Visualfabriq awarded 4 best-in-class category distinctions by POI

Visualfabriq, a global revenue management solutions provider for consumer-packaged goods (CPG) companies, has been recognized as a quadruple best-in-class category distinction recipient in the Enterprise Planning Vendor Panorama published on September 30, 2024, by the Promotion Optimization Institute (POI). 

“We are thrilled to see our deep CPG expertise, commitment to growth, and drive for innovation recognized by POI in this year’s Vendor Panorama,” said Koen Matthijs, CEO at Visualfabriq. “Our team is passionately working to realize our vision of revolutionizing revenue forecasting and optimization in the CPG industry. We equip manufacturers with integrated tools designed to drive revenue growth by unlocking data sources and gaining actionable insights enhanced by AI. This is why we are trusted by global CPG leaders and our partners and are currently ramping up our solutions delivery in North America and other geographies.” 

Visualfabriq’s software suite has been acknowledged by POI in the following best-in-class category distinctions. Below, Visualfabriq describes how their successes have shaped enterprise planning. 

• RGM for Tier 2 & 3 Organizations and/or Other Tier 1 International Geographies: Visualfabriq’s solution supports the key levers of revenue growth management (RGM) to customers ranging from global to local players. It provides tools to tools to leverage on promotion optimization, robust pricing and investment strategies to drive overall revenue optimization. The software is tailored for rapid implementation through its flexible configuration capabilities, ensuring each market can use the software to fit its unique characteristics. 
   

• Enterprise Planning IBP/S&OP Capabilities: Visualfabriq enables teams to collaboratively build plans from the bottom up, feeding into a central enterprise forecast with a full outlook on the P&L, from a volume and value perspective. Sales planning inputs flow into the demand planning, forecasting, and Integrated Business Planning (IBP) process. The software also supports the incorporation of building blocks and assumptions, facilitating the seamless flow of HQ inputs into the sales plan and vice versa. This includes visibility into risks and opportunities. 
   

•  TPx Analytics, Dashboarding & Reporting: Visualfabriq’s analytics, dashboarding, and reporting tools are designed to enable effective decision-making. The software helps users quickly gain insights into the most effective mechanisms and translate these into actionable initiatives, ensuring timely responses. It delivers an exceptional user experience with a cohesive interface that integrates ergonomic and graphical elements. The dashboards are structured for data comprehension at the required level of granularity, highlighting the most relevant KPIs and levers.  
   

• Global Deployment: Visualfabriq has selected world class partners to deploy its software. The solution offers configurability and flexibility, enabling clients to establish a common template of standardized processes across multiple markets. This includes promotion types, workflows, interfaces, and RGM KPIs, while also allowing for local configurations to address specific complexities. 

Furthermore, the independent analysis of POI highlights that Visualfabriq’s “platform’s trade management tools, including price management, promotion simulation, and volume forecasting, are enhanced by AI integration, allowing for both model-driven and manual inputs. This flexibility is crucial for customers to build trust in the system, especially those with limited historical data.”  

Additionally, POI notes underscore “Visualfabriq’s commitment to growth is evident through steady investment in people, products, and partnerships… With solid growth and continual UX enhancements based on client feedback, we expect Visualfabriq to continue to be a strong option for manufacturers.” This is evidenced by Visualfabriq’s recent expansions in the US and other geographies.  

To read more about Visualfabriq’s capabilities, download the Enterprise Planning excerpt for Visualfabriq. 

To access the full POI 2024 Enterprise Planning Vendor Panorama report, click below: 

https://poinstitute.com/membership

Membership includes complimentary passes to upcoming POI events including the POI Fall Hybrid Summit, November 13-15, 2024, having access to the quarterly POI Manufacturer Connect Share Group and much more.  For company/team membership, please contact Joanie Malin  ( [email protected] ).

Streamlining the trade promotion optimization process with AI

In the world of consumer-packaged goods (CPG), the trade promotion optimization process is a game-changer. This strategic approach involves planning, executing, and refining trade promotions using data-driven insights and advanced technologies. It’s crucial for maximizing return on investment (ROI) and efficiency in the CPG sector. 

Traditionally, the trade promotion optimization (TPO) process has been handled through disconnected steps, often involving manual data combination in tools like Excel. Businesses would look at previous promotions and draw conclusions either without additional analytics, which is prone to bias, or through simple statistical analysis. While this may provide some insight into performance, it doesn’t predict which mechanism will deliver the best results for specific goals. This traditional method is not only time-consuming but also lacks the precision and foresight needed in today’s competitive market. 

Common challenges in the traditional trade promotion optimization process 

Traditional TPO processes come with a lot of headaches. Businesses often face fragmented steps, delayed results, and the need for multiple tools, leading to inefficiencies and poor decisions. 

One major issue is the disjointed nature of the process. Planning and optimization are often handled separately, requiring businesses to manually combine data from various sources. This not only eats up a lot of time but also increases the risk of errors and inconsistencies. Additionally, relying on tools like Excel for data analysis can be cumbersome and prone to bias, as it often involves looking at past promotions and drawing conclusions without proper analytics. 

Another big problem is the delay in getting results. That’s because traditional methods often mean waiting for external inputs or running multiple, uncoordinated software tools, which can slow down decision-making. This delay can result in missed opportunities, as businesses may not be able to respond quickly enough to market changes or competitor actions. 

In short, these challenges highlight the need for a more integrated and efficient approach to trade promotion optimization, one that can streamline the process and provide more accurate and timely insights. 

The benefits of an integrated trade promotion optimization process 

Switching to a unified trade promotion optimization process, where planning and optimization happen together, offers a ton of benefits. This streamlined approach makes everything more efficient and effective. 

One major perk is the power of AI-driven insights. By integrating AI, businesses can get valuable insights quickly, helping them make smarter decisions. After all, AI can analyze huge amounts of data in no time, providing real-time feedback and predictions. As a result, businesses can explore different scenarios, fine-tune their strategies, and optimize their promotions with precision. 

Another big advantage is better teamwork. With a unified process, different departments can collaborate more smoothly, aligning their goals and strategies. This creates a more cohesive and goal-driven environment, where everyone is working towards the same objectives. 

Additionally, an integrated process cuts down on the need for multiple, stand-alone software tools. This simplifies the workflow and speeds up decision-making. Businesses can also respond faster to market changes and competitor actions, enabling them to stay ahead of the game. 

In short, an integrated trade promotion optimization process is a game-changer. It makes managing trade promotions more streamlined, efficient, and effective, helping businesses achieve their goals with ease. 

Transforming trade promotion optimization with AI 

AI is already changing the game for trade promotions. By using AI, businesses can predict outcomes, fine-tune strategies, and get instant feedback, making decision-making and resource allocation much smarter. 

One big perk of AI is its ability to quickly and accurately analyze a huge amount of data. This means businesses can uncover patterns and trends that traditional methods might miss. AI can also forecast which promotional strategies will work best, helping businesses make better decisions and use their resources more effectively. 

AI also makes scenario planning a breeze. Businesses can explore different scenarios and adjust their strategies on the fly, which is super important in the fast-moving CPG sector.

Plus, AI fosters teamwork by providing real-time insights and feedback. Teams can align their goals and strategies more effectively, leading to better results. This collaborative approach not only boosts efficiency but also helps businesses stay competitive. 

In short, AI is revolutionizing the trade promotion optimization process, making it more efficient, effective, and responsive to market changes. 

Watch our on-demand webinar: AI foundations for business: Leveraging AI for revenue forecasting and optimization 

Visualfabriq’s approach to the TPO process 

Visualfabriq’s award-winning software is at the forefront of revolutionizing the trade promotion optimization process. Our approach stands out by integrating planning and optimization into a single, seamless step. Unlike traditional methods where planning and optimization are separate, often disjointed tasks, our solution allows you to simultaneously plan promotions and receive optimizations powered by AI. 

This integrated approach simplifies the entire process. With Visualfabriq, you can instantly explore multiple scenarios, refine your strategy, and align with your team. 

One of the standout features of Visualfabriq is our AI-powered scenario analysis. This feature allows you to effectively predict outcomes, optimize promotional strategies, and receive immediate feedback. Our real-time optimization ensures that you can quickly adapt to market changes and stay ahead of the competition. 

In short, Visualfabriq’s integrated approach to trade promotion optimization simplifies the process, enhances collaboration, and uses AI to deliver precise and efficient results. By combining planning and optimization into a single step, we help businesses achieve their promotional goals with ease and precision. 

Conclusion: Advancing your trade promotion optimization process 

In today’s competitive market, having an integrated and AI-driven trade promotion optimization process is a game-changer. By adopting a unified approach, you can streamline your promotional efforts, enhance collaboration, and make smarter, data-driven decisions. Visualfabriq’s innovative solution simplifies the entire process, combining planning and optimization into a single, seamless step. This not only saves time and resources but also ensures you can quickly adapt to market changes and achieve your promotional goals with precision and ease. 

Ready to take your trade promotion optimization process to the next level? Download our Guide to trade promotion excellence in the CPG industry and book a demo today to see how Visualfabriq can help you transform your promotional strategies. 

Enhancing CPG analytics: the role of data harmonization

Data and analytics are a big deal in the consumer-packaged goods (CPG) industry. It tells us what’s selling, what’s not, and what we can do to keep our customers happy. But with so much different data coming from various places, it can be hard to stitch together and make sense of it all. That’s why data harmonization is essential for CPG analytics. Harmonizing data enhances the quality, precision, and usefulness of CPG data. It’s like a translator for data, making sure that all the data is cleansed, standardized, and ready for analysis. This process is key to providing a complete and unified view, keeping everyone informed and aligned. 

