The traditional brand-led commercial model for consumer packaged goods (CPG) companies is no longer enough to deliver above-market growth. While corporate strategy, category dynamics, and consumer insights remain extremely important to strategic planning, CPG companies today should look first to their retail customer relationships.
This “customer-back” approach is more than a mindset; it is an operating principle. It means designing the commercial model backward from the three key decision points that determine the year with each retail customer: the category story, the joint business plan (JBP), and the joint performance review. It means bringing the customer’s goals and perspectives into planning earlier and more systematically than in the past, aligning insights, investments, and execution around shared, margin-accretive growth opportunities. And it means determining volumes, margins, and ROI in collaboration across the business and with retailers, rather than in internal silos.
Yet in many organizations, the opposite happens. Every capability built over the past decade—including revenue growth management (RGM), category development, e-commerce, and shopper insights—was designed to deliver more value to the retailer. But each layer added internal handoffs, alignment meetings, and coordination loops. The result is a paradox: key account managers and frontline sales can spend around 70% of their time preparing internally for buyer meetings rather than the sales process, and only a fraction of that time is spent in front of the customer. A customer-back organization inverts that ratio inverts: the target is for customer-facing teams to spend roughly 80% of their time with customers, not inside their own building.
In our experience, companies that shift to a customer-back approach realize greater customer relevance, more stable category growth, and more resilient performance. Retailers quickly reward them for bringing insight and credible plans to grow a product category. And according to the Journal of Business Research, category leaders that co-develop plans with retailers deliver two to three times faster volume recovery than those relying on brand-led promotions.
A Difficult Environment for Consumer Goods
The consumer goods industry today needs a structural reset. Volumes are flat, margins are tight, and the pricing levers that carried the last cycle are largely spent: as GlobalData Plc reports, from 2020 to 2024, industry value grew 18% while volume fell 1.4%. Meanwhile, expected shareholder returns continue to decline. In fact, every part of the commercial equation is under strain. (See Exhibit 1.)
Consumer. Inflation and price sensitivity are rising, with 81% of shoppers reporting high concerns about the cost of essentials in 2025. To cope with higher prices, many are trading down: around 30% to 40% of consumers are buying more from discounters and choosing more affordable brands. This shift in value perception has driven sustained outflow from branded products to retailers’ private labels; in fact, inflation and price sensitivity are shaping consumer value perception across categories as never before.
Category. Today, CPG organizations are experiencing category stagnation, driven by factors such as sustained pressure on household budgets, shifts toward simpler diets and health-focused behaviors, and the long-term rise of mission-driven shopping (when consumers purchase brands that support their personal values or causes). Adding to these trends, omnichannel shopping continues to expand, with more CPG sales shifting to e-commerce. Generating demand is therefore becoming more costly due to higher marketing costs and customer- acquisition costs and the rising demands of logistics and fulfilment.
Company. The fast-moving consumer goods (FMCG) sector has underperformed most major industries on shareholder returns for much of the past decade. Growth has been slower, more expensive, and more unpredictable. Many company functions work in silos, creating slow handoffs and disjointed decisions. These functions make plans to their own KPIs and timeframes. The result is a lack of shared direction and coordinated decision making.
Three dynamics keep this internal gravity in place. The first is the use of alignment as risk management. No one wants to put something in front of the buyer that contradicts a colleague, so teams over-iterate internally, while competitors with simpler organizations are already in front of that buyer with a recommendation. The second is inward-looking metrics. RGM optimizes margins, the key account team defends volumes, and category management pushes category metrics. Thus, each function arrives at internal meetings with its own version of “what’s good for us” and too often loses sight of the issue the retailer is really trying to solve. The third is mistaking complexity for sophistication. More category or product specialization does not equal more value for the customer, especially without a clear operating model that defines each role in relation to that customer.
Most CPG companies also have large volumes of data but struggle to connect them. Teams prepare for major meetings by pulling information from scattered systems, work from different definitions and interpretations, and build manual models whose quality can vary significantly. While many organizations have attempted to address these issues by investing in new tools and data platforms, internal adoption remains low because the tools sit outside the natural flow of work, introducing extra steps rather than simplifying decision making. The result is more dashboards, not more alignment.
Another issue is that many companies may have strong functional experts but few leaders who can coordinate their efforts. Teams may therefore face misaligned expectations from leadership and inconsistent support across functions.
