BEER REVENUE MANAGEMENT
Overall beer category margins are increasing with the consumer shift to craft. As consumers experiment and develop larger repertoires, taste variety becomes important. The rise of craft in both the physical and online channels, including direct fulfillment by craft breweries, is seeing a shift into smaller pack formats which require little or no price discount and have more attractive margins to both retailers and manufacturers. As opposed to mainstream beer, where case sales of mainstream beers in many instances exceed 80 per cent of revenue. Read more on this topic here.
What is Revenue Management?
Revenue Management is one of the best tools organizations can use to maximize real value. Organizations with good revenue management discipline help drive better visibility, control, decision-making and collaboration across the entire-functional teams. Those who can respond faster to evolving market conditions have a massive advantage over those who are crawling to make even the simplest commercial decisions.
KEY TO REVENUE MANAGEMENT IN THE BEER CATEGORY:
- Evaluating and protect market positioning by continually monitoring and reacting to channel shifts
- Continuous tracking of consumers and their changes in how, what and when they buy
- Mapping products and packs to specific, differing occasions, missions and price points. For example, which occasions and packs play best for nolo alcohol beers, which for higher ABV craft beers and styles, and which for mainstream full and mid-strength beers?
- Portfolio management, involving end-to-end value chain assessment across the portfolio; seeking opportunities to premiumise through adjustments to price and weight; and launching into higher price tiers via additional product benefits or larger pack sizes, premium innovation, and mix management to accelerate higher value lines.
TRADE PROMOTION MANAGEMENT
Trade Promotion Management (TPM) is defined as managing the entire life-cycle of trade promotions, and includes budgeting, planning, payments, processing of customer short-pays, deduction resolution, and post-promotion analysis. CPG organizations spend millions each year on promotions that are applied with the aim of increasing their market share and revenue. However, it is often unclear how many of these promotions have been successful in terms of increasing revenue, profit and market share. Successful TPM is defined by being able to see the effectiveness of trade spend, track which promotions are producing the most of ROI and having the ability to counteract competitor’s activity and increase market share.
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