2015 was not kind to many established brands – particularly within the FMCG sector.  In the fall, AdAge via Catalina reported that large FMCG brands in the top 100 lost market share – even though their respective categories grew.  In July, OC&C reported that sales growth across the top 50 FMCG Brands had decelerated significantly, likely triggering a wave of spin-offs and restructuring.  In 2015, P&G said goodbye to a large number of brands – and a number of mergers were rumored to be in the works across the FMCG landscape.

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Sure, some of the share decline at the giant multi-brand holding companies can be attributed to currency volatility and challenges in emerging markets where business has been tough due to geo-political and cyclical factors. However, OC&C said that organic growth is stalling at constant exchange rates, and that it is at its lowest rate for 10 years, excluding 2009. 

Will Hayllar, Partner at OC&C Strategy Consultants, said:

“This year’s research has shown that in the FMCG sector, bigger isn’t always better, with scale no longer giving companies the edge it once did. Many of the ‘Goliaths’ in our Global 50 ranking are encumbered by their heavy institutional structures, leading to sluggish decision-making and slower innovation. This has given smaller local players – the ‘Davids’ – an opportunity to seize market share across the board.”

eBench found that there is some hope for big brands, however.  Large brands like Starbucks, Red Bull, H&M, etc. figured out how to leverage emerging digital platforms to authentically engage consumers across the topics they care about – without necessarily paying social platforms for reach. And when they did pay for reach, they promoted real “content hits” that delivered outstanding ROIs.  These “insider brands” drove significant share of voice in a tough environment.  Head over to the eBench homepage to have a look at their interesting graph of insider vs traditional brands.  

Scale is great – but can make us lazy 

Certainly large brands are experiencing challenging times, especially when it comes to consumer engagement and marketing. Like Will Hayllar points out, many of the levers of competitive advantage for FMCGs have disappeared. Having a “scale” advantage in terms of reach often breeds a false sense of security in an age where “insider brands” with a bit of celebrity can jump onto the store shelves & steal market share from an FMCG giant quickly – without a lot of paid reach.

Just being “good” won’t cut it anymore …     

Even hyper-targeted reach and superior content distribution across the web won’t help you win if your content is mediocre.  Consumers only have so much time and are only engaging with the stuff they care about – see the rise of global ad blockers in 4 charts here.  If you are going to promote content – it needs to be a proven hit.   In our testing of Promoting Pins content at Ahalogy, we see a 2x to 5x difference in CPM and CPC price results based on the content.  See Bob Gilbreath’s excellent article over on LinkedIn in for more details.

Think like an insider brand – win organically first   

The large brands that survive and thrive will find ways to move fast and build scrappy models of content testing/learning to win organically across platforms with consumers first.  Watching and learning from the insider brands can certainly help too …

It will be an interesting 2016 for sure.  If the large brands continue to lose market share, we will likely to see continued consolidation and turmoil at the holding companies – I hope that we see a number of brands adopt “insider approaches” to win in a rapidly evolving landscape.