Performance improvement for consumer goods excellence

By Thorsten de Boer, Benedikt Rickmers, Richard Federowski, Ulf Rieckhoff and Nicolas Wüthrich

In an era marked by rapid changes and evolving consumer demands, businesses in Europe are again on the brink of a transformative decade. Companies face a myriad of challenges, from external macroeconomic uncertainties to internal inefficiencies. Revenue, profit, and liquidity are increasingly under pressure. To thrive, they must embrace resilient transformation strategies that address these multifaceted issues and free up resources.

Macro-economic factors and increasing costs

Europe is poised for a decade of transformation, driven by a complex landscape of external influences and macroeconomic uncertainties. Geopolitical, economic and regulation factors and increasing costs as well as labor shortage are reshaping the business environment with new requirements, laws, expectations, and needs.

Consumers are raising expectations, but limited purchasing power

Consumer behavior is undergoing the next significant shifts, with increasing emphasis on regionality, health, and personalization. While consumers seek for more specialized and customized products, services and for experiential entertaining commerce, their purchasing power is under pressure, and their price sensitivity is high – A challenging market dynamic results and leads to increasing go-to-market complexity and brand as well as assortment challenges.

Structural changes and internal efficiencies

Internally, companies must resolve inefficiencies and push stronger for necessary changes, such as structural adjustments, process optimization and redesign or efficiencies through automation and AI. The pressure to innovate and stay competitive is higher than ever.

Companies need to finance growth, innovation, and transformation, which requires sustainable safeguarding and enhancement of profitability. This challenge affects companies especially in the consumer goods and retail sector as the market tailwind is missing in many cases – from large corporations to mid-sized businesses and portfolio companies of private equity investors.

However, we observe that most short-term internal programs fail to deliver lasting results. A holistic transformation approach is essential to sustainably address these challenges comprehensively. Our holistic approach is modular in structure, allowing for flexible adaptation to the individual needs of our customers.

Components of holistic transformations

It is not the pure cost down within the status quo, especially as the easy lifts have been taken. The success of a sustainable performance optimization is a holistic program combining a real transformation of the company with tangible and measurable efficiency measures along the entire P&L:

• Commercial excellence: Streamline and refine your product offerings and go-to-market approach including adjusted pricing and promotion strategies to meet market demands
• Procurement and sourcing excellence: Ensure a price-value optimized procurement with needed qualities, volumes and flexibility to secure supply utilizing the connected production capacities. Invest in end-to-end steering and integrated real time planning as well as partnerships
• Operational excellence: Achieve lasting increases in operational efficiency and production footprint. Be data and performance driven, use new technologies to unlock potential and create a consumer centric operating model
• Secure supply chain: Make sure to have a reliable and resilient supply chain to mitigate risks with robust contracts, a diversified regional set-up and partnerships supporting your business goals
• G&A: Invest in optimized structures and processes, and in particular invest in automation and AI potentials to reduce manual tasks, increase transparency and decrease G&A costs continuously
• CapEX and working capital: Prioritize and reduce non-essential capital expenditures, optimize inventory through better forecasting and optimized stock requirements or improve payment terms

Ready to act? We are ready to talk! Contact our team to see how we can realize lasting transformation for your business.

Register now for our newsletter and get regular insights into Consumer Goods & Retail topics.