How categories grow: the behavioural drivers of revenue growth

This study aimed to examine category revenue growth and decline in the consumer packaged goods (CPG) industry from a buyer behaviour perspective. Using 13 years of US household panel data for 474 categories, this study provides evidence of the incidence and behavioural drivers of category revenue changes. Unlike previous studies that focused on total sales, this study disaggregates revenue into four buyer behaviour components: penetration, purchase frequency, volume per trip, and price per volume. The findings identified penetration and price per volume as the primary drivers of growth, while category size was found to influence their relative contributions and expected magnitude of growth. Penetration loss consistently emerged as the leading cause of decline across all category sizes. This study contributes to marketing theory by highlighting the importance of buyer behaviour in category dynamics. It also provides a novel managerial framework for more effective category growth strategies.