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Reimagining the Growth Agenda in Packaged Foods

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Temporary commodity price deflation could distract packaged food and beverage companies from their long-term unit-volume challenges throughout their portfolio. They will revel in enhanced margins even with flat price points. Things will seem fine again. But when we look at per capita volume trends in packaged food, the story remains bleak.

The implications are troubling for those at the helm of food and beverage companies with large exposure to the U.S. retail food market:

  • Demand in the U.S. is tapping out for many legacy-branded food products, as these businesses can no longer count on population growth as a basic guarantor of topline growth
  • Innovation from many established legacy brands continues to produce short-lived topline hits, not sustained and/or large accretions
  • Innovation successes (i.e., large Y1 hits) are not necessarily making up for volume losses elsewhere
  • Brand portfolios are becoming segregated into decliners, flat liners and a small group of power brands, creating power struggles over marketing/innovation investments

Big Data analytics is the new savior: optimizing shelf space, optimizing pricing, optimizing trade promotions, optimizing, optimizing…

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