Amid the FMCG Downturn, Small Manufacturers Are Tapping Big Growth

Despite the nearly $3 billion in declines across U.S. retail in the first quarter due to a shift in Easter timing and changing consumer preferences, growth is not completely elusive. In fact, some food and beverage manufacturers are finding pockets of growth, most notably small manufacturers.
Looking back five years ago, the largest food and beverage manufacturers accounted for one-third of dollar sales. Today, they account for 31{845d44a2f09c0018d802e19e78941a85dc2180e4ed7410cee0b34e8cb134ecea}, while smaller manufacturers (those with at least $100,000 in annual sales) have gained two percentage points of market share, equal to about $2 billion. Today, the smallest manufacturers, nearly 16,000 companies, account for 19{845d44a2f09c0018d802e19e78941a85dc2180e4ed7410cee0b34e8cb134ecea} of dollar sales and are driving more than half of the growth (53{845d44a2f09c0018d802e19e78941a85dc2180e4ed7410cee0b34e8cb134ecea}).

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But in a time where the U.S. retail industry is largely contracting, how are small manufacturers finding growth? What’s causing this shift? We decided to find out, so we conducted an analysis to identify commonalities among product offerings from smaller manufacturers. The analysis showed that smaller companies are putting a great emphasis on health and wellness to meet consumer demand for transparency, while also selling products at premium price points. As a result, retailers are making room for them on shelves. Nielsen – Read more…