CPG Industry Sales, Returns Up In 2002; GMA, Swander Pace & Company Report Includes Case Studies of Strategy Successes.

Business Editors

COLORADO SPRINGS, Colo.--(BUSINESS WIRE)--Sept. 22, 2003

The CPG industry's financial performance in 2002 defied recessionary expectations as median net sales rose 4.6 percent compared to 2.9 percent in 2001, and returns on sales and assets reached the highest levels in five years, according to a study released today by Swander Pace & Company, a member of Kurt Salmon Associates, and the Grocery Manufacturers of America at GMA's Merchandising, Sales and Marketing Conference.

The report also includes case studies from three manufacturers: Robert Mondavi, Newell Rubbermaid and Pepsico. The companies represent three different growth strategy success stories, such as innovation in core categories (Newell Rubbermaid), building share (Robert Mondavi) and creating new growth opportunities via product innovation, selective acquisitions and marketing and distribution strategies (Pepsico).

The median return on sales in all companies was 8.1 percent, compared to 7.3 percent in 2001, while median return on assets was 10.6 percent in 2002, up from 9.4 percent the previous year. Large companies ($3 billion or more in net sales) led the way, returning 16.2 percent on sales and 14.4 percent on assets. Small companies (less than $300 million in sales) saw a drop in return on sales (4.6 percent in 2002 compared to 5.3 percent in 2001) and slight increase in return on assets (7.1 percent in 2002, up from 6.5 percent in 2001).

The study collected data from 173 public and private companies, largely from GMA's members, and also compared results among sectors - food manufacturers, beverage makers and household and personal care manufacturers. Beverage manufacturers showed the highest median sales growth, 5.6 percent, while HPC manufacturers were the only segment to realize positive one-year shareholder return in 2002 (1.3 percent).

Copies of the 2003 Financial Performance Report are available from the GMA Membership Department at [phone], or may be downloaded at http://www.gmabrands.com/news/docs/fpr_2003.pdf

GMA is the world's largest association of food, beverage and consumer product companies. With U.S. sales of more than $500 billion, GMA members employ more than 2.5 million workers in all 50 states. The organization applies legal, scientific and political expertise from its member companies to vital food, nutrition and public policy issues affecting the industry. Led by a board of 42 Chief Executive Officers, GMA speaks for food and consumer product manufacturers and sales agencies at the state, federal and international levels on legislative and regulatory issues. The association also leads efforts to increase productivity, efficiency and growth in the food, beverage and consumer products industry.

Swander Pace & Company, a member of Kurt Salmon Associates, is a strategy consulting firm specializing in the consumer packaged goods industry. We bring unparalleled industry experience and a wide rage of capabilities together to help clients in consumer-related businesses drive profitable growth. Kurt Salmon Associates (KSA) is the premier global management consulting firm specializing in retail and consumer products. Our clients are retail leaders and suppliers of the world's best-known brands. We help clients achieve significant gains in strategic position, growth, profits, and overall financial performance. KSA's portfolio of services includes strategy, merchandising, operations improvement, logistics, and information technology.