Why data integration and harmonization is vitally important for CPG analytics 

In this article, we’re going to talk about why data harmonization is essential for CPG analytics. We’ll not only look at what it is but also why it’s important. In addition, we’ll discuss how it can make a substantial difference in the way we make decisions and plan for the future. 

40% of CPG organizations state that proper data cleansing, harmonizing, and staging the data is holding them back from delivering trade promotion optimization and analytics — Promotion Optimization Institute (POI) 2025 State of the Industry report

So, if you’ve ever wondered how to make your data work harder for you, stay tuned. Because we’re about to dive into the world of CPG data harmonization and discover how it can help your business get ahead. 

What is retail cpg data harmonization?  

Data harmonization is a crucial step for enabling CPG analytics, making sure that data from various sources such as ex-factory, retail EPoS, and syndicated data can work together seamlessly. Imagine you have a puzzle, but the pieces come from different sets. They’re all different shapes and sizes, and they don’t fit together. Data harmonization is like finding the right pieces that fit perfectly, creating a clear picture. 

Here’s what happens during retail cpg data harmonization: 

1. Integration: Bringing together disparate data from various sources, both internal and external. This could be sell-in from one source, sell-out from another (retail direct data such as ePOS, or syndicated data from providers like Nielsen and IRI), and market trends from a third source. 

2. Cleansing: data scrubbing removes inaccuracies, duplicates, and irrelevant data to ensure quality. Just like you’d get rid of any puzzle pieces that don’t belong. 

3. Standardization: We then make sure that all this data speaks the same language. This means aligning formats, units of measurement, and naming conventions so that everything is consistent. 

4. Unified schema: After standardizing, we organize the data into a unified structure. This is like sorting the puzzle pieces into corners, edges, and middle pieces so you know where everything goes. 

5. ‘Analysis-ready’ dataset: Finally, we have a dataset that’s clean, organized, and ready for analysis. This is your completed puzzle, giving you a cohesive, full picture. 
   
   

What’s the link with data management? 

Now that we’ve established what data harmonization is, let’s see how it fits within the broader context of data integration and data management in CPG. 

As we’ve discussed, data harmonization is a critical component of data management. Because it ensures that the data from various sources is not only brought together but also made consistent and standardized for effective use. While data integration focuses on the initial collection and combination of data, data management encompasses the entire governance, organization, and utilization of data assets. Data harmonization bridges these two areas, enhancing the quality and usability of the data. 

To clarify: 

• Data integration: This is the first step in the data management process. At this stage, we’re collecting and combining data from diverse sources. Think of it as gathering all the ingredients you need to cook a meal. You’re bringing together vegetables, meats, spices, and so on from various places into one kitchen. 

• Data management: This is the overarching process that includes all aspects of handling data, much like managing the entire process of preparing, cooking, and serving the meal. It involves data integration, data quality, data governance, and data storage. It’s about having systems and policies in place to handle data efficiently and securely throughout its lifecycle. 

• Data harmonization: This is a subset of data management and a step further from data integration. Once the data is integrated, data harmonization ensures that the data is not just mixed together but is also standardized and consistent. It’s like making sure all the ingredients are prepped in a way that they cook evenly and taste harmonious in the final dish. 

By understanding these concepts, we can appreciate the intricate process that ensures data is not just collected but also crafted into a valuable asset for business intelligence and decision-making. 

What data sources need to be harmonized? 

In the CPG industry, data harmonization involves integrating and standardizing a variety of data sources to create a comprehensive view of the business landscape. Here are some examples of common data sources: 

• Market performance data: This includes sales figures, market share statistics, and competitive analysis reports. It provides insights into how products are performing in the market and how they stack up against competitors. This data is typically used for mathematical and statistical analysis. 

• Store-level information: This involves data from retail locations, such as sales by SKU. It’s vital for optimizing product distribution and in-store marketing efforts. Like market performance data, store-level information is typically used for mathematical and statistical analysis, often combined with ex-factory data. 

• Consumer research data: This encompasses customer surveys, feedback forms, and product reviews. It helps in understanding consumer preferences, behaviors, and trends. This data usually serves to predict long-term trends. 

• Trade and revenue trends: This data covers information on trade promotions, pricing strategies, and revenue outcomes. It’s crucial for evaluating sales strategies and trade promotion effectiveness. Like consumer research data, it is often used to predict long-term trends. 

By combining and harmonizing data from various sources, CPG companies can gain a holistic view of their operations, consumer sentiments, and market dynamics. This enables them to make data-driven decisions that enhance performance and profitability. 

Data harmonization: critical for CPG data analytics 

The importance of data harmonization in the CPG industry can hardly be overstated. It ensures that data across the organization is consistent and accurate, which is crucial for maintaining a single source of truth for all data users. This uniformity is key to improving decision-making processes and refining business strategies. 

Moreover, data harmonization plays a significant role in enhancing operational efficiency. It eliminates data silos and reduces redundancy. Consequently, CPGs can allocate resources more effectively, and teams can work more cohesively. By providing democratic access to a single window of shared knowledge, everyone can work from the same page. As a result, CPG companies can streamline their operations, leading to better outcomes and a stronger competitive edge in the market. 

In summary, data harmonization is a foundational element that supports the integrity and reliability of data-driven insights. It fosters informed strategic planning and robust business growth. 

Challenges in harmonizing data 

Achieving data harmonization in the CPG industry presents several challenges that organizations must navigate: 

• Handling disparate data sources and formats: CPG companies often deal with a wide array of data sources, each with its own format. Harmonizing this data requires robust systems that can process and translate different data types into a unified format. 

• Aligning different naming conventions and schemas: Each data source may use its own naming conventions and schemas. Aligning these to ensure consistency across the board is a meticulous task that requires attention to detail and a deep understanding of the data. 

• Overcoming data silos within the organization: Data silos occur when different departments or groups within a company store their data separately. Breaking down these silos is essential for data harmonization, as it allows for the free flow and consolidation of information. 

• Ensuring data quality and consistency: The quality of data is paramount. Therefore, organizations must implement stringent quality control measures to ensure that the data being harmonized is accurate, complete, and consistent. 

These challenges underscore the need for a strategic approach to data harmonization. One that involves the right technology, processes, and governance to ensure success. 

Benefits of harmonized data 

Harmonized data brings a multitude of benefits to CPG data analytics, significantly enhancing the capabilities and outcomes of analytical efforts: 

• Enhanced analytics capabilities. With consistent and comprehensive data, analytics tools can perform more effectively, leading to deeper insights and more accurate predictions. 

• Improved market insights and consumer understanding. A harmonized dataset allows for a better understanding of market trends and consumer behaviors. Consequently, it enables CPG companies to tailor their products and marketing strategies more effectively. 

• Optimized trade and revenue strategies. By analyzing harmonized data, companies can fine-tune their trade promotions and revenue management strategies to maximize profitability. 

• Better store-level performance tracking and management. Harmonized data provides a clearer picture of store-level performance. Therefore, it aids in inventory management, staffing decisions, and in-store marketing initiatives. 

Overall, the benefits of harmonized data for CPG analytics are clear: it leads to smarter business decisions, more efficient operations, and ultimately, a stronger position in the marketplace. 

Check out our on-demand webinar: Understanding and perfecting data to enable RGM 

The role of technology in retail CPG data harmonization

Technology plays a pivotal role in data harmonization within the CPG industry. It serves as the backbone that facilitates the integration, transformation, and standardization of diverse data sources. Without the right tools, harmonizing data can be an exhaustive, time-consuming process. But by leveraging advanced software solutions, CPG organizations can streamline the complex process of data harmonization.  

By utilizing these technological capabilities, companies can overcome the challenges of disparate data sources and formats, align different naming conventions and schemas, and break down data silos. This not only improves the quality and consistency of CPG data but also enhances the overall analytics capabilities. 

Visualfabriq makes CPG analytics easy 

Visualfabriq brings a transformative approach to CPG analytics by offering a suite of tools that streamline the data harmonization process. Its cloud software integrates seamlessly with your existing data systems, ensuring that all information is consistent, accurate, and easily accessible. This not only saves time but also provides a solid foundation for advanced analytics and strategic decision-making. 

Visualfabriq’s Bifrost data management tool stands at the heart of its analytics solutions, offering unparalleled capabilities in harmonizing and staging the data. This powerful tool ensures that disparate data sources are unified, providing a single source of truth that is both reliable and actionable. Bifrost is built to handle the complexities of data management, automatically updating with new datasets to ensure your analytics are always up-to-date. With this tool, Visualfabriq offers a proactive approach to data harmonization. It enables brands to focus on strategic initiatives rather than the intricacies of data processing. 

To truly understand the impact Visualfabriq can have on your CPG data analytics, we invite you to experience a software demo. This hands-on demonstration will allow you to see the platform in action, explore its features, and ask any questions you may have. It’s an opportunity to witness firsthand how Visualfabriq can elevate your data analytics and help you achieve your business objectives. 

Boosting sales in the CPG Food and Beverage sector

In the hyper-competitive environment of the food and beverage (F&B) consumer-packaged goods (CPG) industry, a robust sales strategy is not just beneficial, it’s a necessity. Companies must navigate the intricate dance of driving volume for planned purchases, managing impulse buys, and responding to economic fluctuations, all while maximizing the impact of promotions and handling unforeseen events. 

In this blog post, we will delve into the unique characteristics of the CPG food and beverage category. Additionally, we’ll explore how Visualfabriq can optimize sales strategies to not only meet but exceed the demands of this sector. In a market where consumer habits are deeply ingrained, the challenge lies in not just catching the eye for impulse buys, but also in strategically driving revenue growth. Visualfabriq provides a toolkit that aids food and beverage CPG companies in navigating these complexities. It offers insights that help align volumes with consumer demand patterns, both predictable and spontaneous. 

