Global Brand Giants to Tighten Grip on Food Industry

18 February 2002

Consolidation in the world’s food industry continues apace, with a handful of global brands set to dominate the sector in coming years, according to a new report from consultancy giant Cap Gemini Ernst & Young.

Entitled State of the Art in Food, the survey predicts that “20 to 25 global brands will emerge in various categories of fast moving consumer goods. These brands will occupy a leadership position in more than 100 countries and will be owned by approximately 10 global brand manufacturers,” a press release stated.

Retailers expected to be part of this culinary elite include global number one Wal-Mart, Safeway US, Delhaize, Dutch operator Royal Ahold, UK-based Tesco and France’s Carrefour. Such groups, says the report, will take more control of the supply chain as they seek to strengthen ties with customers, a trend that could lead manufacturers to market direct to consumers.

The survey – which polled 220 industry executives from nineteen nations around the world – also forecasts that consumers will gain more power and that food stores will get bigger. E-commerce is expected to remain a fairly small sales outlet, accounting for no more than 5% of the sector in the next decade.

“For an industry where change is typically measured in decades, the pace and magnitude have really accelerated,” declared Fred Crawford, executive vp of the consulting group’s Consumer Products, Retail and Distribution division.

“The consumer is wielding unprecedented power and the need for establishing a powerful brand – whether retailer or manufacturer – grows as companies try to reach consumers in multiple regions.”

Data sourced from: Financial Times; Cap Gemini Ernst & Young; additional content by WARC staff