by Greg Thain
The Threshold Moment
Near-saturated mature markets groaning with infrastructure are going digital as fast as a technology that operates at light speed can allow. Very much bigger and very much hungrier markets – the emerging markets – are probably going even faster. And because they are infrastructure-light, there is, for example, no nostalgia for the printed word that slows them down. Digital is in a sense what mature markets must learn to understand: its powers of communication, its social influence, its links to everywhere and everyone and the fact that it fits in your pocket, whereas it’s a reality that emerging markets – everybody’s target – takes absolutely for granted. The consumers of the emerging markets – every operator’s brightest future – grew up with digital – every future consumer’s link to the markets, the market-places and the products. Remember, current growth rates predict that by 2020 – six short years away as we go to press - China will the world’s number one, India number three and Russia number six by PPP. In marketing terms, the consumer has become an individual. Unhappy consumers now have the opportunity via viral interaction to damage brands and thus companies. But such bad news has an equal and opposite potential for good news: benefits, new products, new trends, new fashions, consumer approval and consumer brand enthusiasm, all will travel faster and grow faster than ever.
The Future
There is nothing so foolish or (future) scorn-provoking an activity as predicting the future. Nonetheless, we’re going to try. We predict:
· That global FMCG companies are here to stay
· That their relative positions in the world league tables will reflect to a very large extent their relationships between the digital world and their continued success in the world’s emerging markets
· That seven of the world’s top twenty consumer goods manufactures are already retailers, who themselves are looking to develop prime relationships with the consumer
· That these league tables will change substantially – not quite beyond recognition – in the years to come as companies from emerging markets begin to make their presences felt: by huge acquisitions, for example
· That the takeover and major acquisition process will continue, because size improves not only buying power but also strength of negotiation with the retail trade
· And, finally, that the biggest and the best, using principally new digital technology, will be the personal marketers par excellence
And now, since we have to end the book somewhere, this seems as good a place as any, although, as endings go, it is not really final. This book’s website will be updated at least twice a year, with all the latest figures and the latest, most relevant changes. We will almost certainly be adding new in-depth analyses of more companies. And later this year we will be publishing E-Retail. But that is another story.
To be continued, then.
Greg Thain and John Bradley
FMCG – Background Reading
Brandon, R. (2011). Ugly Beauty. New York: Harper
Bucher, A. & Villines, M. (2005). The Greatest Thing Since Sliced Cheese: Stories of Kraft Foods Inventors and their Inventions. Northfield: Kraft Foods Holdings Inc.
Dienstag, E.F. (1994). In Good Company: 125 Years at the Heinz Table. New York: Warner Books Inc.
Dyer, D., Dalzell, F. & Olegario, R. (2004). Rising Tide: Lessons from 165 Years of Brand Building at Proctor & Gamble. Boston: Harvard Business School Press
Enrico, R. & Kornbluth, J. (1986). The Other Guy Blinked: How Pepsi Won the Cola Wars. New York: Bantam Books
Foster, D. R. (1975). The Story of Colgate-Palmolive: One Hundred and Sixty-Nine Years of Progress. New York: Newcomen Society in North America
Gray, J. (1954). Business Without Boundary: The Story of General Mills. Minneapolis: University of Minnesota Press
Heinrich, T. & Batchelor, B. (2004). Kotex, Kleenex, Huggies: Kimberly-Clark and the Consumer Revolution in American Business. Columbus: The Ohio State University Press
Jones, G. (2005). Renewing Unilever: Transformation and Tradition. New York: Oxford University Press
Lauder, E. (1986). Estée: A Success Story. New York: Ballantine Books
Louis, C.J. & Yazijian, H.Z., (1980). The Cola Wars. New York: Everest House
Macqueen, A. (2005). The King of Sunlight: How William Lever Cleaned up the World. London: Corgi Books
Mason, R. & Foley, J. (1972). The Food Makers. A History of General Foods Ltd. Banbury, U.K.: General Foods
Mattern, J. (2011). The Kellogg Family: Breakfast Cereal Pioneers. Edina: ABDO Publishing
Potter, S. (1959). The Magic Number: The Story of 57. London: Max Reinhardt
Prendergast, M. (1993). For God, Country & Coca-Cola. New York: Basic Books
Schwartz, F. (2002). Nestlé: The Secrets of Food, Trust and Globalization. Toronto: Key Porter Books
FMCG: What You Didn’t Know
Coca-Cola
Coca-Cola . . . ‘was far from making Pemberton either rich or even debt free. When he fell ill the next year, he sold two-thirds of his joint-ownership of his company for the princely sum of $283.24. The tired and disillusioned Pemberton would almost certainly have taken his drink to the grave.’ As it is, Coke’s founder went without it. He died penniless a year later.
Danone
Danone was founded by a man more interested in curing orphans than keeping the middle classes healthy. He named his extremely unpopular product – and so the company – after his son.
General Mills
General Mills, world famous as the creator of Wheaties, Cheerios and Betty Crocker, was once the world’s biggest toy company
Kimberley-Clark
Kimberley-Clark invented Cellucotton by accident, and although it found a highly valuable use for the material as a constituent of dressings for servicemen in the Second World War, when the war ended, it was deemed surplus to requirements. In fact, it rescued the company in true breakthrough style. How? See inside.
PepsiCo
Essentially, PeposiCo went bust three times and the man who first devised the drink left the business in disgust. PepsiCo became America’s biggest food and beverage company
Unilever
Once owned a saw-mill, a coal-mine, a limestone quarry, a paper mill and an engineering firm.
Who are the CEOs
Financials
Authors
Greg Thain has over 35 years of senior international business experience across a number of business areas: real estate, investment, property funds, agricultural consultancy, the internet, market research, retailing and publishing. For the last 20 years, in Russia and the emerging markets, he has been chairman or CEO of eight public companies and a director of companies in the UK, Australia, India, Russia, Ukraine, Romania, Hungary, Sweden, Hong Kong, Cyprus, Turkey and Greece.
Greg has also linked his commercial experience to the academic world. He is Adjunct Professor of E-Commerce, E-Retail & Marketing in International University of Monaco, and, throughout the last two decades, he has been a regular speaker at major events and conferences on the emerging markets, property, agriculture and marketing, with particular reference to how traditional marketing must now respond to the pressures and opportunities posed by the internet.
He is a co-author of Storewars: The Battle for Mindspace and Shelfspace, a major work now considered a must-have for every retail guru. Greg’s new book, FMCG: The Power of Fast-moving Consumer Goods, also co-written with John Bradley, is published in June 2014. It will be followed later in the year by E-Retailing.
John Bradley held international marketing positions in Cadbury for 24 years before becoming a consultant and writer. John is the author of two business histories, Cadbury's Purple Reign, and Fry's Chocolate Dream, and the co-author, with Greg Thain, of the updated version of Store Wars. John now lives and works in Canada.
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