THE POWER OF MANAGING BRANDS GLOBALLY
Lessons from the CPG Sector’s Most Successful Players
Booz & Company
Executive Summary The question of how to manage global brands—such as Coca- Cola, Gillette, and Nestlé, as well as those with less global recognition, such as Wrigley, Avon, and Campbell’s—across a set of diverse geographies has spurred significant debate among consumer packaged goods (CPG) companies. The complexity stems in part from the fact that there are very few truly global brands: CPG “global brands” are more often multinational or regional. Of the top 100 recognized global brands, just 21 are from the CPG sector, and only 14 of them have a value of more than US$5 billion (see Exhibit 1, page 2).
As CPG companies have turned to developing markets and regional expansion as their primary paths to growth, their ability to develop truly global brands and to manage portfolios of brands globally has become essential. The geographic diversity of CPG companies’ businesses, as well as the rela- tive importance of international business to the overall portfolio, has reached unprecedented levels. For instance, European companies Unilever and Nestlé have long had global reach, but their interna- tional business is on the rise: Uni- lever now derives 62 percent of its revenues from outside Europe, compared to 54 percent a decade ago, while Nestlé has seen a simi- lar increase to 63 percent from 58 percent. Meanwhile, Wrigley and Procter & Gamble now see 67 percent and 54 percent of their sales, respectively, coming from outside North America (up from 52 percent and 50 percent a decade ago).
There are clear benefits to the development of global brands— and, more broadly speaking, to global coordination across brands and markets. Companies can