Planned and impulse purchases in food and beverage CPG

The food and beverage sector stands as a top segment within the CPG industry, known for its dynamic market and consumer-driven trends. 

In this bustling sector, understanding the difference between planned and impulse purchases is key. Planned purchases are those made with forethought, often part of a routine shopping list. They’re the essentials you need to stock up on—those non-negotiables that keep your household running smoothly. Pasta and rice, for example, fats and oils, canned goods, and dairy products or their vegan replacements. These purchases are influenced by consumer preferences and established habits. 

On the other hand, impulse purchases are spontaneous, made at the moment and often triggered by eye-catching displays or innovative products. They’re the surprise finds, like picking up a chocolate bar at the checkout, trying a new flavored beverage, grabbing a bag of chips due to a promotional display, or adding a new gourmet snack item to the cart on a whim.  

Managing impulse buying: critical for F&B companies

Managing impulse purchases in the CPG food and beverage industry comes with its own set of challenges. One major issue is stockouts due to misjudged volumes. Impulse purchases are, by nature, unpredictable. A sudden surge in demand for a new beverage or a popular snack can lead to stockouts if the volume isn’t accurately predicted. This not only results in lost sales but can also disappoint customers, potentially driving them to competitors. 

Another critical aspect is the role of promotions and display placements. Effective promotions can significantly boost impulse purchases, but they need to be strategically planned. Eye-catching displays at checkout counters or end-of-aisle placements can attract attention and encourage spontaneous buying. However, these promotions must be carefully timed and targeted to maximize their impact. Misplaced or poorly timed promotions can fail to capture consumer interest, leading to missed opportunities. Additionally, as promotional pressure mounts, the effectiveness of these promotions tends to wear out. Therefore, it is essential to continuously evaluate and adjust strategies to maintain their impact on revenue growth and profitability. 

For F&B companies, it’s about finding the right mix between understanding what customers usually buy and what they might buy on a whim. Balancing these elements requires a keen understanding of consumer behavior and market trends.  

Navigating CPG food and beverage challenges 

Navigating the sales challenges in the food and beverage CPG industry requires a strategic approach to address various pain points: 

Driving volume for planned purchases:

One of the primary challenges is the difficulty in increasing volume for planned purchases due to fixed consumption patterns. Consumers typically have a set routine and won’t consume more than they need, such as eating more dinners in a day. The focus, therefore, must be on encouraging consumers to choose your product over competitors. This involves building strong brand preference through consistent quality, effective marketing, and strategic shelf placement. However, changing consumer behavior is a tough task and requires persistent efforts. 

Managing impulse purchases:

Impulse purchases are spontaneous and often driven by promotions and strategic product placements. The challenge here lies in accurately predicting the volume needed to meet demand. Misjudging volumes can lead to stockouts, resulting in lost sales and disappointed customers. Effective promotions and eye-catching displays can significantly boost impulse purchases, but they need to be carefully planned and executed to capture consumer interest at the right moment. 

Susceptibility to economic fluctuations: 

The F&B industry is highly sensitive to economic fluctuations. During economic crises, consumer behavior shifts, with many opting for value-for-money products. Others may sometimes choose premium items and cut costs elsewhere. Understanding these shifts and adapting product offerings accordingly is crucial for maintaining sales volume and customer loyalty. 

Impact of promotions on related products:

Promotional activities not only drive sales of the promoted product but can also boost sales of complementary products. For example, a promotion on a flavorful sauce or dressing can increase sales of vegetables that pair well with it. However, it’s important to note that promotions can also have a negative impact on related products, known as cannibalization. This occurs when the promoted product’s sales increase at the expense of other products in the same category. Mitigating this effect requires careful planning and analysis to ensure that promotions benefit the overall product portfolio.  

Handling the impact of events out of your control:

External factors such as weather and unforeseen events can significantly impact sales. For instance, a good summer can boost ice cream sales, but you can’t “order” good weather. Similarly, unforeseen events can disrupt supply chains and consumer behavior. Preparing for these uncertainties and having a flexible strategy in place can help mitigate their impact. 

Leveraging Visualfabriq to address CPG food and beverage challenges 

Visualfabriq offers a suite of tools designed to tackle the unique challenges faced by food and beverage CPG companies. When it comes to driving volume for planned purchases, Visualfabriq provides clear data on profitability by retailer. This transparency aids in better negotiations, ensuring your product gets favorable placement and support. This is crucial for encouraging consumers to choose your product over competitors. 

For managing impulse purchases, Visualfabriq offers reliable predictions of promotional volume based on the promotion mechanism and execution. This helps in accurately forecasting demand and avoiding stockouts, ensuring continuous availability of impulse items and capturing those spontaneous buys. 

In terms of susceptibility to economic fluctuations, Visualfabriq helps adjust baseline predictions and develop the right promotional strategy to stay competitive. By optimizing promotions, companies can gain an advantage over competitors, especially in the premium segment, and counteract competition from private labels. 

When it comes to the impact of promotions on related products, Visualfabriq can help plan strategic promotions. These not only drive sales of the promoted product but also boost sales of complementary products. This helps in maximizing overall category growth while mitigating the negative impact of cannibalization. The strategic importance of effective promotions cannot be overstated. They can effectively create a ripple effect, enhancing overall sales and customer satisfaction. 

Visualfabriq leverages data and AI-powered predictive analytics. This empowers companies to accurately anticipate demand, optimize their promotional strategies, and navigate the complexities of the food and beverage CPG market effectively. 

It’s time to level up 

The food and beverage CPG industry faces unique challenges that require a strategic approach to navigate effectively. Visualfabriq’s software suite offers the tools and insights needed to tackle these challenges head-on. It provides clear data on profitability, reliable predictions for promotional volumes, and strategic planning for promotions to boost overall category growth. 

By using Visualfabriq’s advanced analytics and predictive capabilities, F&B CPG companies can optimize their sales strategies, ensuring they stay competitive and responsive to market dynamics. 

Ready to take your sales strategy to the next level? Download Visualfabriq’s Trade Promotion Management brochure and book a software demo today to see how our solutions can help you navigate the complexities of the F&B CPG market and drive growth for your business. 

Enhancing your CPG business plan with revenue forecasting and optimization

In the fast-moving world of consumer-packaged goods (CPG), having a solid business plan is crucial for success. A well-structured CPG business plan not only aligns strategic goals with operational actions but also ensures efficient resource allocation and predictable growth. A further step in CPG business planning is to enable enhanced revenue forecasting and optimization by integrating Revenue Growth Management (RGM) and Integrated Business Planning (IBP). 

By combining and integrating the planning cycles of RGM and IBP, CPG companies can create a more comprehensive and dynamic business plan. RGM focuses on identifying and leveraging growth opportunities, while IBP ensures that all aspects of the business are aligned and working towards common goals. Together, they provide a powerful framework for driving revenue growth and achieving long-term success. 

The importance of a robust CPG business plan

For CPG companies, a comprehensive business plan is more than just a document—it’s a strategic tool. A robust plan aligns the company’s vision with actionable steps. It also ensures that every department works towards common goals. This alignment is crucial for efficient resource allocation, enabling companies to maximize their assets and achieve sustainable growth. 

Without a structured plan, CPG companies face significant challenges. Operations can become misaligned, leading to inefficiencies and wasted resources. A lack of coordination can also result in missed growth opportunities and an inability to respond effectively to market changes. Moreover, without a clear roadmap, companies may struggle to maintain focus and direction, making it difficult to achieve longer-term objectives. 

In essence, a well-crafted CPG business plan is vital for navigating the complexities of the market. It provides a clear framework for aligning strategic goals with tactical operations. This ensures that resources are used effectively, and growth opportunities are seized. 

How RGM and IBP complement each other 

Revenue Growth Management (RGM) and Integrated Business Planning (IBP) are two powerful methodologies in their own right. When combined, they create a synergy that enhances revenue forecasting and optimization for CPG companies. By focusing on RGM, companies can set the right strategies for the future and make them actionable. This involves identifying profitable growth opportunities, optimizing pricing and portfolio, and managing promotions effectively. 

On the other hand, IBP ensures that all aspects of the business align with the execution of the strategic vision. This includes synchronizing promotions, pricing, and operations to ensure that they work together seamlessly. The integration of RGM and IBP thus provides a comprehensive approach to business planning, where CPGs can combine strategic insights with operational precision. 

The balanced focus on RGM and IBP ensures that every aspect of business planning is interconnected and mutually reinforcing. This holistic approach provides a competitive edge in the CPG industry. By leveraging the strengths of both methodologies, companies can achieve a full P&L view. They can also gain clear visibility into commercial drivers, ultimately driving long-term revenue growth. 

The role of technology in managing your CPG business plan  

In today’s digital age, technology plays a pivotal role in managing and optimizing a CPG business plan. Software solutions that support RGM and IBP are essential for driving efficiency and achieving strategic goals. These tools enable companies to forecast revenue accurately, optimize pricing and promotions, and ensure that all aspects of the business contribute to the long-term vision. 

When selecting software solutions for RGM and IBP, there are several key features to look for. Scalability is crucial, as it ensures that the software can grow with your business and handle increasing amounts of data and complexity. Connectivity is another important feature, as it allows for seamless integration with other systems and data sources, providing a holistic view of the business. Flexibility is also essential, as it enables the software to adapt to changing market conditions and business needs. 

Moreover, it’s important to choose tools developed by industry insiders. People who understand the unique challenges and opportunities within the CPG sector. These experts can design software that addresses specific pain points. Obviously, it also leverages industry best practices, ensuring that your business plan is both effective and efficient. 

Another critical aspect is the integration of embedded AI. AI-powered tools can analyze vast amounts of data to generate various scenarios. Thereby allowing companies to compare different strategies and make smarter decisions. This capability enhances the precision of revenue forecasting and helps businesses identify the most effective paths to growth. 

