An Inflation-Proof Recipe for Revenue Growth Management
We helped a global food company look beyond price to improve profitability.
Despite steadily growing over the past few years, a leading multinational food manufacturer fell short of its full potential. By focusing solely on growing the company’s market share and volume, the leadership team at FoodCo* took their eye off the prize: sustainable profits.
With inflationary pressures adding urgency, they reached out to us to help steer them to value growth. Our team helped FoodCo build its revenue growth management (RGM) muscles in order to safeguard both growth and profit.
Our starting point was establishing a shared goal: Increase FoodCo’s profitability across key categories by 200 basis points to 250 basis points net of inflation. Beginning with pilots in seven European markets, they harnessed our RGM Maturity Index to measure existing capabilities against more than 200 benchmarks.
Then, we collectively set out to find and fill the gaps that would help FoodCo build inflation-proof capabilities. Specifically, we helped them identify opportunities to evolve pack price architecture to favorably shape consumer brand perception, reallocate promo investments to expand category performance and penetration while achieving better ROI, prioritize SKUs with higher growth potential, and focus trade contract investment on in-store opportunities to drive category performance. Together, these actions delivered significant growth across category development, FoodCo’s profits, and retailers’ margins.
Equipped with an integrated blueprint for managing RGM, FoodCo needed internal capabilities to make it stick. We helped them embed RGM initiatives in all commercial routines and deploy simple tools to ensure continuous improvement.
Firmly locking in RGM capabilities also meant training internal champions to flex the new muscles in preparation for future challenges. Using a train-the-trainer approach, we helped FoodCo conduct one-on-one sessions with key individuals and socialize the RGM methodology with the full commercial organization.
To further ensure that actions could be seamlessly rolled out to other markets and categories, we created a playbook that included governance, an explanation of how all departments would interface with RGM activities, and a rigorous capabilities buildup program, including tutorials and templates. Integral to this process was the creation of the RGM control tower to measure progress, drive adoption, and reinforce RGM rigor around routines, key performance indicators, roles and responsibilities, and tools and data sets.
After implementing these new capabilities across the seven pilots, FoodCo saw an impressive 9% growth in gross profits and 3% growth in revenue, with one-third of that growth delivered within the first year. During the following year, we expanded the approach to additional markets that are currently generating scale results.
What’s more, while the pilots accelerated RGM adoption, the company’s customer-back approach sparked longer-term outcomes that included improved transparency of category growth and profit drivers. And by bringing different teams together, FoodCo enhanced its cross-functional view of the business—a win-win for employees and customers.
*We take our clients' confidentiality seriously. While we've changed their names, the results are real.
Kontaktieren Sie Bain