Good Things Come in Small Packages from Strategy + Business looks at how small consumer packaged goods companies are gaining share on large firms. Key quote:
Several broad forces, most of them peculiar to our times, are combining to create advantageous conditions for small companies. For starters, consumers are demanding broader selection. “Selectionists,” who comprise 30 percent of the consumer market, seek greater variety and new tastes—and sometimes care deeply about other factors such as the origins of the food and how far it has been shipped. Selectionists have a stronger interest in local, boutique foods and beverages.
The chart below (from the article) shows that small firms are outperforming big firms in sales growth in 18 of the 25 categories measured.
Also interesting is the article points out that smaller firms tend to have premium prices. Key quote:
In areas where big players are least capable—such as in organic, artisanal, or regional brands—small players are more likely to take a superpremium position.
Regular readers know we've long followed these trends. And it's not just the consumer packaged goods industry that is seeing small firms increase their market share.
We call this a shift to Barbell Industry Structures and we're seeing a similar pattern across almost every industry we've looked at.
The article does a nice job of summarizing the key trends driving these industry shifts.
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