In summary, leveraging technology to support RGM and IBP is crucial for managing a successful CPG business plan. By selecting the right software solutions, companies can enhance their revenue forecasting and optimization, ultimately driving long-term growth and competitiveness. 

Visualfabriq: Empowering CPG Companies 

Visualfabriq stands out as a key player in empowering CPG companies with enhanced revenue forecasting and optimization. By leveraging AI-powered technology and industry expertise, Visualfabriq provides a comprehensive software suite designed to enhance revenue forecasting and optimize business planning. 

Visualfabriq’s software supports long-term revenue growth by offering a full Profit and Loss (P&L) view and clear visibility into commercial drivers. The software’s AI-powered capabilities enable scenario building and analysis, allowing companies to explore various strategies and make data-driven decisions. 

Moreover, Visualfabriq’s focus on RGM and IBP ensures that promotions, pricing, and operations are in sync with the strategic vision of the company. This alignment not only drives efficiency but also maximizes growth opportunities. By providing tools developed by industry insiders, Visualfabriq addresses specific pain points and leverages best practices to deliver effective and efficient solutions. 

In summary, Visualfabriq empowers CPG companies by integrating RGM and IBP, supporting long-term profitable revenue growth, based on a one-number principle and a reliable commercial outlook. 

Takeaways

Leveraging Revenue Growth Management (RGM) and Integrated Business Planning (IBP) in your CPG business plan is the way to go. This approach ensures that promotions, pricing, and operations are in sync with the strategic vision. Equally important, it leads to more accurate revenue forecasting and optimized business planning. 

Ready to see how integrating RGM and IBP can transform your CPG business plan? Request a demo. Or download our Revenue Forecasting & Optimization (RFO) brochure to learn more about how our solutions can help you achieve your strategic goals. 

How to use Trade Funds for sustainable success in CPG

Trade funds are important in the CPG industry, acting as designated budgets for trade spending. These trade expenditures are essential for enhancing brand visibility and maintaining retailer relationships. However, with increasing margin pressures and growing competition from private label products, managing trade funds cost-effectively is key to ensure CPG profitability. This aspect is particularly crucial given that, in most cases, trade spend is the second-largest expense on a CPG’s profit and loss statement, right after COGS.  

In Integrated Business Planning (IBP), the challenge lies in finding the right balance in trade spending. Companies must support retailer partnerships and grow revenue, while also focusing on profit margins for long-term growth. Various budgeting methods play a role in this process.  

In top-down budgeting, top management sets the overall amount the company can spend on trade investment. It typically starts with last year’s expenditures, providing a simple and quick approach. However, because it looks primarily to the past as a guide, it may not fully align with current objectives.  

Bottom-up budgeting, on the other hand, begins with a clean slate each year. These methods, such as objective-task budgeting, the product lifecycle method, or zero-based budgeting (ZBB) focus on specific brand objectives and allocate funds to meet those goals. Bottom-up budgeting can be more aligned with future goals, but it requires a detailed understanding of the objectives, and the costs involved. 

In this blog post, we will discuss effective strategies for leveraging trade funds in integrated business planning. We’ll focus on optimizing budget allocation and enhancing promotional effectiveness for sustainable growth in the CPG industry. 
 

Understanding CPG trade funds  

In the consumer-packaged goods industry, trade funds are specialized budgets set aside to oversee trade spending. This includes both promotional activities and long-term contractual expenditures. Trade funds in CPG can be fixed-amount lump sum funds, but they can also be dynamic funds. In the latter case they are directly impacted by sales or volume figures.  

These funds are pivotal for managing the fine balance between driving profits and catering to the growing bargaining power of retailers, who often demand more significant investments.  

Both budget allocation and timing are critical aspects of managing trade funds. Companies must not only decide on the amount to spend across channels and brands. They must also determine the optimal timing for these expenditures.  

For some, this means evenly distributing the budget throughout the year, ensuring a consistent presence in the market. Others may choose to focus their spending during specific periods to align with peak shopping seasons or product launches. 

This strategic allocation is essential in navigating the push-and-pull dynamics of profit maximization and retailer demands. By understanding and effectively managing trade funds, companies can better position themselves in the competitive CPG landscape. This will ensure both short-term success and long-term sustainability. 

Challenges with trade funds in CPG 
 

Budget constraints often lead to a routine approach to trade spend rather than a strategic one. Key Account Managers may fall into the habit of replicating the same spending patterns year after year, treating it as an entitlement for the retailer, without considering the actual performance or return on investment.  

This approach can result in a strategic misalignment, where trade spending becomes more about maintaining the status quo rather than aligning with the company’s evolving goals and market dynamics. 

For example, negotiations with retailers might lead to increased trade spending that does not translate into corresponding benefits. This often means that despite the additional investment, there is no improvement in shelf placement or promotional impact. Such an outcome highlights the disconnect between spending and actual returns. 

This scenario not only highlights the strategic misalignment but also reflects a broader issue within many CPG companies—a reluctance to deviate from established “entitlement” retailer programs due to fear of lost sales, comfort with the status quo, and avoidance of difficult conversations with buyers. 

Moreover, the lack of reliable KPIs to track the return on investment for trade spending further complicates the issue. Without accurate metrics, decision-making becomes challenging. Trust in the effectiveness of investments goes down and people are hesitant to explore new investment avenues.  

This aversion to risk can stifle innovation. And it may also prevent companies from adapting to changing market conditions and achieving their latest funding goals. 

To address these challenges, companies need to shift from routine to strategic thinking. They must start focusing on aligning budgeting practices with clear, measurable objectives and outcomes. By integrating strategic planning with reliable data analysis, companies can ensure that their trade spending is not only justified but also contributes meaningfully to their overall success and operational performance. 
 

Strategic trade fund optimization 
 

In the pursuit of optimizing trade funds, it’s imperative to adopt best practices that ensure strategic allocation and integration into the broader scope of Integrated Business Planning (IBP). This approach necessitates a seamless fusion of trade fund management with the IBP processes, thereby aligning budget allocation with the overarching business objectives. 

Effective utilization strategies are central to this integration, focusing on long-term profitability rather than short-term gains. For instance, a strategic allocation might involve channeling funds towards market segments where the brand has a competitive edge or investing in promotional activities that have proven to yield high returns. 

Incorporating these insights into the IBP process can lead to more informed decision-making. By considering the long-term profitability and market trends, companies can avoid the pitfalls of ineffective trade fund use. Leveraging examples from the industry, it’s clear that coordinated strategic planning and a focus on profitability can mitigate the risks associated with ad-hoc or misaligned trade fund expenditure. 

Through this strategic lens, companies can transform their trade fund allocation from a routine budgeting exercise into a dynamic tool for business growth and market leadership. 
 

Maximizing trade fund impact through profitability insights 

In the competitive CPG landscape, it’s crucial to align trade fund planning with insights into product profitability. This strategy aims to understand profit margins to make better trade fund investments. It also ensures that budgets include profitable products. 

For example, it’s strategic to invest more in best-performing products—those that have shown strong responses to promotions or have higher profit margins. This method focuses on maximizing the impact of promotions where it’s most effective. By prioritizing these successful products, companies can leverage their market appeal. It also ensures that the promotional budget is used efficiently, leading to a better Return on Investment (ROI). 

This focused investment approach is key to increasing sales and profits. It allows companies to avoid scenarios where they would neglect profitable products due to budget constraints. Instead, by integrating profit insights into trade fund planning, companies can make informed decisions that bolster their operational performance in the CPG market. 
 

Key takeaways 
 

For CPG manufacturers, strategic trade fund management is crucial, especially in the face of spending constraints. It allows companies to allocate their limited resources in a way that maximizes return on investment and drives business growth.  

By strategically managing trade funds, CPG companies can ensure that every dollar spent is aligned with business objectives and market opportunities. This will lead to more effective promotions, stronger retailer relationships, and ultimately, increased sales and market share. Despite budget limitations, a well-planned trade fund strategy can create competitive advantages and foster long-term profitability. 

Enhancing CPG trade funds management with Visualfabriq 

Visualfabriq stands out as a transformative software solution designed to streamline trade funds management and optimize trade spending in CPG. It offers a suite of tools that empower companies to make data-driven decisions, ensuring that trade funds are allocated efficiently and effectively. 

The software’s advanced data integration capabilities, paired with AI and automation, provide a comprehensive outlook on profit and loss from both volume and value perspectives. This enables commercial teams to optimize their investments and reduce reliance on manual analysis. 

It also allows for the planning of different types of funds at various hierarchical levels on both product and account dimensions. Moreover, it ensures that funds are treated as finite resources, much like money in a bank account. With Visualfabriq, companies can enjoy effortless upgrades, fast deployments, and unlimited data scaling. That makes it a top choice for those seeking to improve their trade fund management and promotional strategies. 

Using Visualfabriq’s award-winning software to manage funds brings several advantages. It provides clear instructions on how to distribute costs. It helps in strategically using funds to get the best results and avoid losses. And it offers both a broad overview and detailed tracking of funds. This ensures that everyone involved has the necessary information. 

Visualfabriq’s capabilities to plan, select, and track funds within the relevant commercial activity (activation, promotion, contracts) make it an invaluable asset for companies looking to leverage their trade funds for growth and sustainability.

Strategizing CPG distribution channels: Adapting to the new retail reality

In the consumer-packaged goods (CPG) industry, getting your products from the factory into the consumer’s hands is crucial. To ensure that products reach the point of sale effectively—be it a physical storefront or an online marketplace—CPG companies can follow two primary channel strategies: partnering with a distributor or selling directly to sales accounts (mostly retailers), known as indirect and direct distribution channels, respectively. 

