Revenue Growth During Inflation

SUMMARY

CPG REVENUE GROWTH IN AN INFLATIONARY ENVIRONMENT

CPG demand surged in 2020 as in-home consumption gained share due to the dramatic drop in consumers' out-of-home consumption. Demand outpaced supply in many categories and consumers were willing to pay for convenience, trusted brands and premium products.

As the economy rebounds, price inflation and increased logistics costs are pressuring manufacturers to raise prices even as increased mobility is likely to moderate demand for in-home consumption categories. To win the market share battle in this inflationary environment, companies need to quickly discover and capture pricing and promotion opportunities via prescriptive, intelligent and automated insights.

Observations:

• In-home consumption is expected to decline vs. last year but the rate of decline is uncertain and uneven across categories.
• Price sensitivity is rising again after dropping during the COVID-19 pandemic, and grocery shoppers will be more mindful of prices even as many other goods and services begin to compete for their wallet.
• Retailers and manufacturers will fight to improve market share and retain buyers they acquired during the pandemic surge.

Opportunities:

• To win, companies must quickly discover pricing and promotion opportunities and enable granular execution by providing prescriptive and intelligent recommendations to the right decision makers.
• Revenue growth leaders typically capture 3-5 points of topline growth and 5-10 points in ROI improvement from pricing and trade investments. They also have a strong understanding of which brands and categories are less price sensitive and take pricing action accordingly.
• New skillsets that leverage technology, real-time point-of-sale data, consumer and shopper data, advanced analytics, machine learning and artificial intelligence will drive revenue growth.
• This report highlights how companies can leverage advanced analytics, new technologies and integrated datasets to make more profitable decisions.

This report highlights how companies can leverage advanced analytics, new technologies and integrated datasets to make more profitable decisions.

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