After experiencing strong volume growth thanks to a combination of penetration and demand from the 70s to the 90s, the FMCG world has found itself in the last 10 to 15 years in a situation where the growth of many categories has stalled. Achieving growth with the same levers is becoming increasingly difficult, resulting in the need to optimise elements like net prices and mix. Managing top line to optimise its return is known as net revenue management.
In a 2017 study, the Boston Consulting Group explains: “In the past three years, more than two-thirds of revenue growth – and an even bigger share of profit growth – among the top 50 global fast-moving consumer goods (FMCG) companies has come from pricing and mix rather than from volume increases”.
The challenge of net revenue management is to be able to sell the right product, in the right format and channel, to the right consumer at the right price. Easier said than done, right? Clear information and strategy are a large part of the answer and that’s where smart data becomes essential.