Consumer Taste Puts The Heat On Brand Consolidation

Compiled ByDeborah Austin Consumers wield unprecedented clout in the food industry, and manufacturers and retailers rushing to deliver powerful brands will face increased consolidation/internationalization over the next half-decade -- suggests a report by global management/information-technology consulting firm Cap Gemini Ernst & Young. Twenty to 25 global consumer-goods brands owned by about 10 brand manufacturers will take leadership in more than 100 nations, says the report, "State of the Art in Food: The Changing Face of the Food Industry." Manufacturers also will "marry" global brands with "local jewels" to meet consumers' burgeoning local-product demand. With better supply-chain integration, retailers and manufacturers in Europe could see cost savings of 8 billion euro by 2010; in the U.S., up to $7 billion. But current lack of collaboration will hamper such cost savings.