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Consumer Packaged Goods Industry

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The Consumer Packaged Goods (CPG) Industry and Solution Providers

By Jay R. Jeffreys, PE; Director, Wonderware Solution Provider Programs

Table of Contents 1. The CPG Industry ................................................................................................................................... 3 2. Industry Comparisons ........................................................................................................................... 4 3. What CPG Companies Need from Solution Providers ................................................................ 5

The Consumer Packaged Goods (CPG) Industry and Solution Providers

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1.

The CPG Industry

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The non-cyclical category includes beverages, tobacco, personal products, office supplies and food items. The Industry Browser information tools at the Yahoo! Finance Industry Center (biz.yahoo.com/p/3conameu.html) may surprise you in terms of the relative sizes and profitability of some segments in the Consumer Goods categories. For instance, the top five segments by market capitalization are as follows:

The Consumer Packaged Goods (CPG) Industry and Solution Providers

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Segment Auto manufacturers Food – major diversified Cigarettes Beverages – soft drinks Cleaning products

Market Capitalization ($B) 296 281 269 266 205

The largest segments are not necessarily the most profitable, however. The top five segments by overall profit margin are: Segment Cigarettes Cleaning products Beverages – brewers Beverages – soft drinks Confectioners Net Profit Margin (%) 17 13 12 11 10

Somewhat surprisingly, the largest segment by market capitalization – Auto Manufacturers – is one of the least profitable at just 1.8%. The sizable and highly visible – but keenly competitive – Electronic Equipment category is squeezed down to just 2.5% overall net margin.

3.

What CPG Companies Need from Solution Providers

For our Consumer Packaged Goods customers to succeed, they must deal with a number of internal and external pressures and demands. Those internal drivers include: Protecting or increasing profits

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