At a time when consumers are financially stretched, pessimistic about their current conditions, and uncertain about the future, consumer goods companies around the world say their chief concern is growth. In this environment, European shoppers are focusing on essentials and bargain hunting, while US shoppers had become more careful with their spending even before the current global economic uncertainty.
Growth is now a challenge for consumer goods companies because they have built their successful strategies since 2022 on higher prices and premiumization (trading up), but without changing the underlying value proposition. Continuing to raise prices becomes a riskier approach, however, when consumers are responding to economic uncertainty by trading down within product categories, buying less often, or switching to online, club, or mass merchandise channels in search of better price-value relationships.
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That’s why companies will need to shift the bias of their revenue growth management (RGM) strategies from higher profits and productivity to higher volume and market share. Instead of pursuing price increases with minimal or manageable reductions in volume, they now need to pursue higher volumes with minimal or manageable changes in price.
Companies must shift the bias of their revenue growth management strategies from higher profits and productivity to higher volume and market share.
To make this happen, RGM teams must serve as the connective tissue between sales, which has a deep view of the retail partners, and marketing, which has deep insights into shoppers. Specifically, companies must learn to do three things. First, they must learn how to win more critical shopper missions and occasions and then rethink how they allocate resources to various demand levers. Second, they need to collaborate across sales, marketing, and other functions under strong RGM influence. That means they must change their ways of working to align pack-price architecture, sales, and promotions with broader demand levers such as branding and marketing mix modeling. This will allow the organization to adjust its portfolios to focus on winning the highest-priority consumption occasions and shopping missions. Third, companies must rebuild their existing infrastructure on AI-enabled tools to capitalize on enhanced customer centricity and to support integrated ways of working. Automated processes and digital tools will allow organizations to respond rapidly and fluidly as growth opportunities emerge or weaken.
Most companies know what each of these imperatives requires in theory, but few have implemented all three of them in an integrated way at scale. Those that succeed in that effort will not only improve their chances of meeting short-term growth expectations but also leave themselves in a stronger and more flexible financial and commercial position when consumer sentiment improves. They will also have built a stronger analytical foundation for detecting future shifts in consumer behavior and responding swiftly to them.
Imperative 1: Learn how to win more critical shopper missions and occasions. It is no longer sufficient for sales, marketing, and RGM teams to rely primarily on insights drawn from consumption data. A volume-led growth strategy succeeds when companies pinpoint the missions and occasions where their brands have a credible right to win or defend. This includes identifying emerging and sometimes smaller, less obvious consumer needs in both core and adjacent categories where they can deepen market penetration and increase purchase frequency.
RGM helps turn those deeper insights about missions and occasions into actions. Companies win over shoppers from competitors by prioritizing those North Star opportunities in core and adjacent categories, channeling resources to them, and offering better value propositions to price-sensitive consumers. They target those occasions by adjusting list prices, price per unit of measure, and pack sizes, rather than by bluntly lowering prices to gain share.
This alignment, in turn, comes from having superior knowledge of who shoppers are, what occasions they want to satisfy, and how they shop to meet those needs. Companies need to de-average their prices and ensure that their promotional strategies profitably support the new objective of volume-based growth.
Imperative 2: Collaborate across sales, marketing, and other functions under strong RGM influence. Winning in today’s challenging growth environment requires the breakdown of traditional silos as well as coordinated investment across RGM, sales, and marketing teams. These teams, in turn, need a shared understanding of the objectives of these investments and their ROI. Without this integration of capabilities, the company risks misallocating resources and diluting the impact of otherwise promising measures.
When sales, marketing, and RGM have a shared agenda to win target occasions, their collaboration enables more effective deployment of demand levers, clearer trade-off management, and cohesive execution across the organization. RGM orchestrates and supports this integration by continuously screening the market and connecting various demand levers so that the organization doesn’t rely primarily on price.
Achieving this depth and breadth of collaboration can be a challenge, because commercial
functions in consumer goods companies tend to optimize their activities in isolation rather than jointly. The lack of cohesive strategy and a single source of truth creates friction that can keep the organization from identifying the clearest opportunities and homing in on them.
Imperative 3: Rebuild the existing infrastructure on AI-enabled tools. Consumers are changing faster than companies can understand with conventional means. Supporting a volume-led growth strategy requires enhanced customer centricity, de-averaged prices, tighter scrutiny of how promotions perform, and much faster review and response times. Manual processes that once supported periodic reviews and refreshes with incremental changes are now too slow, reactive, and incomplete to provide such support.
An infrastructure rebuilt on AI and GenAI tools is essential for next-generation RGM, because those tools can enable the team to track subtle signals from the market and identify opportunities automatically in real time. Specifically, a dynamic and automated “always on” RGM system—integrated with other functions and attuned to detect signals of even slight shifts in customer behavior—can read and react to size and prioritize growth opportunities. This lets companies refresh or adjust sales, marketing, and promotional tactics on a moment’s notice to seize new opportunities or move away from ones that no longer require the same level of resource commitment. These systems leapfrog previous best-in-class tactics and can help organizations gain confidence in the implementation of the volume-led growth strategy.
The reduced manual effort allows the RGM function to focus on strategic decisions rather than data wrangling. AI-based processes and advanced analytical tools will empower team members rather than replace them, because alignment and coordination remain paramount. Having the right pack size and price is no longer enough. Success depends on having a cohesive promotion strategy, marketing approach, and sales enablement. The organization will be identifying value, making informed tradeoffs, and investing its resources effectively and efficiently.
Having the right pack size and price is no longer enough. Success depends on having a cohesive promotion strategy, marketing approach, and sales enablement.
The three imperatives apply to a volume-led growth strategy that current underlying market shifts require. But ultimately, the rebuilding prepares an organization to implement any growth strategy by keeping value, capabilities, and AI tools strong, balanced, and in harmony through RGM orchestration.
By committing to RGM excellence at scale, consumer goods companies can hardwire the tools and the habits that will allow them to meet short-term growth expectations and also prepare to apply the “growth algorithm” in any way that will best serve the organization in the future. When consumer sentiment improves and people start to spend more, the bias may shift back to price increases and premiumization instead of volume growth. In the meantime, companies have an opportunity to redirect their resources to win over price-sensitive consumers, build an integrated organization around customer centricity, and retool to move away from legacy approaches.
