Developing a successful CPG product is a significant milestone for emerging manufacturers. But that is just the start of your company’s growth journey and finding a sustainable path to success.
Knowing what data you need is the first step. With reliable data, you can tap into new opportunities that increase distribution and minimize out-of-stocks. Understanding what behaviors are driving consumer demand helps you allocate resources more efficiently. Those insights can guide your manufacturing and get more of your products to retailers and consumers.
Yet CPG manufacturers face common challenges as they move from product launch to operationalization. Your company might be experiencing these already:
● Growing distribution
● Understanding fluctuations or gaps in current distribution levels
● Minimizing out-of-stocks and being delisted
● Understanding demand drivers and what’s influencing consumer behaviors
Three ways to combat operationalization challenge from product launch to profitable
Optimizing your manufacturing capacity and getting products distributed to stores on time is critical as you move into operationalization or the next phase of your CPG company’s growth.
These three steps can help ensure a smoother transition:
#1. Spot and seize opportunities to grow distribution
Analyzing distribution metrics and other sales data within your category allows you to spot where current distribution lags competitors, and how increasing distribution impacts your retailers’ sales. Similar data can show pricing changes at the retail level and highlight new category entrants that may affect your distribution levels. Accurate data will help you make decisions and adapt to changes quickly. Making your case for increasing shelf space to a retail partner or adjusting production to maintain optimal inventory levels becomes achievable and repeatable.
PRO TIP: Syndicated RMS data that shows %ACV for specific UPCs helps identify subtle shifts in distribution levels that can impact your product’s availability and sales growth. Using this data to compare your product’s distribution, velocity, and sales volume to competitors helps uncover new opportunities. Sorting by pack size, attribute, and pricing will dial in on the “why” behind distribution variations and gives emerging CPG companies actionable insights to address those changes.
#2. Minimize the potential for out-of-stocks
You have a great product, but if you can’t keep it on the shelf, retailers can’t sell it. That’s the key to operationalization: ensuring that your CPG company can keep products stocked and available to retailers and consumers. No one benefits from out-of-stocks. Retailers lose revenue, and consumers will look for alternative brands. Using accurate data helps your company avoid out-of-stocks that lead to lost sales and consumer loyalty.
PRO TIP: Visibility into retailer inventory levels helps identify potential out-of-stocks quickly so companies can pivot production or change suppliers to ensure product availability. Analyzing RMS data can highlight why your product may be more vulnerable to out-of-stocks than competitors. These could include differentials in pricing or promotion, insufficient distribution volume, category-level demand shifts.
#3. Improve your forecasting abilities
Evaluating current demand and anticipating future needs is crucial to effective planning and a key component of operationalizing your business. The right volumetric forecasting tool allows CPG manufacturers to compare demand with supplier volumes and production levels. Those insights can determine future supply levels by looking at product performance, media spend, promotions, distribution and other market levers.
PRO TIP: Demand models with consumer behavior data help identify changes before they impact sales and product availability. With careful monitoring of changes across key markets and demographics, you can interpret consumer buying patterns and better prepare for future demand.
How Nielsen Can Help
Nielsen is the partner that emerging CPG manufacturers need as they transition from product launch to operationalization. Nielsen’s Automated Business Drivers provides easy-to-digest insights into changes in demand, distribution, and retailer assortment. Together with exclusive Retail Management Services (RMS) data layered with media data and advanced analytic models, you can accurately plan production capacity to avoid out-of-stocks and allocate resources effectively.