2012
2013
2014
Retailers
Manufacturers
Retailers
Manufacturers
Retailers
Manufacturers
1.3%
10%
$500,000
60%
8%
$400,000
6%
$300,000
4%
$200,000
2%
$100,000
36.1%
40%
20%
0%
2010
2011
2012
2013
2014
$0
2010
2011
2012
2013
2014
Retailers
Manufacturers
Retailers
Manufacturers
24%
40%
0%
25.6%
2010
2011
2012
2013
2014
Retailers
Manufacturers
34.5%
22.7%
23%
30%
30.4%
22%
20.7%
21%
20%
20%
10%
19%
18%
2010
2011
2012
2013
2014
Retailers
Manufacturers
0%
2010
2011
2012
2013
2014
Retailers
Manufacturers
Retailers
Manufacturers
16
20%
15%
10%
5%
2010
2011
2012
2013
0%
2014
Retailers
Manufacturers
2010
2011
2012
2013
2014
Retailers
Manufacturers
45
90 days
90 days
75 days
40 days
29
65
60 days
75 days
60 days
30 days
37
45 days
45 days
20 days
10 days
30 days
30 days
15 days
15 days
0 days
0 days
2010
2011
2012
2013
2014
Retailers
Manufacturers
2010
2011
Retailers
Manufacturers
2012
2013
2014
0 days
2010
2011
2012
2013
2014
Retailers
Manufacturers
Retailers
Manufacturers
17
18
Defining size
Small: Companies with greater than $50 million and
less than or equal to $1 billion in net sales in their last
reported fiscal year.
Medium: Companies with greater than $1 billion and
less than or equal to $4 billion in net sales in their last
reported fiscal year.
Large: Companies with greater than $4 billion and
less than or equal to $10 billion in net sales in their
last reported fiscal year.
Very large: Companies with greater than $10 billion
in net sales in their last reported fiscal year.
15%
15%
11.1%
10.0%
10%
10%
7.2%
6.5%
5%
4.1%
5%
4.0%
3.1%
2.9%
0%
2010
2011
2012
2013
2014
0%
2010
2011
2012
2013
2014
15
1.5
10
1.0
0.5
2.5
2.0
1.5
1.0
0.5
0.0
2010
2011
2012
2013
2014
2010
2011
2012
2013
2014
0.0
2010
2011
2012
2013
2014
Small manufacturers
Medium manufacturers
Large manufacturers
Very large manufacturers
0.6
0.4
0.2
0.0
2010
2011
2012
2013
2014
19
7.7%
20%
20%
10%
15%
6.5%
5.9%
0%
10%
-1.6%
3.5%
-10%
5%
-5%
1.3%
-20%
0.2%
-30%
-21.8%
0%
2010
2011
2012
2013
-40%
2014
2010
2011
2012
2013
2014
$600,000
60%
47.3%
50%
36.1%
40%
$400,000
10%
32.5%
30%
5%
26.3%
20%
$200,000
10%
0%
2010
2011
2012
2013
2014
$0
2010
2011
2012
2013
2014
30%
27.8%
25%
2010
2011
2012
2013
2014
2013
2014
15%
0%
40%
24.1%
30%
20%
10%
22.6%
15%
20%
14.5%
10%
5%
10%
5%
0%
0%
2010
2011
2012
2013
2014
PwC analysis
2010
2011
2012
2013
2014
0%
2010
2011
2012
Small manufacturers
Medium manufacturers
Large manufacturers
Very large manufacturers
20
2.0
20%
90 days
1.5
15%
75 days
60 days
1.0
10%
0.5
5%
45 days
30 days
15 days
0.0
2010
2011
2012
2013
2014
0%
2010
2011
2012
2013
2014
0 days
2010
2011
2012
2013
2014
Small manufacturers
Medium manufacturers
Large manufacturers
Very large manufacturers
21
22
15%
15%
8.6%
10%
10%
7.9%
5%
3.9%
5%
3.2%
0%
2010
2011
2012
2013
2014
0%
Domestic
Global
2010
2011
2012
2013
2014
Domestic
Global
Liquidity metrics
Median current ratio
3.0
15.0
3.0
2.5
12.0
2.0
2.0
9.0
1.5
6.0
1.0
1.0
3.0
0.5
0
2010
2011
2012
2013
2014
Domestic
Global
2010
2011
2012
2013
Domestic
Global
2014
0.0
2010
2011
2012
2013
2014
Domestic
Global
Domestic
Global
0.8
0.6
0.4
0.2
0.0
2010
2011
2012
2013
2014
Domestic
Global
23
20%
20%
15%
15%
10%
5.4%
10%
5%
5%
0%
0%
-0.2%
0.4%
-10%
-1.3%
-5%
-5%
2010
2011
2012
2013
-10%
2014
Domestic
Global
2010
2011
2012
2013
2014
Domestic
Global
15%
$600,000
10%
$400,000
5%
$200,000
7.5%
8%
6%
4%
4.5%
2%
0%
2010
2011
2012
2013
0%
2014
Domestic
Global
2010
2011
2012
2013
2014
$0
2010
2011
2012
2013
2014
Retailers
Manufacturers
Domestic
Global
60%
40%
40%
30%
30%
20%
20%
10%
10%
34.2%
39.9%
40%
26.2%
29.4%
20%
0%
2010
2011
2012
2013
2014
Domestic
GlobalYCharts, Appendix A and
Source:
0%
2010
2011
Domestic
Global
2012
2013
2014
0%
2010
2011
2012
2013
2014
Domestic
Global
PwC analysis
Domestic
Global
24
3.0
20%
75 days
60 days
15%
2.0
45 days
10%
30 days
1.0
5%
0.0
2010
2011
2012
2013
2014
Domestic
Global
0%
15 days
