The past few years have challenged businesses on every front and in particular, consumer packaged goods (CPG) companies. Company leaders have faced challenges like changing consumer habits, supply chain issues, and increased operating expenses. These shifts are requiring CPG companies to rethink operating models, enhance commercial capabilities, and find new opportunities for growth. To be able to identify opportunities for growth in your company, you need to determine what your key financial elements for success are. There are five financial levers you can choose to engage to drive organic growth for your company.
- Pricing: This is the main driver of profitability. Today, pricing is affected by many factors that are rapidly changing which are making it more complex to manage and adapt. Your pricing may be affected by supply chain issues or even the lack of inventory available.
- Brand Promotion: It is important to understand what is attracting your customers to your CPG products, their behavior patterns, and what will entice them to make the purchase. Over time, you may find yourself adapting to meet the ever-changing needs of your customer base.
- Brand Positioning: You want to ensure that you stay relevant to your target customers. Show the value that your consumer product goods products offer and how it points to their wants and needs.
- Product Mix: This is critical to ensure your products are varied while still meeting your consumer’s habits and without driving up your bottom line, decreasing your company’s profitability without driving up your bottom line reducing your company’s profitability.
- Trade Spending: When slotting your products, offering coupons, or co-advertising, it is important to ensure that these investments are not extensively cutting into your profit margins and you are able to position yourself properly in the highly competitive CPG environment.
Many CPG companies are also adopting an analytical approach to help improve their agility and fuel profitable growth. This approach allows for more strategic decision-making around which of the levers to pull and how, especially in response to rapidly evolving consumer habits, behaviors, and expectations.
Today’s CPG business leaders need CFO-level insights that provide the clarity it takes to make increasingly complex decisions that impact your company’s ability to grow and thrive. Download our guide, “A CFO’s Perspective on Uncovering Growth Opportunities for Your CPG Business” to learn how to steer your company towards profitable growth and achieve your business goals.