"We expect operating income to rise to between 4.5% and 5.5% % in the next year or so for makers of household, personal care and other non-durable consumer products," says Senior Vice President and co-author of the report Janice Hofferber. "This is a modest acceleration from the 3% growth seen over the last year, and exceeds our previous forecast for 3%-4% growth."

The industry will benefit from its growing exposure to emerging markets, Hofferber says, as well as an improved outlook for raw material cost inflation and consistent demand for low-priced, everyday consumer products. Sales should increase because companies will not need to raise the prices of most products significantly, while many will see their margins improve as a result of renewed cost cutting.

"Companies with higher exposure to emerging Asian and Latin American markets are likely to see the strongest growth in profits due to their growing middle classes," Hofferber says. "And large companies with strong, global brands or with the capability to adapt established brands to local consumer preferences will be the most successful." L'Oreal, Estée Lauder, Shiseido, Tupperware Brands, Mattel and The Unilever Group all should do well.

The positive industry outlook does not depend on a strong recovery in mature markets such as Europe and the US, Hofferber notes. Most global consumer products companies in those regions have navigated through various currency crises, austerity measures and high unemployment by cutting costs and differentiating their brands by tiering products across different price points.

Indeed, the prolonged recovery since the 2007-09 recession and the prospect of another dip in mature markets have made consumer frugality a more permanent part of the landscape. But while this has weighed on revenues from premium brands in the past year, most companies have demonstrated early success in adapting to the "new normal" to present consumers with strong value propositions.

Moody's research subscribers can access this report at http://www.moodys.com/research/Outlook-Update-Global-Consumer-Non-Durables-Better-Prospects-for-Operating--PBC_147313.

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Janice Hofferber, CFA Senior Vice President Corporate Finance Group Moody'sInvestors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653Peter H. Abdill, CFA MD - Corporate Finance Corporate Finance Group JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653 Releasing Office: Moody's Investors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653(C) 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

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