2010
2011
Domestic
Global
2012
2013
2014
0 days
2010
2011
2012
2013
2014
Domestic
Global
Domestic
Global
25
26
15%
15%
10%
10%
5%
5%
0%
2010
2011
2012
2013
2014
0%
2010
2011
2012
2013
2014
Beverage
Food
Household products
Beverage
Food
Household
products
Liquidity
metrics
3.0
15
1.0
2.5
0.8
2.0
10
0.6
1.5
0.4
1.0
5
0.2
0.5
0.0
2010
2011
2012
Beverage
Food
Household
products
Median
short-term
debt
2013
2014
0.5
2010
2011
2012
2013
Beverage
Food
Household products
2014
0.0
2010
2011
2012
2013
2014
Beverage
Food
Household products
0.4
Food
Beverage
0.3
0.2
0.1
0.0
2010
2011
2012
2013
2014
Beverage
Food
Household products
27
30%
20%
15%
20%
10%
10%
3.9%
1.5%
5%
0.7%
0%
-0.8%
0%
0.5%
-10%
-3.9%
2010
2011
2012
2013
2014
-5%
Beverage
Food
Household products
2010
2011
2012
2013
2014
Beverage
Food
Household products
20%
$600,000
10%
15%
8%
$400,000
6%
10%
4%
$200,000
5%
2%
0%
2010
2011
2012
2013
2014
0%
Beverage
Food
Household products
2010
2011
2012
2013
2014
Beverage
Food
Household products
$0
2010
2011
2012
2013
2014
Beverage
Food
Household products
50%
50%
60%
40%
40%
46.6%
28.7%
30%
44.7%
40%
30%
28.1%
20%
26.3%
20%
20%
16.5%
10%
0%
2010
2011
2012
2013
2014
Beverage
Food
Source: YCharts, Appendix A and
Household
PwC
analysisproducts
10%
0%
2010
2011
2012
Beverage
Food
Household products
2013
2014
0%
2010
2011
2012
2013
2014
Beverage
Food
Household products
Household products
Food
Beverage
28
20%
75 days
60 days
15%
45 days
10%
30 days
5%
2010
2011
2012
2013
2014
Beverage
Food
Household products
Source: YCharts, Appendix A and
PwC analysis
0%
15 days
2010
2011
2012
Beverage
Food
Household products
2013
2014
0 days
2010
2011
2012
2013
2014
Beverage
Food
Household products
Household products
Food
Beverage
29
Data sources
YCharts was the primary source of data for the analysis
presented in this report. This data set includes annual
financial data from 2009 through 2014, by fiscal year, for
publicly traded companies. The report uses restated data
that accounts for mergers, acquisitions, divestitures, and
accounting changes. All data used to construct financial
metrics is as reported by the companies.
Company choice
The companies analyzed were identified as companies that
operate in the CPG manufacturing or retail industries. This
designation is generally based on a companys primary
industry and is identified using the North American
Industry Classification System (NAICS) as designated by
each company and reported in YCharts.
Manufacturers
A core group of NAICS codes was used to categorize
companies according to CPG industries, including food,
beverage, and household products manufacturing
activities.
Below is a list of the major manufacturer NAICS codes
and NAICS code descriptions by sector used in this report.
NAICS
code
NAICS description
Sector
NAICS
code
Beverage
312111
Food
311911
Beverage
312112
Beverage
312120
Breweries
Food
311919
Beverage
312130
Wineries
Food
311920
Beverage
312140
Distilleries
Food
311942
Food
311211
Flour milling
Food
311991
Food
311224
Food
311999
Food
311225
311119
Food
311230
Household
Products
Food
311352
Household
Products
322291
Food
311412
Household
Products
325199
Food
311421
325412
Food
311422
Specialty canning
Household
Products
Food
311423
Household
Products
325611
Food
311511
311514
Household
Products
325620
Food
311612
Household
Products
325998
Food
Food
311615
Poultry processing
335911
Food
311812
Commercial bakeries
Household
Products
Food
311821
Household
Products
335912
NAICS description
Source: PwC
30
Appendix A
Retailers
Data reporting
NAICS description
424410
445110
445120
Convenience stores
445299
446110
446120
446199
Large manufacturers
Medium manufacturers
447110
Small manufacturers
452111
Source: PwC
452112
452990
453910
453998
454111
Electronic shopping
Companies with net sales of less than $50 million for the
most recent reported fiscal year were excluded.
