These days, global corporations routinely tie up 20 percent or more of their assets in alliances. Yet CEOs in the consumer-packaged-goods sector have historically preferred mergers and acquisitions to partnerships. This predilection is changing, however, given the pressure for earnings growth and the paucity of M&A targets in most product categories, so over the next few years we expect to see more alliances in this sector. A few companies, such as Nestlé, Procter & Gamble, and Starbucks, are already realizing good returns on their alliance activity: our analysis of 77 leading consumer-packaged-goods enterprises found that the 10 most alliance-intensive ones delivered average total returns to shareholders nearly four times larger than the rest. What is more, the highest-performing companies captured a disproportionate share of the alliance opportunities and locked in the best partners. One key to success is pursuing a full range of alliance opportunities—not just geographic-expansion or simple co-marketing deals but also cost reduction plays and partnerships for innovation.