But when is it advantageous to engage directly with retailers? What circumstances call for the support of a distributor? And what are the key distinctions between direct and indirect sales from the standpoint of a CPG company? 

In optimizing route-to-market strategies, the rise of centralized purchasing organizations within retail groups is also a trend to reckon with. These entities, which manage procurement for multiple store brands, can represent either direct or indirect sales channels. There can be great variance in their impact depending on their involvement in negotiations and volume management. 

In this blog post, we’ll explore the nuances of CPG distribution channels. We’ll examine the benefits and drawbacks of each method. And we’ll discuss the importance of data and technology in optimizing your route-to-market strategy. 

So, let’s dive right in… 
 

Understanding product distribution channels in CPG 
 

Understanding product distribution is pivotal in the CPG industry, as it ensures that your products are accessible to consumers through various distribution channels. These can be relatively simple to increasingly complex. CPG distribution encompasses not just the logistics of transportation, packaging, and delivery, but also the strategic placement of products. A robust distribution strategy is about precision: delivering the right SKU, at the right price, to the right place, and at the right time. This precision helps avoid overstocking and out-of-stock events, ensuring optimal shelf performance. Moreover, distribution is intrinsically linked to trade spend and promotion activities. When synchronized effectively, they can significantly enhance product visibility and sales performance.  

CPG companies often adopt an intensive distribution strategy. Such an approach aims to saturate the market by placing products in as many outlets as possible. It maximizes reach and, consequently, sales volume. A classic example is Coca-Cola’s intensive distribution, which places their products in a diverse array of venues, from supermarkets and burger restaurants to vending machines and online quick commerce platforms, ensuring convenience and strong brand visibility. 
 

Crafting a future-proof distribution strategy 
 

The significance of a solid distribution strategy cannot be overstated. It is a cornerstone of CPG success, directly influencing shopping behavior, brand recognition, and sales. The retail landscape is undergoing a significant transformation, driven by the convergence of physical and digital shopping experiences. The global omnichannel retail solutions market is a testament to this evolution, with projections indicating a compound annual growth rate (CAGR) of 13.6% to reach $17.92 billion in revenue by 2030 (source: Grand View Research). 

In this rapidly changing environment, CPG companies must remain vigilant and adapt their distribution strategies to preserve a competitive edge. Currently, the vast majority of CPG products are sold through traditional retail stores. However, there’s a growing shift towards direct-to-consumer (D2C) and online marketplace channels. Although D2C is on the rise, it only still represents a small part of the total CPG sales volume, primarily aiding the growth of early-stage and emerging brands. These brands are increasingly recognizing the importance of integrating physical retail into their distribution strategies to further scale their operations. 

Looking ahead, the Economist Intelligence Unit (Consumer goods and retail outlook 2024 report) forecasts a 6.7% growth in global retail sales for 2024. Offline retail in particular is poised to experience its most robust growth since the post-pandemic rebound of 2021. While there are considerable differences between countries and markets, brick-and-mortar stores are expected to account for over 85% of total sales globally. This trend underscores the enduring significance of physical retail in the CPG sector. 

Read more about trends in the CPG industry: CPG trends insight: Top 5 game changers for revenue growth management in 2025
 

Direct sales in CPG 
 

Direct sales in the consumer-packaged goods (CPG) sector usually refers to the process of selling products straight to retailers. For CPG companies, the primary focus is on two key stakeholders: the end consumers and the retail partners. Securing retail alliances is as pivotal as consumer engagement, considering the substantial volume of sales they represent.  
 

Pros and cons of direct sales 

Pros: 

• Direct relationships: Setting up direct relationships with retailers opens many opportunities for collaboration. These include power partnerships, targeted segmentation, mutually beneficial trade promotions, and the sharing of data and insights. 

• Visibility and data collection: Direct sales enable a clear correlation between ex-factory shipment data and retailer sell-in, ensuring that the data reflects actual sales to retailers. This transparency allows for precise tracking of volume flows and consumer data. In contrast, when working with a distributor who supplies multiple retailers, this level of visibility may not be available, and there’s often no transparent relationship between sell-in and sell-out. 

• Clear ROI and profitability: Direct distribution channels often have higher margins due to the absence of intermediaries. However, this is not a hard and fast rule. The profitability of direct versus indirect sales can vary based on the price/pack strategy. For instance, selling a multipack directly to supermarkets might yield a certain profit margin, but selling single consumption packages through an intermediary to convenience stores could potentially offer a higher profit per item for the manufacturer. The key is to focus on clear ROI, investing in partners that can provide immediate uplift through promotions or payback through true collaboration. 
   

Cons: 

• Higher costs: Direct sales can incur higher costs, especially for developing, training, and managing a sales team. There may also be higher costs for products requiring specialized shipping, such as chilled or frozen items, or for deliveries to small-scale outlets with low volume. 

• Scaling: Entry in new markets may be slower as you will need to negotiate with multiple banners individually. 
   

As the CPG industry continues to evolve, understanding and perfecting direct distribution channels will be increasingly important for companies looking to thrive in a competitive market.  
 

Indirect sales channels: the intermediary approach in CPG 
 

Indirect distribution channels in the CPG industry involve using intermediaries or distributors. These intermediaries facilitate the movement of goods to retailers and ultimately, to consumers. This method contrasts with direct sales, where companies sell their products without third-party involvement. 

Intermediaries and distributors play a crucial role in the CPG distribution chain. They can act as the link between CPG companies and the market, handling the logistics and complexities of getting products onto store shelves and into the hands of consumers. Their expertise in distribution logistics, market knowledge, and established relationships with retailers are invaluable to CPG brands. This is especially true for CPGs lacking the scale or infrastructure to manage widespread distribution independently. 

Indirect sales to retailers can happen in a few different configurations. A distributor may supply products to just one retailer (One-to-One). A single distributor may serve multiple retailers (One-to-Many). A retailer may also procure goods from several distributors (Many-to-One). The most intricate scenario is when multiple distributors interact with multiple retailers (Many-to-Many), which often complicates tracking sales volumes and prices.  
 

Pros and cons of indirect sales 

Pros: 

• Economies of scale: By consolidating logistics and distribution, intermediaries can reduce costs, particularly for specialized transport, long distances, or servicing smaller retail banners. 

• Access to expertise: Distributors offer specialized services and expertise that can be critical for navigating complex market dynamics. 

• Wider reach: Intermediaries enable CPG companies to expand their market reach, often beyond what they could achieve on their own. They can also be part of a strategy for rapid market entry, especially in new geographies. 
   

Cons: 

• Reduced control: Once products are sold to distributors, CPG companies have less influence over how their products are managed and presented in retail environments. 

• Additional costs: Distributors typically operate on margins that are a percentage of the wholesale price. This adds an additional layer of cost to the distribution process. 

• Limited interaction: Indirect sales can lead to fewer opportunities for direct engagement with retailers. However, this isn’t always the case. For instance, while logistics might be managed by a third party, the commercial team of a CPG company may still interact directly with the sales account.  This increases complexity, as the lack of transparency makes it more difficult to agree on dynamic fees (e.g., a growth bonus of 1% of invoice value). 

• Decreased data transparency: There is less visibility into the volume flows of products, which can complicate market analysis. 
   

In summary, while indirect sales can offer benefits like cost savings and broader reach, they also come with trade-offs such as reduced control and transparency. CPG companies must weigh these factors carefully when designing their distribution strategies. Additionally, they must ensure that they align with their business goals and market conditions. 
 

CPG distribution and channel strategy
 

In the multi-faceted world of CPG distribution, the right software supplier—one that truly grasps the nuances of the market—is invaluable. Visualfabriq stands out in this regard, crafted by industry insiders to deliver deep market-specific insights. 

Data is the cornerstone of informed decision-making in distribution. It provides CPG companies the clarity and evidence needed to make strategic choices, from selecting the most effective distribution channels to adapting swiftly to market shifts. Brands can leverage data in many ways to enhance their distribution strategies. For instance, demand forecasting becomes more accurate with data analytics, enabling brands to anticipate and adjust their volumes accordingly. Identifying the most effective channels also becomes data-driven, allowing brands to focus their efforts on where they yield the highest returns. Moreover, staying ahead of market trends is crucial. Data provides the foresight needed to pivot strategies in real-time, ensuring brands remain relevant and competitive. 

Visualfabriq’s AI-powered revenue management software emerges as a powerful ally for CPG companies. Its capabilities extend beyond mere data analysis; it facilitates the application of insights into actionable distribution strategies. With Visualfabriq, companies can fully comprehend their market standing through a detailed analysis of data from ex-factory to sell-out. This comprehensive view remains insightful even when certain data sources, like sell-through, are unavailable. The software’s predictive capabilities are impressive. They allow companies to not only grasp their current position but also to forecast and influence their future market path, keeping them ahead in the competitive CPG industry. 
 

Strategizing distribution channels in CPG: 3 takeaways 
 

What to take away from this post? 
 

1. Adaptability is key: The CPG sector must evolve its distribution strategies. This is vital to stay competitive in a retail landscape that is merging digital and physical shopping experiences. 

2. The role of intermediaries: Indirect distribution channels through intermediaries can expand market reach and reduce costs. But they may also bring challenges for CPG companies such as less control and reduced customer interaction. 

3. Data-driven decisions: Leveraging data and technology, like Visualfabriq software, is crucial for making informed distribution decisions and adapting to market trends. 
   

To see Visualfabriq in action and learn how it revolutionizes the world of CPGs, booking a demo is a great next step. 

How Integrated Business Planning helps you set, track, and achieve targets in CPG

Integrated Business Planning (IBP) is a strategic framework that is being increasingly adopted by companies in the consumer-packaged goods (CPG) industry. It supports these companies to align their business objectives with operational capabilities. At its core, IBP in the CPG context involves a comprehensive target-setting and planning process that encompasses all aspects of an organization’s operations, from volume forecasting to financial outcomes. 

