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The 2011 Mid-Year Performance Review The Top 100 Brands EXECUTIVE

Summary

How are leading CPG brands performing in today’s difficult economy? The answer is mixed. Our data shows that, as a group, the Top 100 Brands within the Catalina Network grew only slightly during a 52-week period ending mid-year 2011. Our findings also show that revenues could have increased far more significantly had brands held onto their loyal consumers. For the average brand, the lost opportunity due to loyalty declines and defections was nearly four times greater than its growth in sales.

TOP 100 RESULTS Total revenues for the Top 100 Brands grew less than one percent. Forty-three brands declined in revenues by an average of $23.6 million, while 57 brands increased sales revenues by an average of $23.3 million (see figure 2, page 3). By category, top grocery brands within the beverage, shelf stable, produce and dairy segments achieved average growth rates that were two to three times greater than the Top 100. Meanwhile, on average, the top brands in frozen foods and bakery had declining revenues (see figure 7, page 5).

Lost loyalty digs a deep financial hole out of which brands must fight to climb every year. While the average Top 100 Brand managed to increase revenues by 2.2 percent during the 52-week period ending at the start of July 2011, that growth rate could have been much greater had they held onto their highly loyal consumers from the previous period. In fact, the lost opportunity due to reduced loyalty and defection was equal to 8.5 percent of total revenues for the average brand, or nearly four times greater than the average revenue increase. FIG. 1

WHAT STUNTED GROWTH? Lost opportunity from loyalty erosion was nearly 4X greater than the revenue increase realized by the average Top 100 Brand.

8.5%

SURPRISING EFFECTS OF LOYALTY The 2011 Mid-Year Performance Review also demonstrates the tremendous impact of consumer loyalty on brands. Loyalty is one of the most powerful, yet least understood forces in building CPG brands. Every year, brands experience a dramatic exodus of previously loyal consumers, resulting in significant reductions in potential volume and share.

Š 2011 Catalina Marketing Corporation

2.2%

Revenue Gain for Average Brand

Lost Opportunity for Average Brand

Source: Sample of the Catalina Network, spanning about 21,000 Food, Drug, and Mass stores. Although this does not include all Retailers and Stores, conclusions are generally in line with national network results.


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