Consumer goods, leisure, retail
Consumer Goods & Retail
Branding is the key
The Consumer Goods & Retail industry is one of the largest industries in the world. The sales of the food industry alone in the entire EU reached €1,000 billion. The brand values of the most valuable corporate brands have experienced a significant increase. These data demonstrate the size of this industry and its importance to private equity investors.
The industry includes FMCG (fast moving consumer goods) as well as consumer durables, the leisure industry with hotels, tourism, restaurants and entertainment, and retail and distributors.
Omni-channel sales, inflation, and supply chain issues are changing the market
In general, the consumer goods market in the DACH region is experiencing extreme change. Geopolitical and social influences as well as financial-technical factors such as inflation are changing purchasing behavior for both consumer goods and consumer durables/FMCG. The supply chain is disrupted, creating supply chain bottlenecks that change companies’ business operations and procurement processes.
In 2021, the export ratio of the consumer durables sub-sector in Germany alone rose to an all-time high of 51 percent. With changing market dynamics, market participants must find new ways to stay competitive. Omni- and multichannel sales increase the options of contact points and purchasing behavior on the consumer side. Portfolio companies of financial investors also increasingly have to deal with non-European competition.
The Corona crisis has drastically changed consumer behavior in the FMCG market. Priorities have changed and companies need to respond. Inflation changes price sensitivity. Companies need to find ways to make the most of digitization opportunities, taking into account regulatory, supply chain and omnichannel aspects.
Technology on the rise
Portfolio companies must also respond to this market situation in order to minimize risks but also to seize emerging opportunities and gain a competitive advantage from them. Especially in the FMCG market, due to a changing perception of nutritional philosophy, new opportunities for products are emerging, supported by the agricultural industry, among others. Blockchain technology, sensor technology and IoT also provide the options to improve the level of digitalization and trust between stakeholders. In the retail sector, multi- and omnichannel aspects are changing the opportunities for companies. Consumers pay attention to socially and ecologically responsible behavior on the part of companies. Thus, corporate responsibility and sustainability are becoming important aspects of purchasing behavior and companies need to respond to these changes.
Insights: How do customers decide? Customer Journey Benchmarking
The FMCG market is characterized by a variety of different trends such as vegan food, non-alcoholic mixed drinks, from which substantial opportunities for portfolio companies of financial investors arise, with sustainability and corporate responsibility being important factors in purchasing decisions. Due to the large number of such small businesses, it becomes a challenge to find the right target that promises a long-term prospect of success.
Since short-term or longer purchase decision processes prevail in different contexts for FMCG and consumer durables, the customer journeys in the omni- or multichannel environment must be analyzed in detail at companies in order to achieve a significant competitive advantage from them.
Hotel chains are also becoming more and more interesting for private equity investors, on the one hand because of the potentially currently favorable entry – due to the effects of the Corona pandemic – and on the other hand in connection with the expectation of growth in the leisure market.
Our industry expertise
Focus of our project experience in the sub-sectors
Consumer Goods
- Clothing and fashion (e.g. women’s jeans, branded men’s pants, underwear and lingerie, men’s suits, branded women’s fashion)
- Outdoor and sports (e.g. winter sports knitted hats, ski and outdoor clothing, functional sportswear, wetness barrier membrane clothing, outdoor and functional clothing)
- Cosmetics and body care (e.g. home shopping cosmetics, clean beauty cosmetics, hotel cosmetics, natural cosmetics)
- Luxury goods (e.g. real and costume jewelry, jeweler’s and watchmaker’s chain)
- Sports and leisure articles (e.g. e-bikes, high-alpine ski equipment, suppliers of motorcycle clothing, accessories and technology, specialist dealers in hunting equipment and shooting sports)
- Pet supplies (e.g. internet trading platform for pet food and pet supplies)
- Household, home and garden products (e.g. online kitchen retailers, bathroom furniture manufacturers, household appliances eCommerce, garden furniture online retailers, granite kitchen sink manufacturers, power tools manufacturers, screw tool manufacturers).
- Health and lifestyle (e.g. branded eyewear manufacturers, optical chain, hearing aid manufacturers, hearing aid stores)
Food & Drinks
- Meat products (e.g. sausage and ham specialties, canned meat, snack products)
- Beverages (e.g., bottled water bottlers, gallon water dispenser providers, tap-based water dispenser providers).
- Frozen food (e.g. frozen meat convenience products, frozen finger food and snack products, frozen potato products, frozen home service)
- Baked goods (e.g. large bakeries, bakery chains)
- Confectionery (e.g. confectionery retail, branded chocolate, surface finishing of confectionery)
Tourism and leisure
- Gastronomy (e.g. various system gastronomy concepts, Mexican restaurant chain, steakhouse chain)
- Tour operators (e.g. package tour operators for round trips and cruises, river cruise operators, luxury tour operators)
Retail
- Offline retailers (e.g., bakery chains, specialty grocery stores)
- Online retailers (e.g., online fashion retailers, online home appliances)
- Direct-to-consumer only distribution (e.g. audio product manufacturers)
- Multichannel retailing (e.g. catalog mail order and online retailing of apparel and fashion)
- Omnichannel retail (e.g. women’s fashion, sporting goods)
- Shopping clubs (e.g. online and offline trading of remainders)
- Employee benefit portals (e.g., multi-channel retailers of branded apparel and housewares for unions and businesses, airport stores for airport employees)
- Service station retail (e.g. leading service station store operator)
- Home shopping (e.g. branded cosmetic products)
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