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An Inflation-Proof Strategy for a Food Conglomerate

A preeminent food manufacturing conglomerate, with a solid record of growth across North Africa and notably in Libya, faced a critical challenge in achieving optimal profitability. Despite significant market share and volume increases, their profit margins remained suboptimal, primarily due to an undivided focus on expansion at the expense of profit sustainability. With inflationary pressures intensifying, the company—referred to here as FoodCo* for confidentiality—sought our expertise to refine their approach to revenue growth management (RGM) and ensure profit resilience.

Diagnostic and Strategic Redirection

Our intervention commenced by benchmarking FoodCo’s current capabilities against over 200 industry standards. This diagnostic phase was pivotal in pinpointing deficiencies and crafting a tailored strategy to enhance FoodCo’s profitability by 200 to 250 basis points, adjusted for inflationary impacts.

The strategic overhaul involved a meticulous realignment of pack price architecture, optimisation of promotional investments, SKU prioritisation, and enhanced focus on in-store trade investments. These measures were designed not only to withstand inflationary pressures but also to augment category performance and market penetration, thereby boosting ROI across the board.

Capability Enhancement and Sustained Implementation

To embed these new strategies effectively, we focused on building internal RGM capabilities within FoodCo. This involved integrating RGM practices into daily commercial routines and instituting robust training programs, including a train-the-trainer model, to foster a cadre of internal RGM champions. These champions were instrumental in cascading knowledge and practices throughout the organisation, thereby ensuring the sustainability of these initiatives.

Moreover, we developed a wide-ranging RGM playbook that outlined governance structures, cross-departmental collaboration mechanisms, and a capability-building framework complete with tutorials and templates. A central element of this phase was the establishment of an RGM control tower, which played a crucial role in monitoring progress, enhancing adoption, and reinforcing the discipline required to maintain rigorous RGM practices.

Results and Expansion to New Markets

The initial implementation of this revamped strategy in the pilot markets yielded remarkable results: a 12% increase in gross profits and a 4% uplift in revenue, with a significant portion of this growth materialising within the first year. Encouraged by these outcomes, FoodCo expanded the RGM initiative to additional markets, where it continues to generate scalable benefits.

The success of the pilot projects not only reinforced FoodCo’s profitability but also enhanced transparency and cross-functional collaboration within the company. This holistic view of operations has facilitated a more integrated and strategic approach to managing growth and profitability, thus positioning FoodCo for sustained success in the face of ongoing economic fluctuations.

*We take our clients’ confidentiality seriously; whilst names are changed, outcomes remain real.

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