Customer. Retailers’ bargaining power is growing. (See Exhibit 2.) The top retailers in many European markets, including the UK, France, and Germany, account for more than two-thirds of FMCG sales, according to our research. This trend creates price exposure risk for manufacturers, especially if their own organizations are scattered across geographies. International retail buying groups have added a new layer of pressure, as prices or terms agreed in one country may be referenced across several others.
Retailers are also becoming markedly more sophisticated. Many now deploy their own AI to scan pricing, promotions, inventory, and demand continuously, compressing category reviews that once took weeks into hours and shifting from reactive to always-on decision making. As consumer needs fragment into micro-segments and brand loyalty becomes fleeting, retailers’ own analytics increasingly rival and sometimes surpass those of their manufacturer partners. The information advantage that once belonged to CPG companies has therefore largely evaporated, and a manufacturer that shows up with siloed inputs rather than an integrated, evidence-based proposal now negotiates from a weaker position.
A Corrective for Our Times
CPG companies can put the system back into balance with an approach in which decisions about volumes, margins, and ROI are made across the business and with retailers. Rather than being structured in siloes where each function optimizes its own P&L line item, a customer-back business organizes around the profit pool it shares with its retailers and around the customer outcomes that contribute to it.
This customer-back approach creates transparency around returns on commercial spending by distinguishing which customers, categories, and initiatives genuinely create value. And it allows both CPG companies and retailers to benefit from value creation through joint planning and execution anchored in a single set of shared information, including a category story that frames the source of mutual growth, business plans that translate that story into committed actions on both sides, and performance tracking that commits each partner to the same scorecard. As a result, decisions are faster and cleaner and commercial actions and value creation more coherently linked.
A true customer-back business also requires rebuilding commercial models. This means shifting from function-driven plans and negotiation-led relationships to systems built on joint priorities and incentives. And it means retraining the “customer muscle” by upskilling account managers, enhancing customer and shopper insights, and working in a more disciplined, transparent, and collaborative way with retailers.
Five Steps to Customer-Back
To create a true customer-back organization, we recommend the following five steps. (See Exhibit 3.)
Build a North Star strategy. Companies should agree on a clear, focused North Star strategy. In a customer-back model, this is expressed by category stories—a shared point of view on who the priority shoppers are, the sources of category growth, and what role each customer plays in capturing that growth. Framed in this way, the North Star becomes a credible, evidence-based growth thesis that retailers can plan against, rather than a brand plan looking for shelf space.
Too many CPG companies still develop their strategy by focusing solely on brands or broad consumer trends. This approach means that customers are not brought into the process until it’s time for the CPG company to present the plans to them, creating an inevitable gap between what the organization wants and what the customer is willing to accept. Yet relying on negotiation pressure or push tactics to get products on the shelf delivers diminishing returns and can even risk product de-listings.
The best path forward is to work with customers to develop transparent relationships that provide a clear view of their economics, shopper behaviors, category roles, and the constraints and trade-offs that shape customer decisions. While CPG organizations already have access to information such as retailers’ sales, inventory, and consumer insights, this effort must go even further.
In parallel, CPG businesses should bring their own deep consumer insights to the table, as the two perspectives will reinforce each other. The customer view refines where and how to act, while the consumer view grounds the size and shape of the opportunity.
Develop a cross-functional commercial backbone. Companies should integrate their commercial elements into a single operational backbone aligned to the North Star. The most effective structure we see is a cross-functional “customer pod” that shows up to the retailer as a single coordinated entity with one story, one plan, and one P&L, not a parade of functional handoffs. Such a pod brings together category development, RGM, sales finance, and supply, with dedicated resources orchestrated by the key account manager. This step demands one integrated customer plan per top retailer and one set of trade-offs, such as pack, price, promotion, assortment, activation, or supply, resolved in a single forum rather than litigated in parallel.
The most practical way to build this backbone is to start from the customer’s calendar rather than the company’s, reverse engineering internal planning cycles so that every function works from the agreed-upon category story, joint business plan, and joint performance review. The customer should structure the calendar, not the other way around—and the pod exists to make sure the organization arrives at each of those moments with a single, prepared, evidence-based position.
