The FMCG sector has continued to cope with the effects of the COVID-19 pandemic, including the prolonged effects of supply chain disruptions, high commodity prices, and inflation. Pressured by a big step up in production and transportation costs and sustained high consumer demand, manufacturers and retailers have operated pricing and shopper-focused initiatives across multiple categories and channels in an attempt to protect margins and soften the impact on shoppers. Concerned with increasing living costs, shoppers have started to employ multiple money-saving tactics, from switching brands/channels to moving to private labels, and/or stockpiling.
Global Revenue Management Survey – 2022 Edition
Curious to understand how these persistent challenges are affecting FMCG organisations as global conflicts unfold, Kantar has conducted the second edition of its Revenue Management study and surveyed the world’s leading figures in the FMCG industry: gathering their perceptions on the effects of the structural changes they have seen, and their opinions on how the sector may change in the future to safeguard profitability.
New challenges and a renewed commitment to volume, revenue and profitability
The prevalent perception among FMCGs is that commercial challenges will be more pressing across the board and that going back to pre-pandemic ways of operating is just not possible, and would also be counter-productive. The economic fallout will continue to trickle down to retail, forcing FMCG manufacturers to rethink their portfolio mix, shopper, and trade strategies. This year’s study confirms FMCG organisations’ commitment to volume, revenue and profitability growth and shows their renewed attention to revising and reshaping their pricing strategies, portfolio mix and trade promotion tactics. Faced with the complexity of the current situation and future uncertainties, companies indicate their intention to increase their trade investments across multiple commercial levers and channels.
RGM at the forefront of the FMCG agenda
The need to take a holistic approach to balance the impact of multiple levers on the P&L, from price increases to package innovation, from premiumisation to short-term trade promotions, means revenue growth management capabilities are at the forefront of the FMCG agenda. This indicates the intent of FMCGs to further invest in revenue management to better equip their global organisations with scalable, repeatable, and intelligent systems, capabilities, and processes. Growth-oriented companies fast-forwarded their RGM digital transformation programmes during the pandemic period and will continue to do so to win at times of inflationary crisis and geopolitical instability.
We invite you to read more about revenue management pre and post-pandemic, and we hope the findings and recommendations will inspire you to review your organisation’s approach, and how you may be able to recommend improvements based on the collective experiences of the industry leaders who participated in the study.
Revenue Management from Insights to Action – A Miniguide Series
In this series, we will examine the role of each key revenue management lever – assortment, pricing, and trade promotions – and how their well-orchestrated interplay is paramount for CPG’s to create winning revenue management strategies.
Read our miniguide series and learn how to fast-forward digital transformation and inspire successful revenue growth management strategies for your organisation, at speed and scale.