Shift to Profitable Volume

CPG companies are prioritizing profitability over pure sales growth, focusing on optimizing product mix and leveraging Revenue Growth Management (RGM).

Themes

Values-Driven Consumption

Timeframe

near-term

Subcategories

Business Strategy Corporate Strategy Market Trends Operational Efficiency

Impact areas

Consumers CPG companies Retailers

Detailed Analysis

After years of relying on price increases to drive growth, CPG companies are recognizing the unsustainability of this strategy. The report highlights a shift towards "profitable volume," where the focus is on selling more units while maintaining profitability. This involves a careful optimization of the product mix, emphasizing high-margin and high-growth categories. This strategic shift is evident in the declining number of executives prioritizing price increases as a growth strategy.

Context Signals

95% of retail sales value growth in the US and Europe in the past year was driven by price increases. Deloitte study of consumer products executives Growing adoption of AI-driven data analytics for RGM

Edge

This shift could lead to more competitive pricing and greater value for consumers. Companies that effectively leverage RGM and data analytics will be better positioned for long-term success. This trend may also drive innovation in product development and packaging as companies seek to differentiate themselves on value rather than just price.

Click to access the source report

Tune in
to all the
TRENDS

Keywords

consumer behavior product mix optimization revenue growth management

Revenue growth management (RGM) is playing a critical role as companies try to balance their volumes with the right price, and strive for outcomes they can largely predict using AI-driven data analytics.

Categories for this trend