In today's rapidly changing retail environment, European consumer packaged goods (CPG) companies are facing unprecedented challenges. To stay ahead, these businesses must embrace commercial excellence by focusing on four key areas: simplifying product portfolios, excelling in international modern trade, optimizing outlet execution across channels, and digitalizing route-to-market models. According to McKinsey’s 2024 Growth Capability Excellence (GCE) Survey, top-performing CPG firms have successfully leveraged these strategies to achieve remarkable growth and market share gains. This article explores how adopting these best practices can provide a competitive edge and drive sustainable success in the European market.
The first pillar of commercial excellence involves streamlining product offerings. By creating a simplified, focused, and shopper-centric portfolio, CPG companies can reduce operational complexity while enhancing their ability to meet specific consumer needs. This approach not only improves efficiency but also allows businesses to concentrate resources on high-performing products that drive profitability. For instance, utilizing real-time consumer insights helps tailor product lines to better align with market demands, fostering brand loyalty and differentiation.
Moreover, the evolution of the European retail landscape necessitates new strategies for managing relationships with major retailers. As modern trade becomes increasingly internationalized, CPG companies must adapt their key account management practices. Advanced tools and technologies play a crucial role in this transformation, enabling more effective customer relationship management and driving business growth. Retail media activation, for example, is becoming an essential component of omnichannel marketing efforts, offering deeper insights into consumer behavior and preferences.
Excelling in outlet execution across various channels is another critical factor in achieving commercial excellence. Leading CPG companies leverage data analytics and geospatial analysis to segment stores based on enriched data sources. This allows them to tailor field sales visits and optimize merchandising execution, ensuring that promotional activities align with store performance and consumer profiles. By harnessing digital tools, these firms enhance in-store sales execution and differentiate service levels according to outlet segments, maximizing both volume and value.
Finally, digitalizing route-to-market models in fragmented trade presents significant opportunities for CPG companies. Adopting an omnichannel approach enables businesses to reach underserved markets more efficiently, improve service levels, and unlock new revenue streams. eB2B platforms, in particular, offer integrated solutions that simplify the sale and acquisition of products for resale, providing real-time data and analytics to inform decision-making. While challenges persist, especially in the away-from-home channel, embracing these innovations can help CPG companies navigate the complexities of the European market and achieve sustained growth.
Ultimately, the adoption of commercial excellence best practices offers a clear path to success for European CPG companies. By focusing on simplifying product portfolios, excelling in international modern trade, optimizing outlet execution, and digitalizing route-to-market models, these businesses can build a competitive advantage and thrive in an ever-evolving retail environment. The GCE survey underscores the importance of continuous improvement and strategic alignment, highlighting the potential for substantial gains in profitability and market share for those who lead the way in commercial excellence.