Often volume doesn't mean value growth
Can your brand afford those supermarket shelf prices?
Brands are built bottom up. So are shelf prices and promos.
Is the value fairly shared along the chain? I doubt it.
When the product is perishable, off-trade is seen as the silver bullet for that.
In Italy, every year 8 billion fliers are printed to advertise supermarket promotions.
Chains are supporting those prices only marginally.
Your brand is.
Actually, also consumers with their taxes to support EU subsidies to an agricolture sector that cannot survive without.
Those promos are agreed months before and competition is tough.
Auctions and agreements lead brands into vicious circles that pushes the margins to a bare minimum, often loss making.
An alleged insane volume growth can hide a loss per case or per hectolitre.
It means that the more you sell, the more you lose money and very often, you analyse your P&L too late.
Main take-outs:
- Brands are part of an ecosystem
- Brand building needs time
- Check your margins, regularly
- It is a holistic exercise
Think of sourcing, demand planning, production, mktg and sales as a whole before you set your sales objectives.
My father would say: est modus in rebus