The significance of integrating targets into CPG business planning can hardly be overstated. It ensures that all functional areas of the business are working towards common goals, facilitating strategic alignment and performance tracking. By embedding targets into the IBP, companies create a cohesive roadmap that not only outlines their aspirations but also provides a clear path to achieving them. 

In this blog post, we will explore the nuances of IBP within the CPG industry, highlighting the importance of target integration for strategic alignment and the impact it has on performance tracking. From setting actionable targets to translating volume forecasts into financial realities, we will explore the key components that make up an effective IBP strategy. 
 

1. CPG target setting: defining clear and actionable goals 
 

To effectively translate corporate targets into tangible results, it’s essential to understand that these targets typically stem from broad organizational goals. For instance, a company might aim to expand its market share or increase revenue for specific product categories within certain regions. To turn these broad goals into actionable targets, consider the following steps: 
 

• Specify metrics: Begin by defining the metrics that will measure success. Are the targets focused on sales volumes, revenue, market penetration, or other quantifiable indicators? Clear metrics are crucial for monitoring progress and understanding the impact of your efforts. 

• Segmentation: Dissect the overarching targets into smaller, more manageable objectives. This could involve setting specific goals for different departments, product lines, or geographical markets. Such segmentation helps in aligning the broader corporate goals with the day-to-day operations of various teams. 

• Develop action plans: For each segmented CPG target, draft a detailed action plan. This should include the allocation of resources, setting timelines, as well as outlining the key activities necessary to achieve the objectives. A well-structured action plan serves as a roadmap, guiding the teams towards the desired outcomes. 
   

Assigning accountability 

With the targets segmented and action plans in place, it’s crucial to assign accountability for each objective. Ensure that there is a designated team or individual responsible for the achievement of each CPG target. Clearly defined roles not only foster accountability but also ensure that there is a consistent and dedicated effort towards advancing towards the targets. This approach not only clarifies expectations but also empowers individuals and teams to take ownership of their contributions to the company’s success. 

By following these steps, you can ensure that your corporate targets are not just aspirational but are grounded in a framework that promotes action, accountability, and measurable progress. 
 

2. Incorporating targets into the CPG Integrated Business Plan (IBP) 
 

Integrating targets into the Integrated Business Plan (IBP) demands a comprehensive approach. This ensures all business functions align and collaborate effectively towards shared objectives. Here’s how to achieve this integration: 

• Departmental alignment: The traditional planning model in large-scale manufacturing firms is characterized by departmental silos, disparate planning spreadsheets, and lack of cross-functional collaboration. This lack of integration creates a disconnect between strategic, financial, and operational activities, making it hard to understand how the business will meet its targets. Therefore, for effective planning, it is imperative to ensure that all CPG departments—be it marketing, sales, demand forecasting, or finance—are in sync and aligned with the overarching goals. Such alignment is essential as it ensures that each department’s efforts contribute effectively towards the broader business strategy. 

• Resource allocation: Allocate resources such as budgets, personnel, and technology strategically, based on the priorities of the targets. Effective resource allocation empowers each department to have the necessary tools and support to achieve their segmented goals. 
   

By incorporating targets into Integrated Business Planning (IBP) with an emphasis on aligning departments and strategically allocating resources, CPG companies can forge a cohesive strategy. This strategy capitalizes on the strengths of each department, ensuring all efforts converge on achieving corporate goals. Such an integrated method not only coordinates efforts across the organization but also heightens the efficiency and impact of available resources. 
 

3. Volume-to-financials forecasting 

Developing a comprehensive Integrated Business Plan (IBP) involves a critical forecasting component that bridges product volumes and financial outcomes. Here’s how to approach this: 

• Volume forecasting: Start with detailed volume forecasts at the most granular level for each product category. While this level of detail is often unattainable without specialized software due to the extensive workload involved, it is crucial for accuracy. Leverage historical sales data, current market trends, and forward-looking sales projections to create forecasts that are as accurate as possible. The granularity of these forecasts matters significantly, as they serve as the cornerstone for all subsequent financial planning. To enhance reliability over time, consider integrating human expertise with self-learning AI capabilities for increasingly refined predictions. 

• Financial translation: Once you have detailed volume forecasts, the next step is to translate these into financial projections. This involves considering various factors such as pricing and promotional strategies, cost structures, and operational expenses. Understanding the financial implications of volume targets is crucial for setting realistic and achievable financial goals. 

• Single source of truth: It’s essential to maintain a unified system for tracking and reporting both volume and financial forecasts. IBP connects data from across the business, creating a go-to place for all the latest information. This ensures that there is consistency and accuracy in performance evaluation and decision-making processes. It also facilitates clear communication across departments and helps in aligning efforts towards the company’s financial objectives. 
   

By following these steps, you can ensure that your IBP is not just a plan, but a dynamic tool that accurately reflects both the operational and financial aspects of your business. This integrated approach to demand forecasting will help in making informed decisions that drive the business towards its strategic goals. 
 

4. Tracking performance vs. target in CPG 

Establishing robust tracking mechanisms is crucial for the success of an Integrated Business Plan (IBP). Here’s how to set effective milestones and key performance indicators (KPIs): 

Establishing milestones: Define clear interim milestones that pave the way towards achieving your IBP targets. These milestones should act as checkpoints that reflect progress and guide the business forward. 

Key performance indicators: Develop KPIs that are directly aligned with the IBP targets. Ensure that these KPIs adhere to the following criteria: 

• Specific: Each KPI should have a clear definition of what is being measured. This removes ambiguity and ensures everyone understands the goals. 

• Measurable: Utilize quantifiable metrics that allow for tracking progress in a tangible way. This could include numerical targets, percentages, or other data-driven measures. 

• Achievable: Set goals that are realistic and within the realm of possibility. This encourages motivation and maintains morale as CPG teams work towards these targets. 

• Relevant: Align KPIs with the broader business objectives to ensure that they contribute meaningfully to the company’s overall strategy. 

• Time-bound: Assign clear deadlines for achieving each KPI. This creates a sense of urgency and helps in prioritizing efforts. 
   

By adhering to these principles, you can ensure that your performance tracking is not only effective but also motivates and guides the teams towards the successful implementation of the IBP. Regularly reviewing these KPIs and milestones will also provide insights into areas that may require additional focus or adjustment. This approach allows for a dynamic and responsive approach to business planning. 
 

5. Regular CPG target review and adjustment 

To effectively manage and adapt an Integrated Business Planning (IBP) strategy in CPG, it’s crucial to engage in regular review and adjustment processes. Here’s how this can be structured:

• Performance reviews: Conducting regular performance reviews is a cornerstone of maintaining a dynamic Integrated Business Plan (IBP). These reviews serve as opportunities to evaluate progress against targets, analyze data trends, and identify any deviations from the plan. They are also essential for making informed adjustments to strategies, ensuring that the business remains on track to meet its objectives. 

• Data-driven decisions: Decisions should be based on reliable data from the unified IBP system. This approach ensures that performance optimization and target achievement are efficient and grounded in factual insights. 

• Monthly business review cycles: The performance against targets should be reviewed as part of the regular monthly business review cycles. This frequency allows for timely interventions and keeps the business agile. 

• Risks and opportunities outlook: As part of the CPG target review process, a comprehensive outlook on risks and opportunities is essential. This involves identifying factors that may threaten the delivery of targets (risks) and those that could potentially enhance performance (opportunities). Standardized calculations are key in this process, ensuring consistency and accuracy in assessing these factors. Additionally, the automated inclusion of these calculations into the overall forecast is crucial, as it streamlines the process and integrates risk management into the proactive planning strategy. Understanding these elements is crucial for proactive planning and risk management. 
   

By incorporating regular review and adjustment processes, companies can establish a feedback loop. This loop not only keeps tabs on performance but also improves responsiveness and adaptability. 

6. Continuous improvement 

Promoting a culture of continuous improvement is vital for long-term success. Encourage teams to actively seek opportunities to refine strategies, enhance efficiency, and realign actions with evolving market dynamics and consumer preferences. This mindset drives innovation and adaptability, which are key in today’s fast-paced CPG business environment. 

“Rising complexity isn’t tenable. Now is the time to take drastic action—in the form of a tech-driven end-to-end planning transformation.” — McKinsey & Company 

How Visualfabriq helps CPG companies achieve their revenue growth targets 
 

Visualfabriq aids CPG companies in reaching their targets by providing an innovative SaaS solution that encompasses Revenue Forecasting & Optimization. This tool simplifies the journey from strategic planning to operational execution and evaluation, with an emphasis on commercial elements. It offers commercial leaders a complete perspective of their P&L, fostering accurate and consistent decision-making through an in-depth forecast, constructed from diverse inputs and managed and optimized within the software. Furthermore, its powerful evaluation capabilities enable ongoing tracking of performance against targets. As a result, it assists CPG teams in pinpointing successful strategies and areas needing enhancement, promoting a cycle of ongoing refinement and adjustment. 
 

By adopting Visualfabriq’s AI-powered revenue management software suite, CPG companies can ensure their Integrated Business Planning is well-informed and strategically sound. Additionally, it remains adaptable and attuned to real-time data and insights. The smooth integration of revenue forecasting and optimization within the IBP framework empowers CPG organizations to implement their strategies effectively and meet their revenue targets.  

To see Visualfabriq in action and understand how it can radically transform your business planning, booking a demo is a great next step. 

Understanding TPM vs TPO: How is Trade Promotion Optimization different from Trade Promotion Management?

