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19th Annual Deutsche Bank Global Consumer Conference: 7 Key Insights

Stephen Powers
Tom Sykes
Deutsche Bank Research Management
Stefan Schneider

After two years in the virtual world Deutsche Bank Research returned to Paris to host another highly successful Global Consumer Conference. Around 700 people and including 90 companies, attended over the three days of the conference. Company and investor engagement was extremely high with more than 7,000 meeting requests. Tom Sykes, Head of European Consumer Staples and Stephen Powers, Head of US Consumer Staples, co-hosts of the event, said: “Feedback has been very positive from the companies and investment communities and we look forward to seeing everybody again in Paris in 2023 for our celebratory 20th year!”

Here are 7 key takeaways:

  1. Pricing & elasticity
    The degree to which pricing increases are achievable and the extent to which companies were seeing negative elasticity or not, rightly featured in every meeting. In general, company commentary was that price elasticity was less than expected but most saw elasticity increasing. The companies that stood out were those that were fully invested in R&D and so could price up on innovation and had the solidity of P/L to be able to support innovation properly with A&P.

  2. Input inflation and early outlooks to 2023e costs
    There was tentative commentary that input cost baskets had seen some plateauing at spot rates, although companies were reticent to call the peak in their own COGS increases. 2023e is already looking like another year of meaningful cost pressure and necessary pricing.

  3. Productivity gains and how these can be sustained
    Most companies spoke of ongoing productivity but with varying degrees of confidence. Commentary on wage cost increases was notable largely by its absence for FY 22e, although it is likely to be a greater factor in FY 23e.

  4. Re-opening dynamics and China lockdowns
    Companies exposed to broad re-opening dynamics were often those most positive on growth. Re-opening gains clouded aggregate volume growth for many such that price elasticity was harder to disentangle for those companies that had a strong re-opening benefit, with HORECA exposure clearly the most beneficial (and probably overshooting expectations). There were mixed views on the pace of companies’ sales rebounding in the face of China's lockdowns loosening, although the direction of travel was positive.

  5. e-commerce and new business model development
    Due to the high level of focus on costs, pricing and elasticity there was perhaps less focus on e-commerce than in previous years. Indeed, those companies that have under-indexed in e-commerce may have seen share gains from greater mobility and offline channel growth in some regions. That being said, e-commerce growth, cost and productivity gains remain a key part of the management agenda.

  6. ESG considerations in manufacturing, culture and product development
    Company purposefulness, adherence to science-based targets, and diversity agendas were key tenet of company presentations. Of note was the highlighting of more sustainable product alternatives by many companies and the commentary that consumers were perhaps more willing to pay for more sustainable alternatives now, although product quality and value remain uppermost.

  7. M&A and portfolio management
    There was ongoing commentary on the likelihood of smaller M&A and portfolio management. Acquisition prices had not necessarily followed listed company valuations although there was some commentary that private equity would likely be less competition.
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