Scaling Insights: From $410M to $1B+ in Revenue Through Data-Driven Decisions

How a CPG company leveraged data insights to enhance their already strong culture and achieve their lofty revenue goals.

Telling data driven sales stories allows companies to sharpen their existing sales relationships and grow their top line.

In the world of consumer packaged goods (CPG), scaling a business in a hyper-competitive space is as much about innovation and product quality as it is about understanding and leveraging the right data. Recently, we had a client come to us with a challenge. They had a successful brand and a popular product, but their revenue was starting to plateau at around $400M.

When we engaged with the brand, a few things were evident:

They had a talented team.
They were willing to spend and invest in growth.
They were early in their analytics journey.

Our recommendation was that they enhance their already strong company culture through data-driven sales strategies. By using data they would be able to smash through that revenue plateau and see the new top-line growth they were looking for.

The Starting Point: A Strong Brand in a Competitive Arena

Organic, healthy CPG brands are one of the most competitive verticals in retail. There are constant challengers to the incumbents, and if you don't innovate, you die. This client was already selling in all the top retailers such as Walmart, Target, Whole Foods, Sprouts, Costco, Sam's Club, and CVS. They were able to do this by simply leveraging their team's talent, relationships, and intuition.

In order to jump to the next level, they needed one more piece of the puzzle: data.

The Catalyst of Change: Embracing Data-Driven Sales

The beginning of the story was particularly difficult for two reasons. The first reason was that our client had been successful doing things a certain way for a long time. We needed to make sure they knew that bringing data to inform key decision points would enhance what they were already good at, not replace it—a subtle but important cultural enhancement.

The second reason was that this client, despite having access to Point of Sale (POS) data, did not use it. At all. We had to make sure our analytics efforts made an immediate impact, or internal skepticism would lay waste to our data-driven plans before they got started.

With that in mind, we got to work with a three-step approach.

Step 1 - Consolidating the Data Firehose

The first step was understanding the firehose of data at their disposal. POS data was available, but it wasn't being used. There was even skepticism about whether they should be paying for it at all. By consolidating this data and making it digestible, we could provide actionable insights to support sales. Capturing that low-hanging fruit was important to get broader buy-in from the senior team.

Once we had actionable control of the "firehose," it was time to start using this information to sharpen the company's sales strategies.

Step 2 - Actionable Insights Drive Sales Growth

As stated before, this organization already had good sales intuition to lean on. We needed to validate that intuition, and where possible, push it to another, actionable level.

The main areas we focused on were:

Sales Strategy: Our data-driven approach informed robust strategies, enabling us to track their effectiveness and iterate quickly. A pivotal strategy involved expanding our product offerings at Walmart—not just by introducing a new flavor but by offering a product with entirely new utility. Achieving this required hitting specific numbers, demanding alignment across the organization. From product development and pricing strategies to the sales and e-commerce teams, every department was synchronized to ensure the success of the new product offering before its pitch to Walmart.
Supply Chain Optimization: Leveraging sales velocities, seasonality, marketing efforts, and lead times, we ensured inventory was always positioned optimally. This precision allowed us to have the right amount of product at the right retailer at the perfect time, minimizing stockouts and overstock situations, thus maximizing sales opportunities.
Insight-Driven Product Development: Utilizing SPINS data, we identified and targeted categories ripe for disruption. By understanding which product categories were saturated and where there was potential to capture market share, we could direct our product development efforts more strategically, ensuring our innovations were both timely and impactful.
Strategic Pricing Architecture: Different pricing strategies were deployed across various retailers to attract new customers effectively. By tailoring our pricing architecture to the nuances of each retailer's customer base, we optimized our appeal to different segments, thereby expanding our market reach and enhancing customer acquisition.
Innovative Testing Methods: Adopting multivariate and A/B testing, traditionally seen as e-commerce tools, proved invaluable. For example, we tested product names within our house file and experimented with messaging hierarchies in customer acquisition channels. This approach allowed us to refine our offerings and marketing strategies creatively and effectively, even in a retail context.

These were the main areas of focus in the near to medium term of working with this particular client. The level of coordination was difficult to pull off, but given we were using data to help drive the discussions, it helped everyone be more efficient by speaking a unified language.

Step 3 - Diversification for Sustainability

We started to challenge many of our preconceived beliefs about the brand. Our main goal was to hit $1B+ in revenue. This goal began to shape all of our questions:

Do we have the right product offerings to reach $1B in revenue?
Are we selling our product in the right retailers?
Are we acquiring the right customers?
Are there strategic acquisitions we can make to get us there faster?

Once you have a repeatable, iterative data process in place, it empowers everyone involved to ask the right questions.

Beyond Analytics: The Path to Scaling

While data analytics played a pivotal role in their scaling journey, several other factors were crucial in transitioning from $410 million to over $1 billion in revenue:

Brand Differentiation: In a saturated market, having a unique value proposition is key. Our client leveraged its organic credentials and commitment to sustainability to stand out.
Supply Chain Optimization: Efficient supply chain management ensured that increased demand could be met without compromising on quality or delivery times.
Customer Engagement: Building on their culture of valuing relationships, we helped our client leverage social media and other digital platforms to engage directly with consumers, building a loyal customer base.
Strategic Partnerships: Forming the right partnerships, whether for distribution, co-branding, or innovation, opened new avenues for growth.
Luck: You can never discount how far a little luck at the right time goes! But this leads me to my favorite quote from the late John Wooden, "Luck is where preparation meets opportunity."

In Conclusion...

Our client's journey from a $400 million plateau to generating over $1 billion in revenue per annum is a vivid illustration of the transformative power of data-driven strategies in the CPG industry. By integrating data analytics with their innate strengths—talented team, strong company culture, and willingness to invest in growth—we unlocked new levels of sales growth, product innovation, and market penetration.

This approach not only propelled them past their revenue plateau but also set a foundation for sustainable growth and a potential lucrative exit. Their success story is a compelling reminder that in the dynamic world of CPG, blending traditional strengths with innovative data insights can turn aspirations into realities, proving that indeed, "Luck is where preparation meets opportunity."