The last days before Major League Baseball’s trade deadline brought a flurry of activity. Some teams positioned themselves for big wins in the short term. Others tried to balance the present with the future.
The Los Angeles Dodgers went all-in for this year. They announced a down-to-the-wire trade for ace pitcher Yu Darvish, a move that makes them the clear favorite for this year’s World Series. News outlets reported the trade makes them “virtually unstoppable” on the path to a 2017 championship.
The Houston Astros chose a longer-term approach. They have the best record in the American League, but pundits doubt their rotation can hold up in the playoffs. Still, they passed on trading for a top-notch pitcher, choosing to protect their current assets to ensure success beyond just this year.
Which strategy is better? Invest to win now, or focus on the future?
In the CPG industry, food and beverage manufacturers weigh these sorts of decisions every day and pursue strategies based on what they know of the present and what they expect might happen in the future.
In a climate where many companies face declining sales, executives have taken various approaches in the pursuit of success. Some have launched aggressive cost-cutting measures that include layoffs, factory shutdowns and zero-based budgeting initiatives. Kellogg’s is taking some of these steps to keep the company on track to meet its full-year financial goals and deliver positive results to investors. Others have invested in the future through acquisition, such as Dr Pepper Snapple with its Bai Brands acquisition. Just about all are investing in ecommerce and other technology solutions to drive topline revenue and position for sustainable growth.
Right, wrong or indifferent, these approaches have one thing in common: They are disruptive and enormously complex.
Growth doesn’t have to be that difficult.
Some food and beverage manufacturers are generating significant short- and long-term growth through an overlooked channel of trade we at CMG call the Independent Wholesaler Channel. The wholesalers and independent foodservice operators that make up this burgeoning channel service hundreds of thousands of independent foodservice operators and offer brand manufacturers organic, profitable and sustainable growth. There are no barriers to entry and no capital investment required that weighs on profitability—offering tremendous results.
CMG has leveraged this channel to generate 700 percent growth for one company’s portfolio over just three years. For another company, we grew sales 28 times their national average. For yet another, we created a $9 million revenue stream with a single snack SKU.
Food and beverage manufacturers recognize they need to break out of their conventional thinking and pursue new channels of trade. The Independent Wholesaler Channel is the answer.
CMG helps CPG companies penetrate this channel for both short- and long-term success. Ask us how.