Leveraging trade to build your brands
Executives at consumer packaged goods companies (CPGs) in Canada are struggling with several inconvenient truths about their business:
- An environment where commodity costs are highly volatile
- The retail landscape continues to evolve
- Consumers are conditioned to purchase products at heavily discounted prices
This means one thing for manufacturers: margin compression at the expense of brand equity.
While the solution to this challenge seems clear, the path to get there is not. Initiatives such as brand building and innovation often take many years of investment in marketing programs and R&D before a CPG company sees any returns. The key disconnect for most CPG companies: how does the company balance short-term margin pressure with long-term prosperity?
Strategic trade redesign is the bridge to help a CPG company cross the divide between short-term, unsustainable activities (such as reliance on deep discounting, increased trade rates to support retailer demands and reactionary pricing to recover commodity increases) to long-term sustainable growth demonstrated by brand equity, game-changing innovation and value delivered through quality, as opposed to price.
Given the growth of trade spend over the last decade – with trade spend rates for many Canadian CPG companies averaging 20-25% of top-line sales, and rising – this has quickly become a hot topic in the CPG space. Deloitte’s Trade 2.0: Leveraging trade to build your brands report looks at the current trade spend situation and its impact on the industry.
This report closely examines:
- Significance of trade spend for CPG companies in today’s environment
- Internal and external factors that have shaped trade spend
- Impact of a strategic trade redesign on CPG companies
Strategize and plan ahead with Deloitte’s Trade 2.0: Leveraging trade to build your brands report.
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