Dairy giant Danone comes out top of the list for category dominance in the European food sector, followed by Unilever and Nestle, according to NutraIngredients.com.
The report, quoting US research firm Sanford C. Bernstein, lists the industry’s three big players — in the four growth areas: categories, markets, category dominance and execution – as Nestle, Unilever and Danone.
Bernstein judged category dominance on a category/country level, using 100 food categories in 80 countries.
It found that Danone takes the top slot in category dominance, prompted by the fact that it is a very focused company that only largely operates in four businesses.
“Danone is the number one player in categories/markets representing 71% of sales, and is Top 2 in 91%. More specifically, in yoghurts it is number one in categories/markets representing 84% of sales, and is Top 2 in an exceptional 96%,” according to the Bernstein report.
Category dominance allows for a company to grow faster and be more profitable than smaller, less dominant players in a category.
Holding the top position in a category is considered a major business advantage, not only because of higher sales volumes but also because it allows for improved negotiations with retailers and better pricing power, according to the report.
Unilever came in “a strong second place”. The report estimates it coming in at number one in 63% of sales and Top 2 in 85%. In certain categories, such as ice cream, Unilever was found to be dominant in many of the European markets in which it operates.
Nestle came in at third place, being number one in markets representing 59% of sales and Top 2 in 82%. “It is interesting to note that one of the categories that drags down its dominance measure is chocolate confectionery, even when calculated on a country by country basis,” said Bernstein.
The research firm notes noted that despite being behind its other two competitors in measurements of category dominance, Nestle is “certainly still strong.
