1. Understand your product category
How well do you know your product category? Here are some important questions you should be asking:
– Who are my competitors? These are the product lines most similar to yours or in direct competition with you. If you’re a manufacturer of oat milk products, for example, these would be other oat milk brands. These could also include other non-dairy-based milks such as almond or soy.
– How is my product category performing across the sector? Knowing if your category is growing allows you to accurately predict your product’s future sales. Say you’re in the wellness category with a smoothie product. You would analyze how healthy beverages are performing as a whole to help identify where your opportunities are, as well as any weak spots.
– What products have similar flavors and product characteristics to my assortment? How are they performing? Having this information ensures your product line assortment is meeting customer demand and provides insight into possible line extensions. Has there been a big jump in vanilla-flavored beverages? Or maybe low-fat options are becoming increasingly popular? Knowing what’s selling—or not—is key.
– Are there new product or category trends that could impact my business? Paying close attention to emerging trends and changing consumer preferences is vital for future sales success. Data may reveal that consumers are looking for high-protein, lower-sodium products, allowing you to quickly adapt your product development to align with current market needs.
– In which region will my product perform best? And why? Knowing this ensures your product will appeal to consumers within a geographic area. Shoppers in rural areas might prefer merchandise that is sold in bulk, whereas shoppers in urban areas may choose single-pack sizes.
Having access to the right market intelligence helps you answer these questions and gives you a critical view of your category’s performance and growth opportunities, and what to expect when your new product hits the shelves.
2. Develop your strategic go-to-market plan
Now that you have valuable category information, you can develop a strategic go-to-market plan that will inform your company’s growth and help you reach your sales targets.
What to include in your plan?
Start with your product’s potential growth pattern over time. To increase the accuracy of this process, review the performance data of competing brands over several years. This allows you to forecast your own product’s performance more confidently. Maybe your product is in a high-growth category. Or maybe it takes longer (on average) for products within your category to take off. Either way, you need the right data to know.
Another important piece in the plan is your product’s projected distribution pattern—and using key account data can help. Are there smaller manufacturers entering your product category and ramping up their distribution? Or is your category dominated by well-established brands, which makes distribution more difficult? Analyzing other brands’ distribution patterns can help anticipate and adjust yours.
Having a data-driven go-to-market plan tells retail buyers that you are both serious about their business and well-prepared, increasing the likelihood of getting your product onto their shelves.
3. Know your retail landscape
You have deep knowledge of your product category, check. You have a solid plan that is grounded in current market data, check. What’s still needed to size up the CPG market?
Knowing your retail landscape.
You should know which retailers are performing well, in which markets and categories, and why. To do this, you’ll use metrics such as % ACV that show the distribution of your brand’s products, weighted by the size of the stores that carry the line and the rest of market (ROM). The latter shows a retailer’s competition in a given geographic area, what products they carry, and how they’re performing.
Let’s say you identify a retailer that actively promotes sustainable products. If you access retail market data, you can determine whether that retailer actually sells more sustainable products than other retailers within their market. Is % ACV higher for sustainable products at that target retailer? Does ROM reveal any gap in its offering?
Analyzing the retail landscape helps you determine on which retailers to focus and prioritize for a successful and profitable distribution strategy. Using the most current data will help you size up the CPG market more accurately and efficiently in today’s crowded and competitive shopping climate, instead of just hoping for the best.