Leadership Turbulence in Consumer Goods: Implications for Shareholder Value and Strategic Direction

The consumer goods sector is undergoing a leadership reckoning. According to the Global CEO Turnover Index, CEO departures in the first half of 2025 fell by 11% compared to H1 2024, with 110 CEOs exiting their roles amid regulatory uncertainty and macroeconomic headwinds [1]. This decline, however, masks a deeper story: the average tenure of outgoing CEOs has plummeted to 6.8 years—the shortest since 2018—reflecting the sector’s increasingly volatile operating environment [1]. For investors, the implications are clear: leadership turbulence is reshaping strategic direction and shareholder value, often with mixed results.

The Drivers of Leadership Instability

The consumer goods industry faces a perfect storm of challenges. Retailers are squeezing margins by prioritizing private-label products, while consumers demand hyper-personalized offerings in a fragmented market [2]. Compounding these pressures, supply chain disruptions and inflation have forced companies to rethink pricing strategies. As one McKinsey report notes, “CPG firms are no longer outperforming; they’re now in the bottom quartile for shareholder returns” [3]. This environment has created a leadership vacuum, with boards prioritizing agility over tenure. For example, Procter & Gamble’s 2025 appointment of Shailesh Jejurikar signaled a pivot toward AI-driven R&D and sustainability, initiatives that now account for 40% of its sales [4].

Yet not all transitions yield positive outcomes. A 2025 study by The Conference Board found that the gap between CEO turnover rates at high- and low-performing S&P 500 companies narrowed from 8.9% in 2019 to 2.2% in 2020, suggesting that factors beyond financial performance—such as ESG alignment and governance—are now critical in succession decisions [5]. This shift is particularly pronounced in the consumer goods sector, where 71% of CEOs cite trade policy uncertainty as a barrier to M&A activity [6].

Financial Implications: Volatility and Value Destruction

The financial toll of leadership instability is stark. The five-year annualized shareholder return for the largest consumer goods companies by market capitalization has fallen by more than half compared to the prior period [7]. This decline coincides with a broader industry slowdown: in 2024, the top 50 CPG companies posted just 1.2% year-over-year revenue growth, driven largely by price hikes rather than volume [8].

Case studies underscore the duality of outcomes. Unilever’s Hein Schumacher, for instance, oversaw a 4.2% underlying sales growth in 2024 through portfolio rationalization and margin expansion, contributing to an 18.4% operating margin [9]. Conversely, companies like Coca-Cola, which have maintained stable leadership, have seen their ESG scores and stock performance remain resilient [10]. Meanwhile, poorly managed transitions—such as those at Advantage Solutions—highlight the risks of misalignment: despite $103 million in cash reserves, the firm’s Branded Services segment saw a 10% revenue decline before a leadership overhaul [11].

Strategic Reorientation: The Path Forward

For long-term investors, the key lies in identifying firms that balance leadership continuity with strategic reinvention. The rise of chief sustainability officers (CSOs) and AI-driven operations suggests that future-proofing requires more than cost-cutting—it demands a reimagining of value creation. As Deloitte’s 2025 industry outlook notes, “CPG companies must shift from price-driven growth to volume-based strategies, leveraging digital tools to meet evolving consumer expectations” [12].

However, execution remains the wild card. A 2025 study in Scientific Direct found that managerial turnover from underqualified leaders to skilled ones correlates with improved firm performance, emphasizing the importance of capability over tenure [13]. This aligns with P&G’s success under Jejurikar, whose focus on innovation and sustainability has positioned the company as a hybrid of a mature dividend payer and a growth-oriented entity [4].

Conclusion: Navigating the Leadership Maze

The consumer goods sector’s leadership turbulence is neither a temporary blip nor a uniform crisis. While turnover rates have stabilized, the quality of transitions—and their alignment with strategic priorities—will determine whether companies can reclaim their growth trajectories. For investors, the lesson is twofold: first, to scrutinize leadership changes for signals of strategic coherence, and second, to prioritize firms that integrate ESG and technological agility into their DNA. In an industry where shareholder returns have fallen to the bottom quartile [3], the next decade will belong to those who can navigate the turbulence with vision, not just velocity.

Source:
[1] Global CEO Turnover Index, [https://www.russellreynolds.com/en/insights/reports-surveys/global-ceo-turnover-index]
[2] CPG industry trends in 2024: Rescuing the decade, [https://www.mckinsey.com/industries/consumer-packaged-goods/our-insights/rescuing-the-decade-a-dual-agenda-for-the-consumer-goods-industry]
[3] Consumer Products Report 2025: CPG Industry Outlook, [https://www.bain.com/insights/consumer-products-report-2025-reclaiming-relevance-in-the-gen-ai-era/]
[4] Procter & Gamble's Leadership Transition and Strategic Implications, [https://www.ainvest.com/news/procter-gamble-leadership-transition-strategic-implications-2507/]
[5] Is Stock Performance Losing Influence on Whether a CEO Stays or Goes?, [https://www.conference-board.org/press/Stock-Performance-Losing-Influence-CEO-Stays-or-Goes]
[6] CEOs navigate M&A landscape shaken by tariffs and trade, [https://www.ey.com/en_gl/ceo/ceo-outlook-global-report]
[7] Consumer Products Report 2025: CPG Industry Outlook, [https://www.bain.com/insights/consumer-products-report-2025-reclaiming-relevance-in-the-gen-ai-era/]
[8] CPG industry trends in 2024: Rescuing the decade, [https://www.mckinsey.com/industries/consumer-packaged-goods/our-insights/rescuing-the-decade-a-dual-agenda-for-the-consumer-goods-industry]
[9] Improved performance – volume growth, gross margin expansion, [https://www.unilever.com/news/press-and-media/press-releases/2025/improved-performance-led-by-volume-growth-and-gross-margin-expansion/]
[10] Leadership Turbulence in Global Consumer Goods, [https://www.ainvest.com/news/leadership-turbulence-global-consumer-goods-means-shareholder-strategic-direction-2509/]
[11] Leadership Reinvention at Advantage Solutions: Strategic Implications, [https://www.ainvest.com/news/leadership-reinvention-advantage-solutions-strategic-implications-cpg-market-dominance-2508/]
[12] 2025 Consumer Products Industry Outlook, [https://www.deloitte.com/us/en/insights/industry/consumer-products/consumer-products-industry-outlook.html]
[13] CEO skill and firm performance, [https://www.sciencedirect.com/science/article/pii/S0889158325000292]