With the impact of inflation and the cost of living crisis on consumer decisions, where do the value creation opportunities lie for Private Equity in extremely disruptive times to the Consumer Products industry? 

Joining Mark Veldon today, AlixPartners Consumer Products expert Andy Searle, and Revenue and Growth specialist Julian Short, discuss consumer buying behaviour, the balance between cost impact and the potential benefits of going greener, and the importance of having data and insights to make informed pricing decisions.


Key takeaways:

  • It should come as no surprise, but expect continued inflation, commodity supply disruption and labour shortages in 2023
  • Consumer wallets are getting increasingly strained, and the impact of the cost-of-living crisis has become increasingly obvious through changes in consumer spending behaviour, which is expected to continue in the current climate
  • Blanket price surges are fast becoming ineffective, so companies must adopt a much more surgical approach to pricing to target where price increases will be most effective
  • To achieve better pricing effectiveness, companies need accurate margin analysis, consumer value perception, and competitor insights through data
  • Private equity should take advantage of larger players' expanding portfolio movements - Reposition value and supply chains to incorporate sustainability and be agile in the face of disruption
  • Private label goods are a significant opportunity for Private Equity to build up positions in regional or category players due to consumer spending shifts
  • A thoughtful and considerate approach to long-term benefits should be applied when managing sales and pricing in this inflationary environment
  • It’s critical for PortCo’s to know their business and PE to know their portfolio, analyse their position and consider how it affects their products and contracts so they can create effective strategies in the face of disruption
  • There is a serious challenge of delivering ESG in a cost-neutral manner in the face of rapidly changing consumer behaviours, regulation and investor demands
  • 4% of retailers are confident of suppliers delivering on emission reduction targets – considered as both a risk and opportunity