The Core Advantage: Igniting Volume Growth

Only twenty of the top 100 manufacturers grew on volume.

Of the 100 largest Fast-Moving Consumer Goods (FMCG) manufacturers in U.S. consumer goods, forty-nine grew retail sales over the past two years. Only twenty did it through volume rather than price, and almost all of their growth came from their core categories.

The opening article in this series made the case for why consumer goods companies must now look to volume for dollar growth. Pricing, the easier path to growth, has done most of the topline work since 2020. Now, it is volume’s turn. This article leverages point-of-sale data to assess how top FMCG companies have grown over the past two years and suggests how companies can set their strategies to achieve volume-led growth.

Figure 1 shows the two-year change in U.S. FMCG branded retail sales across departments, split into price/mix vs. volume contributions. Nearly every department lost volume over the two years, and most of those that still grew did so on price rather than units.

Volume is the battleground

Just twenty of the top manufacturers grew on volume.

Most FMCG manufacturers are facing this challenge. Nearly half (49) of the top 100 manufacturers saw growth in dollars. But the bulk of that growth is due to raising prices. Once each company's gain is split into what came from selling more and what came from charging more, a stark divide is visible. The dollar growth was volume-driven for just twenty of the forty-nine.

The twenty that grew on volume are not the megacaps, but mid-sized, focused businesses with core categories. These companies added roughly $6.8 billion in sales over the two years, and the gains are strikingly concentrated. Volume-led growth was won where these companies already played.

More than 90% came from each company's core—the categories it already leads—which together account for roughly 80% of its sales. Adjacent bets contributed under ten percent.

If volume-led growth is so reliant on core categories, why do so many companies miss the mark? In the volume-recovery work AlixPartners has done with consumer goods clients in recent years, a common set of themes emerges, in which companies are challenged to drive an effective growth strategy.

1. Confusing category size with the right to play 

The largest category a company competes in is not automatically its best opportunity for volume growth. The test that matters is not current scale, but where the business holds a genuine right to win, which, for most companies, is strongest in the core they already lead. Concentrating on the core and choosing where to play are the same discipline, not opposing ones. The trap is defaulting to the largest markets, including those where the advantage has eroded, rather than making deliberate tradeoffs about where and how to invest.

2. Treating “where to play” as a one-time exercise

Consumer behavior, retailer power, and category dynamics are shifting faster than a three-year plan can keep up with. The shift in share to private label, the trade-down at the value end, and the trade-up on functional benefits at the premium end are all happening within two-year windows. Where-to-play choices must be revisited at least annually, with a serious mid-cycle pressure test against the data.

"Win on taste and value" is not a plan. A real plan specifies the commercial conditions: pack architecture at the channel level, retail media spend, salesforce coverage, and a clear assortment difference between mass, club, dollar, and online. Vaguely worded intent cannot be resourced, sequenced, or held accountable, which is why it rarely moves units.

Many manufacturers attempt to category expansion to grow their topline rather than focus on their core. The twenty volume-based growers did the opposite. They protected and grew the core first, and the adjacent footprint was either small, supportive, or pruned. Adjacent wins do not solve a core-volume problem; they postpone the conversation.

The common root of all four themes is failure of choice. Manufacturers are not short of ambition or investment; they are short of the discipline to decide where unit growth is genuinely winnable and to specify what winning there requires. That discipline is a method, and it is the one that the top twenty are running, irrespective of whether they call it by name.

Where to play, how to win

AlixPartners frames volume-led growth around two linked questions: “where to play?” and “how to win?” Where to play is the choice of battlegrounds where volume growth is real and winnable, scored by weighing how attractive a segment is from the outside against the company's genuine right to win it from the inside. How to win is the set of conditions required to win on those battlegrounds, defined with enough specificity to be resourced and executed.

WHERE TO PLAY: Choosing the battleground

Every core and adjacent segment is scored on two axes: attractiveness (the external headroom available) against right to win (the brand, capability, and route-to-market strength the company brings). What emerges is a short list of battlegrounds worth contesting and an honest assessment of everything else: invest to grow, manage for cash, or exit.

For each priority battleground, there are specific plays to boost units: focus on core over adjacent; make honest trade-offs between the right to win and revenue temptation; hone specificity down to pack, price, channel, and retailer. How to win is where the growth engine from the opening article gets aimed: portfolio and pack-price architecture; innovation; promotion and marketing effectiveness; and salesforce and customer execution. The articles that follow this one, on how to win, will focus on each of those levers.

A health-focused supplements manufacturer set an ambitious goal to more than double its business within five years. The existing plan leaned heavily on a single fast-growing channel and assumed the rest of the business would follow.

Where to play. Scoring channels and categories on attractiveness against right to win redrew the priorities. Practitioner-recommended vitamins and specialty formats scored highest on winnable headroom, and a disciplined entry into natural and specialty retail emerged as a brand-right opportunity that the existing plan had underweighted. Several large current channels were explicitly held or managed rather than pushed.

How to win. The salesforce was redesigned around distinct hunter and farmer roles with coverage matched to account value, and channel pricing was tightened to drive penetration without eroding margin.

Product portfolio driving growth by refocusing segments and channels

A private-equity-owned food manufacturer was under post-pandemic margin pressure and carried competing internal views on where to focus and how to support each channel.

Where to play. An unconstrained scan evaluated more than 200 category-by-channel segments and narrowed them to 9 distinct growth plays across retail, foodservice, and in-store. Several high-revenue segments were deliberately excluded from the nine because the right-to-win check failed, despite the revenue temptation.

How to win. The plays were specific: renovate the retail portfolio around the offerings of one category, expand overall foodservice offerings, and add the manufacturing capacity required to support the volume.

Different categories, different starting points, the same discipline. In both cases, the value did not come from a bigger ambition or a new adjacency. It came from choosing battlegrounds where unit growth was genuinely winnable and defining, in specific terms, what winning there would require.

The era of pricing for growth is closing, and those manufacturers that have relied on it are about to find out how much of their topline was rented. Volume-led growth is harder. It requires deciding where unit growth is real, committing to a small number of winnable battlegrounds, and defining how to win there with enough specificity to resource and execute. Where to Play/How to Win is the repeatable operating system for doing exactly that, and the companies that adopt it now will set the terms of the next era of consumer growth.

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