Business Model Reinvention for a Global Food Company
The Region VP of a $2B global food manufacturer needed help with one of his most important markets.
The business had performed modestly in recent years – delivering flat topline in a flat category while growing profit at a low single digit rate. Margins were contracting. Marketing budgets had been cut for three straight years and stood at half their prior peak. Smaller upstart competitors were taking share in the company’s largest and most profitable segment.
Unfortunately, due to the region’s size and importance, profit relief was not an option. The team knew their position was not sustainable without significant reinvestment, but they felt trapped and powerless as they analyzed the situation.
Our review identified the major issue: productivity had not even offset inflation, let alone provided fuel for growth. The solution involved reinvention of the business model with a strong focus on productivity in the manufacturing and R&D environment. In addition, a review of the brand portfolio uncovered close-in growth options in multiple segments – by leveraging “lift and shift” innovation opportunities with successful products from other markets.
After a two-day workshop to generate ideas against the turnaround hypothesis, the team could see a clear path forward. As the market leader said, “For the first time I can see a light at the end of the tunnel, and I know it’s not a train coming at me.” Under the new plan, productivity gains will offset inflation and support profit delivery – the team has already identified 2/3rds of their three-year productivity goal from manufacturing alone. Topline growth from the team’s existing strengths in revenue management and new product launches will support marketing reinvestment.
We are excited to see the turnaround take hold in 2020!
“The value of an ‘outside in’ perspective really helped the team reinvent their business model. I was equally pleased with the HOW of collaboration, cross functional alignment & senior management buy-in.”