THEY make some of the world’s best-loved products. Their logos are instantly recognisable, their advertising jingles seared in shoppers’ brains. For investors, they promise steady returns in turbulent times. They seem to be getting ever bigger: on June 30th Mondelez International made a $23 billion bid for Hershey to create the world’s biggest confectioner; and on July 7th Danone, the world’s largest yogurt maker, agreed to buy WhiteWave Foods, a natural-food group, for $12.5 billion. Yet trouble lurks for the giants in consumer packaged goods (CPG), which also include firms such as General Mills, Nestlé, Procter & Gamble and Unilever. As one executive admits in a moment of candour, “We’re kind of fucked.”

For a hint of the problem they face, take the example of Daniel Lubetzky, who began peddling his fruit-and-nut bars in health-food stores: his KIND bars are now ubiquitous, stacked in airports and Walmarts. Or that of Michael Dubin and Mark Levine, entrepreneurs irked by expensive razors, who began shipping cheaper ones directly to consumers five years ago. Their Dollar Shave Club now controls 5% of America’s razor...Continue reading