In the complex world of the consumer-packaged goods (CPG) industry, acronyms abound, often leading to confusion and miscommunication. Among these, two of the most critical acronyms that professionals grapple with are TPM vs TPO. While they may seem similar at first glance, the distinction between Trade Promotion Management (TPM) and Trade Promotion Optimization (TPO) is essential for anyone involved in revenue growth management (RGM) within the CPG sector. 

This blog article aims to cut through the acronym clutter and provide clarity on the meaning of TPM vs TPO. Both are integral to the strategic RGM framework, yet they serve distinct purposes and processes.  

So, let’s embark on a journey to unravel these two pivotal acronyms. We will shed light on their importance and explain how companies can effectively utilize them to bolster their bottom line. 

What is Trade Promotion Management (TPM)?  

TPM is the process that CPG companies use to plan, execute, and evaluate promotional activities aimed at boosting sales volumes and market share. Its focus is transactional—it is the administrative backbone that enables the effective management of promotional activities. It also makes sure that these promotions align with the company’s overall sales and marketing strategies. TPM coordinates the efforts of commercial and finance teams with efficient workflows. And it ensures that financial liabilities are accurately accrued and that deductions are cleared promptly. However, TPM alone is not sufficient to guarantee the success of promotional activities. 

The purpose of TPM is twofold for CPG manufacturers. Firstly, it aims to improve metrics such as market share, net revenue, or profit. Secondly, CPGs use it to encourage consumers to try or consider their brand, or to strengthen brand loyalty, especially during the launch of a new product or variant. 

The benefits of TPM extend beyond driving demand or trial. It strengthens retailer partnerships by motivating partners to stock and promote products in mutually beneficial deals. Moreover, TPM optimizes trade spending by ensuring promotional budgets are spent on activities that yield the highest returns. 

Fundamentals of TPM 

In the CPG industry, where competition is intense and product lifecycles are short, TPM serves as a critical lever to influence consumer purchasing behavior, drive demand, and encourage trial. The CPG marketer’s toolkit encompasses a variety of tactics to achieve this: 

• Essential deals and discounts like buy-one-get-one-free, price discounts or after sale rebates, or special bundles 

• Key attention-grabbing measures such as point-of-sale displays, special events, or highlighting new or enhanced product attributes 

• Advertising and additional marketing efforts often support these methods

Managing all of these requires tools that support collaboration and provide timely insights. Key account managers need to draw on current and historical data where appropriate to forecast results of proposed plans. They need insight into the success of promotions while they are in progress. And they need to be able to plot workflows, and share progress and results with colleagues, managers, and partners where appropriate. 

What is Trade Promotion Optimization (TPO)?  

Trade Promotion Optimization (TPO) distinguishes itself from Trade Promotion Management (TPM) by its emphasis on maximizing promotional effectiveness. The goal is to secure a higher return on investment. TPO advances TPM’s approach by integrating predictive analytics. This addition helps sharpen promotional tactics, ensuring campaigns reach their peak potential. It often incorporates AI technology to propose more impactful promotional methods. Additionally, TPO employs scenario analysis, crafting plans with a greater likelihood of fulfilling the set objectives. 

Benefits of implementing TPO in the sales strategy: 

• Make informed decisions: Trade promotion optimization delivers the right data and the right insights so that you can make the right decisions. With the relevant information at your fingertips, justifying your programs to your colleagues and managers becomes much easier. 

• Foster collaboration: TPO gives account managers more time and more insight to share with retail partners. So, they can build a deeper relationship, based on mutual understanding, and develop more innovative, win-win promotions. 

• Increase ROI: By optimizing trade promotions, companies can ensure that their promotional spend is yielding the highest possible returns. 

• Optimize trade spend: By analyzing and optimizing trade spend over and above individual promotions, manufacturers can deliver a reliable outlook and sustainable growth in the long-term. 
  
   

TPO’s levers for success 

To optimize trade promotion activities and achieve higher ROI, companies should:  

• Leverage all relevant data: Create more effective campaigns by effortlessly integrating and automatically combining multiple data sources, eliminating the need for extensive manual effort. 

• Conduct post-promotion analysis: Analyzing the actual performance of promotions helps identify key drivers of success and areas for improvement. 

• Employ AI-driven tools: Advanced tools use AI to plan and optimize promotions, providing actionable insights and recommendations. 
  
  

TPM and TPO: joined at the hip? 

The roles of TPM and TPO are inherently complementary within a holistic trade strategy framework. TPM lays the groundwork by managing the logistical aspects of trade promotions, such as budgeting, execution, and settlement. On the other hand, TPO enhances this foundation by providing strategic insights. It analyzes past performance data to forecast future outcomes, thus guiding decision-making to optimize promotional activities for better returns. Together, they form a cohesive approach that balances the practicalities of promotion management with the strategic foresight of optimization. 

Although TPM and TPO should seamlessly integrate, the reality is that discrepancies can arise when companies employ different, isolated software tools. To achieve a seamless ‘optimize-as-you-plan’ process, it’s crucial to have an integrated tool that combines both TPM and TPO functionalities. This integration allows for timely adjustments and optimization, eliminating the need for back-and-forth communication that standalone tools necessitate. With an integrated system, as soon as a plan is devised, it can be instantly analyzed and optimized within the same tool. This not only streamlines the workflow but also ensures that the optimization insights are directly incorporated into the planning phase, leading to more informed decision-making and a more agile promotional strategy. Such a tool fosters a dynamic environment where planning and optimization are not separate stages, but a continuous, iterative process. 
 

TPM vs TPO: key differences 

To sum up: though TPO and TPM may seem similar, they are separate disciplines, each with their own approach and scope. While TPM focuses on the management aspect of trade promotions, TPO is concerned with the optimization of these promotions. TPO uses big data and predictive analytics to refine and improve promotional strategies. It leverages advanced analytics tools to uncover patterns, identify opportunities, and support informed decisions that maximize promotional effectiveness and drive better results. By embracing TPO, commercial teams can elevate their trade promotion strategies to a whole new level of success. 
 

Common misconceptions about TPO 

• Complexity: The notion that TPO is overly complex is a common misconception. While TPO does involve sophisticated analytics, modern solutions are designed with user-friendliness in mind. They often feature intuitive interfaces and guided workflows that simplify the optimization process. By demystifying data and providing actionable insights, TPO tools make complexity manageable, even for those without a deep background in data analysis. 

• Cost: It’s a myth that TPO is prohibitively expensive for smaller businesses. TPO solutions come in various scales and price points, catering to the needs and budgets of different company sizes. The investment in TPO is justified by the significant ROI it delivers through more effective trade promotions. Smaller companies can benefit from TPO’s ability to maximize their marketing budget, ensuring that every dollar spent is used to its fullest potential. The right tool also streamlines processes and bolsters the sales organization’s overall efficiency. 

• Implementation: Concerns about the time required to implement an effective TPO system are understandable. Introducing a new system can seem daunting, potentially disrupting current workflows. However, the right TPO solution is designed to integrate smoothly and start delivering results swiftly. This means that companies can quickly realize returns from optimized trade promotions, offsetting any initial change management challenges. An effective TPO system is one that not only fits seamlessly into your operations but also accelerates your time to value, proving its worth by enhancing your promotional strategies efficiently. 
  
   

What to expect from TPM and TPO software solutions? 

The trade promotion landscape has evolved significantly since the days of juggling between ERP systems and spreadsheets. The traditional approach led to a cumbersome process, especially when accessing historical and current data was not straightforward. Commercial teams found themselves in a tedious cycle of cutting and copying data, a method prone to errors and inefficiencies. 

This outdated system hindered the ability to forecast the effectiveness of trade promotions and monitor their progress. Moreover, it stifled innovation. Account managers, under pressure, might resort to repeating past promotions with minor updates, rather than crafting new, data-driven strategies. 

The introduction of dedicated TPM software has brought automation, consolidating promotion planning into a unified system and integrating a wide array of data, including third-party sources. What’s essential is a tool that not only offers visibility into trade promotions but also facilitates their active management and optimization. By automating administrative tasks, commercial professionals can focus on more strategic aspects of their roles. The ideal software doesn’t just present plans; it enables users to manage and enhance them, making trade promotion a proactive element of business strategy. 
 

The key to a successful TPM tool lies in several factors: 

• Ease of use: intuitive interfaces – User-friendly interfaces are crucial for successful software adoption. As a TPM professional, your expertise is in planning, approving, and optimizing promotions. An intuitive interface allows you to focus on these core activities rather than on managing technology  

• Smart workflow automation – Workflow automation in TPM streamlines the entire promotional process, significantly reducing manual tasks and errors. Think of the administrative overhead of code switching, for example, and how it can make it hard to track progress over the course of a promotion. This efficiency not only saves time but also allows for more strategic thinking and planning. 

• Fully configurable systems – Every organization and product assortment is unique, necessitating a TPM solution that is fully configurable. Your software should allow you to tailor approval workflows and execution plans to fit your organizational structure and operational style, not the other way around.  

• Integration capabilities: seamless connectivity – A robust TPM solution must offer seamless integration with existing systems. Stress-free connectivity with your ERP system to access ex-factory data is just the starting point. The software should also provide easy access to other systems and syndicated data. Without this level of integration, you’re operating without full visibility. 

• Data Integration: comprehensive access – Optimizing trade promotion management requires access to all relevant data. This includes not only internal data but also third-party or syndicated content. If your platform can’t provide this comprehensive access, you’re missing out on critical insights that could drive your promotions. 

• AI and Predictive Analytics: the future of TPO – The integration of AI and predictive analytics into TPM/TPO systems represents the cutting edge of trade promotion optimization, enabling a level of foresight and strategic planning that was previously unattainable. It can generate baseline and uplift factors tailored to the unique dynamics of each account and SKU, and suggest promotions based on predictive analytics. ensuring that every promotion is as effective as possible. 
   

