The 2012 Customer and Management Channel Survey is an annual poll, with findings summarized in a collaborative report called “Winning Where it Matters: A Focused Approach to Capturing Growth”, from the Grocery Manufacturers Association, (GMA), McKinsey & Company and Nielsen. About 220 executives from more than 50 companies participated in the 2012 survey, including industry heavyweights such as Nestlé, Kraft, Coca-Cola, Hormel Foods, Hershey’s, ConAgra, and Snyder’s-Lance.
The most successful strategies for winning market share revealed a big divide between the most profitable and average-performing companies in a sector, the report found.
“Best-practice sales strategy continues to include heavy investment in emerging channels, an emphasis on customer collaboration and a focus on investing in next-generation capabilities,” said GMA’s senior director of business and industry development Brian Lynch.
Online sales, retailer collaboration, talent development
Emerging channels include e-commerce, as well as other high-growth channels, such as dollar stores and clubs. Meanwhile, the most profitable CPG companies were five times as likely to collaborate with retailers, tapping into their own consumer knowledge to help retailers reach new audiences, while working with retailers on mutually beneficial pricing and category strategies.
The top-performing companies also spent more than twice as much time on developing talent than their lower-performing peers, the report found.
The growing Hispanic market is a new trend emerging in the report this year.
“Hispanic consumers are a key growth segment, with buying power increasing 50 percent through 2015,” said Kris Licht, partner, consumer practice, at McKinsey & Company. “CPG companies that win with Hispanics focused on tailored products and marketing, created better in-store experiences with retailers, and increased Hispanic-focused resources and capabilities.”
How big is the gap between ‘winning’ companies and lower performers?
Those with the best pricing strategy were able to increase prices 1.2 percentage points more than the category average, while gaining a full percentage point more in market share.
Those that were most successful in marketing to Hispanics increased sales to Hispanics by 2.5 percentage points more than the category average.
And those that targeted high-growth channels, such as dollar and club stores and e-commerce, found that a quarter of their growth came from these areas – beating their average competitors by as much as 16 percentage points.
The full report is available to download here.