Global Consumer Companies: Investment and Innovation the recipe for growth and value creation
Dry January does not mean very much to a teetotal person like myself but it does trigger a thought about how consumer behaviour and companies have evolved over the years. This year’s company reporting season has shown a startling difference between companies that ‘deliver’ and those that do not. This is no exception in the consumer sector and it is an important differentiator for our approach to investing in quality and value for the long-term.
During the years after the global financial crisis, when ‘deflation’ was the buzzword, many consumer companies were forced to abandon their historical growth models where small annual price increases could be passed onto the consumers to buoy earnings growth. Instead, they resorted to consolidation, cost cutting and margin improvement to meet the growth demand of their investors. Investment group 3G Capital pioneered this with Anheuser Busch and Kraft Heinz. Other companies followed their example