Utility of TPM and TPO in the CPG Industry  

The utility of TPM and TPO in CPG is multifaceted, offering significant benefits across various aspects of promotional activities: 

• Improving efficiency: TPM and TPO streamline promotional efforts by integrating planning and execution into a cohesive process. This integration reduces manual tasks, minimizes errors, and enhances the overall effectiveness of trade promotions. 

• Boosting sales: By leveraging data-driven decision-making, TPM and TPO have a profound impact on sales growth and market share. They enable companies to craft promotions that resonate with the market, ultimately driving sales and expanding market presence. 

• Enhancing metrics: TPM and TPO provide better metrics for measuring promotional success, which is crucial for understanding the effectiveness of trade promotions and making informed decisions. These metrics help in assessing the ROI and overall impact of promotional activities. 

• Accurately forecasting: With improved accuracy in sales forecasting, companies can plan their promotions more effectively and assess their performance with greater precision. Accurate forecasting is essential for aligning promotional activities with market demand and optimizing inventory management. 

• Providing granular insights: Granular volume analysis benefits decision-making by providing detailed insights into sales trends and consumer behavior. This granularity helps in tailoring promotions to specific market segments and maximizing their impact. 

In summary, TPM and TPO are indispensable tools for the CPG industry, enhancing efficiency, boosting sales, providing better success metrics, improving sales forecasts, and offering granular analysis for informed decision-making. These tools not only improve the strategic execution of trade promotions but also contribute to the sustainable growth and competitive advantage of CPG companies. 
 

Visualfabriq: Leading the way in Trade Promotion Management and Optimization  

Visualfabriq is at the forefront of TPM and TPO, offering businesses a comprehensive solution with their Trade Promotion Master. This tool is designed to facilitate the entire trade promotion lifecycle, from initial planning to post-promotion analysis. It allows for the integration of various data sources, including ex-factory, EPOS, and syndicated data, eliminating the need for manual updates. 

The software generates reliable forecasts from the beginning and provides real-time insights throughout the promotion’s duration. These forecasts are enhanced by Visualfabriq’s AI technology, which accurately predicts the ROI and performance of promotions, tailored to the company’s specific goals. 

A key feature of Visualfabriq’s trade promotion management software is its single-screen interface, which simplifies the sharing of insights with partners, ensures preparedness for colleague inquiries, and contributes to more productive meetings. As a true software-as-a-service application, it guarantees that users are always working with the latest features without any downtime for upgrades. 

Visualfabriq’s commitment to innovation means that users can immediately benefit from new functionalities as soon as they are released. This approach allows companies to concentrate on optimizing their trade promotions, rather than managing software configurations, leading to more efficient and effective promotional strategies. 

TPM vs TPO: in conclusion 

To encapsulate the essence of TPM and TPO, it is crucial to recognize that they are not opposing forces but complementary disciplines that, when combined, form a cohesive whole. So instead of framing the discussion as TPM vs TPO, it is actually more apt to discuss TPM and TPO as two integral components that work in tandem. 

Few within the CPG industry will disagree that the significance of a well-crafted trade promotion strategy can hardly be overstated. With businesses in this sector investing nearly 30% of their revenue on promotions, the stakes are high. A successful strategy not only drives sales and market share but also ensures that promotional spend is an investment, not just an expense. The integration of TPM and TPO in software like Visualfabriq’s Trade Promotion Master can be a game-changer, providing the tools needed to plan, execute, and analyze promotions with precision and efficiency. Ultimately, the goal is to turn the significant investment in trade promotions into measurable success. 

Interested to learn more about how Visualfabriq enhances both TPM and TPO?  Arrange a demo today!  

How to reinvest trade spend for revenue growth in CPG?

The level of trade spending in consumer-packaged goods (CPG) remains substantial, with manufacturers making significant investments in trade promotions. Savvy allocation of trade spend, therefore, doesn’t just create a competitive advantage for CPG firms. It has become a vital necessity for those steering the ship. CPG companies are increasingly recognizing that to drive revenue and build robust partnerships with retailers, they need to think beyond traditional trade spend tactics. 

The old retail playbook of on-invoice discounts and broad-brush trade spend—often including a fair amount of non-working or goodwill payments—is being rewritten. Leaders in the field are now deploying more creative, impactful strategies that deliver tangible results. They’re reallocating resources to secure prime shelf space, execute promotions with precision, broaden distribution, and invest in product innovation that captures consumer interest. 

Data is the compass that guides these decisions. Accurate, actionable insights ensure that trade funds are placed where they’ll generate real growth. It’s about making every promotional dollar work overtime to contribute to the bottom line. 

Collaboration is also key. When manufacturers and retailers align their efforts, they create a synergy that transcends traditional buyer-seller dynamics. Joint initiatives become a shared journey towards greater success for both parties. 

This article will discuss the strategic reinvestment of trade spend in CPG, offering insights and tactics for those directly involved. It aims to share knowledge that empowers CPG manufacturers to invest wisely, cultivate prosperous retail partnerships, and foster reciprocal growth. 

Reinvesting trade spend in CPG: 5 key considerations

1. Collaborative investment with retailers 

Collaborative investment with retailers is essential for achieving mutual growth in the CPG industry. It’s about manufacturers and retailers coming together to identify and execute joint growth initiatives that deliver benefits for both sides. 

Key insight: Manufacturers should engage in open dialogues with retailers to pinpoint and agree on collaborative investments that are pivotal for the retailer’s success. This could include investing in marketing events, in-store promotions, or product launches that align with the retailer’s strategic goals. 

Example: By investing in a retailer’s key promotional event, manufacturers can drive significant sales uplift while simultaneously cementing the partnership. This collaborative approach ensures that trade funds are not just an expense but an investment in a shared future. 

Such strategic cooperation goes beyond mere transactions; it’s about creating a symbiotic relationship where both manufacturer and retailer thrive. By focusing on shared objectives and leveraging each other’s strengths, they can unlock new levels of efficiency and market penetration that would be challenging to achieve independently. 

2. Reallocating non-working trade spend 

Reallocating non-working trade spend, also known as goodwill payments, is a strategic move that can significantly enhance a CPG manufacturer’s profitability. These are funds traditionally spent without an expectation of a direct, tangible return. However, the evolving CPG landscape calls for a more calculated approach. 

Key insight: Redirecting non-working trade spend toward investments with quantifiable returns can optimize the use of trade funds. A prime example of such a strategic investment is securing prime shelf space, which ensures product visibility and accessibility, thereby driving sales. 

Example: Utilizing non-working funds to obtain more shelf facings or second placements allows manufacturers to secure a return on investment through heightened product visibility and increased sales. This strategic positioning also fortifies the manufacturer’s negotiation stance with retailers, supported by data on expected sales volumes, recommended selling prices, and projected retailer sales. 

In summary, the reallocation of non-working trade spends to strategic investments is not about taking money away from retailers. It ensures funds are used effectively, leading to a tangible return on investment and ultimately stronger retailer relationships.  

3. Moving away from on-invoice promotional discounts 

On-invoice promotional discounts are often an inefficient use of trade funds, as retailers can order excess discounted volume to stock up and sell at regular prices after the promotion period 

Key insight: Instead of letting retailers save on these discounts, it’s more strategic to reinvest the funds into mutual growth efforts. 

Example: For example, manufacturers can stop giving direct discounts and use those funds for joint marketing campaigns, benefiting both the manufacturer and the retailer. This move from direct discounts to reinvestment signifies a deeper understanding of creating value in the CPG industry, aiming for long-term profit and market growth. 

4. Restricting volumes sold with on-invoice discounts 

By selling less volume with on-invoice discounts, manufacturers can save money and reinvest. 

Key insight: Transitioning to settlements based on sell-out, such as scan promotions, can mitigate excessive forward buying. This method aligns promotional costs more closely with actual consumer sales, ensuring a more consistent sales flow. 

Example: Implementing scan promotions allows manufacturers to synchronize promotional spending with real-time sales, preventing retailers from overstocking. This strategy ensures that promotions drive immediate sales without future market fluctuations. 

By adopting this approach, manufacturers can foster a more predictable and stable sales environment. 

5. Making data-driven decisions 

Effective trade spend reinvestment in CPG is contingent upon the utilization of accurate data. 

Key insight: Access to detailed data enables CPG businesses to make informed decisions regarding the allocation of trade spend. This insight is crucial for ensuring that investments are targeted and effective. 

Example:  Utilizing data analytics, manufacturers can ensure that promotional investments are driving incremental growth and aligning promotional costs with actual consumer sales.  

In essence, data-driven decisions are the backbone of strategic trade spend allocation. They provide a clear understanding of market dynamics and consumer behavior, allowing manufacturers to invest in areas that yield the highest returns. This approach not only optimizes trade spend but also enhances the overall effectiveness of promotional strategies. 

Trade spend reinvestment: takeaways for CPG manufacturers 

The shift towards strategic reinvestment of non-working trade spend marks a significant evolution in CPG. By focusing on data-driven decisions, manufacturers can ensure that their investments are not only efficient but also effective in driving mutual growth with retailers. 

These are the key focus areas: 

• Collaborative investment with retailers is essential for achieving growth 

• Reallocating non-working trade spend can have a significant impact on the bottom line 

• Limiting on-invoice discounts allows for a more strategic use of trade funds. 

• Avoiding excessive forward buying ensures a consistent sales flow and prevents market disruptions. 

• Data-driven decision-making enables manufacturers to allocate trade spend where it will have the greatest impact. 

For a broader perspective, we invite you to download Visualfabriq’s Guide to effective Trade Spend Management in CPG.  

If you’d like to learn more about software capabilities, booking a personalized demo is a great next step. It’s an opportunity to see Visualfabriq in action and understand how it can transform your trade spend management.