Client Description

Large Regional Retailer

Background

The Retailer and Manufacturer agreed to evaluate value chain opportunities to reduce the COGs of key product lines and to improve the effectiveness of trade funds to generate incremental sales and profits.

Objectives

Drive incremental sales and profits between trading partners for critical retailer corporate categories and brands.

TPG Approach

• TPG conducted a thorough analysis of the value chain opportunities for a number of selected manufacturers and a common retailer within designated Retailer grocery categories.
• TPG assessed trade fund spending for critical manufacturer brands in the meat and seafood department of a major retailer and identified opportunities related to have trade fund policies and local spending approval levels were hampering opportunities for growth.
• TPG coordinated the analysis and developed a pilot design to re-allocate funds to selected brands and related promotional programs.
• Benefits and investment costs were tracked and summarized at the end of the pilot.

Impact/Results

• A pilot was implemented that generated a 7% increase in sales and a 6% increase in profit against the base period.
• Trade funds for the following fiscal year were redesigned and unbundled for use in selected high-growth, high value brands.