The total number of manufacturers in each size- and
industry-based segment are included below.
Source: PwC
Small
Medium
Large
Very
Large
Total
Beverage
11
28
Food
15
16
14
10
55
Household
products
10
26
Total
26
24
28
31
109
Source: PwC
31
Appendix A
32
Appendix B
33
PharMerica Corporation
PriceSmart, Inc.
Publix Super Markets, Inc.
Rite Aid Corporation
Roundys, Inc.
Sainsbury (J) PLC
Sally Beauty Holdings, Inc.
Sears Holdings Corporation
SpartanNash Company
Sprouts Farmers Market, Inc.
Starbucks Corporation
Sysco Corp
SUPERVALU INC.
Target Corporation
Tesco PLC (ADR)
The Jean Coutu Group (PJC) Inc.
The Kroger Co.
The Pantry, Inc.
TravelCenters of America LLC
Ulta Salon, Cosmetics & Fragrance, Inc.
United Natural Foods, Inc.
Village Super Market, Inc.
Vitamin Shoppe, Inc.
Walgreens Boots Alliance, Inc.
Wal-Mart de Mexico, S.A.B. de C.V. (ADR)
Wal-Mart Stores, Inc.
Weis Markets, Inc.
Whole Foods Market, Inc.
Appendix C
Appendix D: Definitions
Beverage manufacturers
Manufacturers of beverage products, including breweries,
distilleries, and wine producers.
EBITDA
Earnings before interest, taxes, depreciation, and
amortization.
Book capital
The sum of total debt and the book value of equity.
Economic profit
Economic profit spread is calculated by taking return on
invested capital (ROIC) and subtracting the weighted
average cost of capital (WACC).
34
Appendix D
Appendix D: Definitions
IRR
Internal rate of return, used in capital budgeting to
measure the profitability of investments.
Return on sales
EBIT for a reported fiscal year divided by net sales for that
same year.
Large companies
Companies with greater than $4 billion in net sales and
less than or equal to $10 billion in net sales in their last
reported fiscal year.
Market capital
Sum of total debt and total market value of equity.
Medium companies
Companies with greater than $1 billion and less than or
equal to $4 billion in net sales in their last reported fiscal
year.
Net sales
Net revenue as reported by a company.
Operating cash flow ratio
Cash flow from operations divided by current liabilities.
Return on average assets
EBIT for a reported fiscal year divided by the average of
the previous fiscal years and reported fiscal years total
assets.
Return on invested capital
Net operating profit after taxes for a reported fiscal year
divided by the average of the previous fiscal years and
reported fiscal years book capital.
Return on market capital
EBITDA for a reported fiscal year, divided by the average
of the previous fiscal years and reported fiscal years
market capital.
35
Shareholder return
Annualized percentage return from stock prices and
reinvested dividends for a fiscal year-end.
Short-term to long-term debt ratio
Short-term debt for a reported fiscal year divided by longterm debt for that same year.
Small companies
Companies with greater than $50 million and less than or
equal to $1 billion in net sales in their last reported fiscal
year.
Total debt
Total debt outstanding, including notes payable/short-term
debt, current portion of long-term debt/capital leases, and
total long-term debt.
Very large companies
Companies with greater than $10 billion in net sales in their
last reported fiscal year.
Appendix D
Acknowledgments
Contacts
Joseph Bedenbaugh
Tamara Beresky
Brian Crane
Christine Hoyte
Steffen Lauster
Steven Barr
US Leader,
Retail & Consumer Industry
PwC
415 498 5190
steven.j.barr@us.pwc.com
Brychan Manry
Samuel Shapiro
John Stell
Eduardas Valaitis
Krystin Weseman
Don Willmott
Patrick Yost
We would also like to thank the following executives, who
participated in our interview process and whose insights
appear throughout this report:
Bill Schumacher, Sunny Delight Beverages Co.
Vladimiro Sinatti, Ferrero USA
Al Williams, Bush Brothers & Company
PricewaterhouseCoopers has exercised reasonable care in the collecting, processing, and reporting of this information
but has not independently verified, validated, or audited the data to verify the accuracy or completeness of the information.
PricewaterhouseCoopers gives no express or implied warranties, including but not limited to any warranties of merchantability
or fitness for a particular purpose or use and shall not be liable to any entity or person using this document, or have any liability
with respect to this document. This report is intended for internal use only by the recipient and should not be provided in writing
or otherwise to any other third party without PricewaterhouseCoopers express written consent.
2015 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity.
Please see www.pwc.com/structure for further details. This content is for general information purposes only, and should not be used as a substitute for
consultation with professional advisors. PwC helps organisations and individuals create the value theyre looking for. Were a network of firms in 157
countries with more than 195,000 people who are committed to delivering quality in assurance, tax and advisory services. Find out more and tell us
what matters to you by visiting us at www.pwc.com. MW-15-2227