Consumer packaged goods companies spend billions annually on trade promotion, and pressure from retailers, competitors, and consumers is increasing. A survey by Strategy& revealed that 85% of CPG companies struggle with overspending and ineffective trade management and, despite the significant value being invested, they often do not fully understand how to maximise their ROI.
At Strategy&, our dedicated TPE team brings significant practical experience and expertise to help consumer products companies improve their trade operations. We work shoulder-to-shoulder with you to deliver practical solutions like Performance Analyzer, a PwC product, which is designed to improve the ROI of your trade spend while creating enduring competitive advantage. It is not unusual for our clients to realize a 5% to 20% improvement in annual profits within one to two years of program launch.
Strategy& has a long history of helping its clients transform their trade promotion capabilities. We have achieved tangible results for consumer goods companies across all major segments including food, beverage, consumer healthcare, and household non-durables — several with more $1 billion in annual trade spending.
We work closely with the major TPM software providers to help advance our clients’ agendas, and have also developed a proprietary analytics platform, the PwC Performance Analyzer, which supports our clients’ revenue management and profit generation. The senior members of our TPE team have been with Strategy& for at least ten years and each has personally been involved with three to ten major trade programs. This combination of experience and technological expertise positions us to optimize our clients’ use of trade promotions.
The five key building blocks of Trade Promotion Excellence
A large packaged foods company retained Strategy& to help transform its business. A key goal of this engagement was to drive $100 million in profit improvement from its trade investment, which represented its second biggest line item behind cost of goods sold. Strategy& ran a capability diagnostic and provided a detailed roadmap. We helped the company drive a "zero loss mindset to analyzing trade spend," a new way of managing trade spend as described by the company’s CEO, identifying more than $25 million in profit improvement and building capabilities to realize the full $100 million of profit improvement.
A large consumer goods company was facing productivity and decision-making challenges, related to inconsistent processes, inefficient planning tools, seasonality of the business, and insufficient data. Strategy& helped drive a trade transformation by assessing core capabilities, supporting key design decisions and change management, and implementing the SAP trade solution. Our work resulted in enhanced customer investment decisions using market data such as POS, IRI, and Spin. Additionally, the centralisation of fit-for purpose planning in a single system enabled easy-to-use predictive analytics and scenario planning, leading to optimised customer planning and management.