Consumer Packaged Goods Industry Shows Resilience in Tough Economic Climate According to Grocery Manufacturers Association-PricewaterhouseCoopers Report

CPG Industry Beats S&P and Dow Jones Averages; Report Highlights Growth Strategies for Current and Future Economic Conditions

WASHINGTON, June 3, 2009 (GLOBE NEWSWIRE) -- The consumer packaged goods (CPG) industry performed significantly better than the rest of the market in 2008, as measured by the S&P 500 and Dow Jones Industrial Averages, besting both by at least ten points, according to a report released today by the Grocery Manufacturers Association (GMA) and PricewaterhouseCoopers LLP (PwC). The study also found that CPG manufacturer median sales grew approximately 10 percent last year, down just slightly from 2007 median sales figures.

The 2009 Financial Performance Report: Focusing on Today, Envisioning Tomorrow is the latest installment of the annual industry report issued by GMA and PwC and is compiled from research, interviews and financial data on 157 companies in the food, beverage and consumer products sector.

"Given the CPG industry's laser focus on delivering value, innovation and investment in the future, it's no surprise that it appears to be weathering this economic cycle better than other sectors," said GMA President and CEO Pamela Bailey. "This performance is testimony to the fact that CPG companies are fulfilling their core mission, which is giving consumers the quality products they need at an affordable price."

Additional key findings from the 2009 Financial Performance Report: Focusing on Today, Envisioning Tomorrow include:

 * The food sector experienced sales growth of 10.2 percent, evidence
   that consumers are increasingly cooking and eating at home. The
   beverage sector followed with 9.9 percent sales growth, and
   household products with 9.1 percent growth.
 * Overall CPG company median shareholder returns for 2008 were down
   slightly more than 25 percent, which actually constituted a
   significantly better performance than the rest of the market.
 * The food sector was the performance leader among the major CPG
   sectors, with 2008 median shareholder returns in down just
   21 percent.
 * Selling, general and administrative (SG&A) spending relative to
   sales remained steady from 2007 to 2008, indicating that companies
   are actively marketing and innovating existing product portfolios
   and investing in the future marketplace.

"There are lessons to be learned from the CPG top performers, which are well positioned to emerge from this recession stronger than ever before, as they continue to invest in their core brands, take advantage of scale to produce healthy margins, and manage down debt," said John Maxwell, consumer packaged goods and retail industry leader, PricewaterhouseCoopers. "Finding new and better ways to sustain cost reductions, manage IT related risks, invest strategically to capture market share, and take thoughtful approaches to tax credits and incentives are a few recommendations for CPG companies as they prepare for the recovery."

"Although the CPG industry fared better than other industries, it cannot be complacent and must remain focused on the constantly evolving consumer purchase behaviors," Maxwell continued. "This is critical as suppliers, retailers, and restaurants continue to be impacted by the liquidity crunch. There are opportunities for CPG industry companies that can capitalize on the trend of consumers focusing on product value within categories, on the move from eating out to eating in, and as consumers that have de-loaded the pantry begin to re-load."

"The report also reveals that despite the economic downturn, CPG companies are not backing off of their sustainability initiatives. In fact, many view it as a differentiator and opportunity in the marketplace. The report shows that companies reporting on sustainability efforts have substantially outperformed companies that don't," concluded Bailey.

The 2009 Financial Performance Report: Focusing on Today, Envisioning Tomorrow will be presented via Webcast by PricewaterhouseCoopers and GMA on June 9, 2009 at 2:00 p.m. EDT (click here for registration information: ). For an electronic copy of the complete report, visit or

Additional Report Highlights

The 2009 Financial Performance Report contains articles on the following key industry trends:

More than Ever, Cash Is King: CPG Companies Not Immune to Liquidity Crunch

There are steps CPG companies can take -- whether in a deep recession or as the economy starts improving -- to bolster corporate liquidity. The GMA report provides short, medium, and long term strategies that could be put in place for companies to help achieve improved liquidity.

Battening Down the Hatches: Retailers Change Tack in the Midst of Economic Storm

Manufacturers have a unique opportunity to leverage their data and provide market specific insights to help retail customers simplify and improve the category business planning approaches.

Connecting the Dots: The Potential Long-Term Effect of Tighter Credit Conditions on the CPG Industry

CPGs have to alter approach to making acquisitions, raising capital, and proving credit-worthiness in an effort to position the company for the long term.

Survive and Thrive: CPG Companies Find New and Better Ways to Generate Cast and Contain Costs

For cost reduction measures to stick, companies must clarify cost drivers and use that knowledge to create a culture of cost consciousness.

Getting Leaner through IT Cost Reduction: A Review of How Companies are Achieving Rapid and Sustainable Transformations

Companies need to ensure they find the right IT costs to cut, create efficiencies, and make these savings sustainable so they don't hinder innovation.

Extra Credit: CPG Companies Uniquely Positioned to Claim State Tax Incentives and Savings

Perform reverse sales and use tax audits to offset current audit liabilities, as well as recovering refunds for prior years.

Protect and Preserve: How Secure Is Your Intellectual Property and Customer Data?

Establish a Chief Information Security Officer, Chief Security Officer, or Chief Privacy Officer position and incorporate a structural governance system.

Still Standing: A Battle-Tested CPG Sector Looks to Better Economic Days Ahead

Those buoyed by balance sheet strength, dominant market penetration, and effective supply chains can take advantage of this environment to revitalize a value brand or scoop up a distressed business.

Divesting Non-Core Assets: When to Hold 'Em - and When to Fold 'Em

Designate a group external to issues and ensure findings can be shared without internal pressure or fear of political repercussions.

Making Sure the Price Is Right: For Both Bad Economic Times and Good, Transfer Pricing Processes Need to Be Improved

Companies must adhere to the "arm's length" standard where inter-company transactions must be priced similarly to what would have been charged between independent companies.

Sustainability and Long-Term Success: How Companies That Report Sustainability Data Measure Up against Those That Don't

Establish, report, and achieve recognition for sustainable activities in order to position your company for long term success.

About the Grocery Manufacturers Association

The Grocery Manufacturers Association (GMA) represents the world's leading food, beverage and consumer products companies. The Association promotes sound public policy, champions initiatives that increase productivity and growth and helps to protect the safety and security of the food supply through scientific excellence. The GMA board of directors is comprised of chief executive officers from the Association's member companies. The $2.1 trillion food, beverage and consumer packaged goods industry employs 14 million workers, and contributes over $1 trillion in added value to the nation's economy. For more information, visit the GMA Web site at

About PricewaterhouseCoopers

PricewaterhouseCoopers LLP ( provides industry-focused assurance, tax and advisory services to build public trust and enhance value for its clients and their stakeholders. More than 155,000 people in 153 countries across our network share their thinking, experience and solutions to develop fresh perspectives and practical advice.

"PricewaterhouseCoopers" refers to PricewaterhouseCoopers LLP or, as the context requires, the PricewaterhouseCoopers global network or other member firms of the network, each of which is a separate and independent legal entity.



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