We have studied multiple consumer businesses over the last 3+ years. Any one who wants to learn how to analyse a consumer business must read this thread/blogs or watch the videos:-
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In Consumer businesses following things matter the most:-
1) Category growth rates: Think of Toothpaste (1-2% growth) vs Energy Drinks (25-30% growth)
2) Growing Volumes in double Digits: Holy Grail of consumer companies.
3) Premiumization: selling higher value products.
1) Category growth rates: Think of Toothpaste (1-2% growth) vs Energy Drinks (25-30% growth)
2) Growing Volumes in double Digits: Holy Grail of consumer companies.
3) Premiumization: selling higher value products.
Few examples from the past work
1) Safari Industries:- Safari kept gaining market share vs VIP due to better price point of products and faster volume growth rates.
Understand the entire luggage industry here:
soic.in
1) Safari Industries:- Safari kept gaining market share vs VIP due to better price point of products and faster volume growth rates.
Understand the entire luggage industry here:
soic.in
2) Bector Foods and the story of Proxy investing, Market share gain and mean reversion playing out. This is one of the case studies where a Consumer company that is partly into a B2B business ended up with expanded margins + Market share gains.
Learn these mental models here!
Learn these mental models here!
3) Learn how the Beverages industry works and multiple players which exist. This is a classic example of how a new category (Energy drinks) was created.
Volume Growth Matters!
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Volume Growth Matters!
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4) Learn how the Jewellery industry works!!
Titan is an example of both Value(Pricing)+Tonnage (Volume) growth. Learn why SSSG matters in retail businesses+How to calculate Unit economics of retail companies:-
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Titan is an example of both Value(Pricing)+Tonnage (Volume) growth. Learn why SSSG matters in retail businesses+How to calculate Unit economics of retail companies:-
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5) Learn how the Alcohol industry works along with the importance of Premiumization in the growth journey of businesses (Ability to charge higher prices due to more expensive products)
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youtube.com
6) How Conglomerates should be valued and why Cigarette Volume growth led to the turn around in ITC!!
(SOTP of ITC and Analysis of Cigarette industry done way back)
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(SOTP of ITC and Analysis of Cigarette industry done way back)
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7) How a Forgotten Giant in a stagnant category is trying to innovate its way out of trouble. This is one of the videos which will teach you why Volume growth/Value Growth/Premiumisation plays a key trend when it comes to Analysing FMCG Companies!
youtube.com
youtube.com
8) How a B2B Coffee Processor operates in one of the most boring and profitable niches!
This is the story of another Proxy to FMCG industry (Coffee). How this player leveraged on Switching costs to build a solid business.
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This is the story of another Proxy to FMCG industry (Coffee). How this player leveraged on Switching costs to build a solid business.
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9) How Trent started to dominate the category of Fast/Value Fashion+Accelerated their growth rates by opening more & more stores of Zudio!
soic.in
soic.in
Finally,
A Video on the entire ecosystem, proxy plays and what to look for in a consumer business here:-
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(Bonus videos on TATA Consumer+how acquisition works in consumer sector and Westlife+How scaling up happens in QSR are there on our channel too)
A Video on the entire ecosystem, proxy plays and what to look for in a consumer business here:-
youtube.com
(Bonus videos on TATA Consumer+how acquisition works in consumer sector and Westlife+How scaling up happens in QSR are there on our channel too)
Hopefully, all this Hard-work of last 3 years has taught you how analysing a consumer business really works!!
Biggest pros:-
Simple to understand.
Biggest con: Valuations go out of whack often.
Do sign up for our free newsletter here :)
soic.in
Biggest pros:-
Simple to understand.
Biggest con: Valuations go out of whack often.
Do sign up for our free newsletter here :)
soic.in
Standard Disclaimer: Use these blogs and videos to educate yourself on the consumption sector. Nothing mentioned here is a buy or sell recommendation. All of these are past case studies.
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