Deutsche Bank says HPC brands benefitted most from marketing investment

Companies that invested in marketing during the recession are already seeing the benefits through improved volumes and better profits, according to the latest report from Deutsche Bank.

L'Oreal, Reckitt Benckiser and Unilever
L’Oreal, Reckitt Benckiser and Unilever

The report comes as second half results are posted by the majority of companies in the Consumer Staples sector. Deutsche points out that through the downturn and 2009 the Home and Personal Care (HPC) sector has reinvested in marketing the most, followed by food manufacturing, beer and then spirits.

Deutsche Bank highlighted in a note in January the importance of demonstrating to investors the role of marketing in company results.

HPC, which includes companies such as L’Oreal, Reckitt Benckiser and Unilever, has shown the strongest second half performance and delivered the biggest upgrades to analyst’s forecasts, while the reverse is true for spirits.

Deutsch points to AB Inbev, Carlsberg and Pernod Ricard as companies that did not invest as much in marketing and missed analysts’ forecasts for 2009.

The report says: “When we look deeper into possible drivers of the second half profit performance, we can see that the results are well correlated with A&P (Advertising & Promotion) spend in the prior six months (i.e the first half of 2009).”

It adds: “Those companies that increased spend in the first half of 2009 delivered better profits relative to expectations in the second half.”

The report also says that companies appear to be ready to be much more “aggressive” in investing in marketing in 2010 and the majority of US companies, including Hershey and Heinz, have already signalled sharp increases in investment.

Latest from Marketing Week


Access Marketing Week’s wealth of insight, analysis and opinion that will help you do your job better.

Register and receive the best content from the only UK title 100% dedicated to serving marketers' needs.

We’ll ask you just a few questions about what you do and where you work. The more we know about our visitors, the better and more relevant content we can provide for them. And, yes, knowing our audience better helps us find commercial partners too. Don't worry, we won't share your information with other parties, unless you give us permission to do so.

Register now


Our award winning editorial team (PPA Digital Brand of the Year) ask the big questions about the biggest issues on everything from strategy through to execution to help you navigate the fast moving modern marketing landscape.


From the opportunities and challenges of emerging technology to the need for greater effectiveness, from the challenge of measurement to building a marketing team fit for the future, we are your guide.


Information, inspiration and advice from the marketing world and beyond that will help you develop as a marketer and as a leader.

Having problems?

Contact us on +44 (0)20 7292 3703 or email

If you are looking for our Jobs site, please click here