Home » Uncovering Hidden Food Industry Growth Pockets
IRI® published insights that revealed short- and long-term growth opportunities for consumer packaged goods companies by identifying and capitalizing on dynamic consumer trends, particularly those that can command a premium in a particular niche. The IRI Point of View, “Winning the CPG Zero-Sum Game by Uncovering Hidden Growth Pockets,” details three potential key strategies — “Buy, Borrow and Build” — for participation in category sub-segments of rapid growth.
“How a company decides to participate in selected growth pockets is highly dependent on overall strategy, existing core competencies, risk appetite and merger and acquisition budget,” said Jamil Satchu, partner and practice leader of Growth Consulting for IRI Strategic Analytics. “Ultimately, the level of attractiveness of a growth pocket will depend on an assessment of external variables, as well as target candidate internal assessment variables.”
IRI identifies three potential key strategies for participation in growth pockets that are significantly outperforming other segments:
1. Acquisition: “Buy” into them
• How the company decides to absorb its acquisition can vary from “full integration” of the target’s capabilities into the organization (changing the target’s brand to that of the company’s), allowing complete independence of the target’s operations (letting it continue to grow organically but under new ownership).
2. Renovation: ”Borrow” ideas and inspiration
• A company may seek to learn from a target candidate to renovate its existing business.
3. Innovation: “Build” them
• A company can choose to build the capabilities directly and thus gain participation into the growth pocket.
Developing a proactive approach to growth is a winning approach. CPG marketers require a proactive, fact-based method to view tired, commoditized categories in a new light to best acquire actionable insight into what drives growth to win with growth pockets.
IRI Growth Consulting has vast experience in successfully partnering with leading CPG manufacturers in leveraging this proactive path to growth. Companies are now able to follow a distinct demand portfolio strategy that will help identify acquisition and inspiration targets through growth platforms. Winning with growth pockets matters, as an accurate understanding of actionable growth opportunities may lead to outsized gains.
“Clearly and accurately defining the universe from which pockets of growth will be derived is critical,” said Connie Chang, principal of Growth Consulting for IRI Strategic Analytics. “If the scope is too narrow, it renders the effort myopic. If the scope is too broad, it becomes difficult to implement and access due to organizational dynamics and the buy-in necessary to creatively pursue adjacencies.”
Check out the June 2020 issue of Prepared Foods, featuring our cover story on creating functional flavors with stocks, bases & sauces, consumers’ appetite for beef and other animal proteins, new dairy and dairy alternative offerings, and much more.