The RGM team plays a key role in this process. Because it sits across pricing, promotion, mix, and trade investment, it’s the only function with the line of sight to challenge any team’s version of the story, whether that’s the sales team arguing for deeper promotional support, marketers seeking premium positioning, or the finance team asking for margin protection. By bringing rigor, discipline, and independence to those debates, RGM can force decisions to be grounded in the same data and evaluated against the same joint P&L.
Core activities will remain the same as in the past. These comprise understanding consumer and market signals, choosing where to compete, selecting how to win, executing well, and tracking value. But while these building blocks will be familiar, their level of integration will be new. And since all teams now have the same priorities, the company will be able to increase the impact of every commercial choice when working with customers.
Companies also need to ensure that governance provides clear decision rights and simple escalation paths for issues, so that disagreements are resolved quickly rather than carried into customer conversations.
The most visible change is in the role of the key account manager (KAM). Today, many individual KAMs go into customer meetings carrying competing internal narratives and must pick which version to lead with, often based on what the customer is most likely to accept. In a customer-back model, those trade-offs are resolved inside the cross-functional pod so that KAMs walk in with a single, signed-off position that the organization stands behind—elevated from a negotiator of price to an orchestrator of joint value.
Connect data and decision loops. Companies should build decision loops that connect consumer insights, customer performance, and internal financials to strategy and share the decisions across functions. Within these loops, planning, reviews, and customer discussions will draw from the same definitions and KPIs so that discussions focus on choices rather than data reconciliation. The loops will also strengthen impact tracking, as teams can see clearly what each promotional event delivers, which product packs convert which shopper missions, and where execution can be improved.
Crucially, connected loops can also improve the diagnosis when results don’t match the plan. Instead of debating whose number is correct, teams can move quickly to the “why,” separating volume from mix, price from promotion, distribution gaps from execution gaps, and category headwinds from share losses. With a single source of truth across functions, root causes surface in a matter of days and corrective action can be taken before the next cycle locks in the same mistakes.
These decision loops should extend to customers as well. Sharing performance signals such as retail margins or category sales growth creates a joint understanding of what’s working, which builds trust over time and accelerates decision making. Customer conversations become more forward-looking and grounded in evidence rather than in debates about numbers.
Adopt technology that supports decisions. To underpin their decision loops, companies should establish a harmonized data platform that brings internal, customer, and external data together. In this way, they can create a single commercial view and continue to ensure that teams use the same definitions and KPIs.
The platform should also support the key processes of the integrated business cycle: the points at which teams need to assess options, make key decisions, and prepare joint plans, including price and promotion planning, customer negotiations, category investment decisions, and field execution. And it should allow teams to find patterns in the data that can highlight new product uses or segments with room to grow while allowing teams to generate, test, and scale ideas more quickly.
AI and analytics can help by surfacing signals from large amounts of data, generating and updating scenarios, drafting materials, and recommending actions grounded in consumer needs and customer economics. Such tools can free 20% to 30% of time in commercial roles by removing repetitive preparation work and enabling faster and more consistent decision making. Over time, teams gain confidence in the technology and use it to run tests with customers and learn more quickly.
The next step on this path is agentic AI—tools that don’t just surface insights but take action across the workflow. A single agentic assistant for the account team can consolidate a 360-degree view of the account, monitor performance against plan and flag deviations as they emerge, assemble the first draft of a customer review or JBP from the latest data, run pricing and promo simulations against live retailer constraints, and prepare negotiation scenarios that already include the supporting evidence. Account managers and category teams must remain firmly in control of the decisions, but the preparation, reconciliation, and follow-through that once consumed their week takes place in the background.
A successful implementation results in a meaningful redistribution of time. KAMs, category teams, shopper insight leads, and people in other customer-facing roles spend less time inside the building (pulling data, building decks, or chasing approvals) and more time where the value is created (in stores, joint planning sessions, or conversations with merchants and category buyers). The efficiency gained is not the primary goal; the time saved is reinvested into higher-value customer engagement, so that a 20% to 30% gain in time translates into stronger partnerships and, in our experience, a 1- to 3-percentage-point uplift in annual revenue. The tools are built around workflows rather than functions so that they generate scenarios, insights, pricing logic, and argument summaries and update them in real time or test them live with customers. And because each tool serves a clear purpose in the planning process, the overall stack is simplified.
Embed customer-back into leadership and culture. Companies should support their new commercial agenda by installing talented leaders who understand how retailers think, how decisions are made, and what it takes to shape joint growth plans. These leaders should have held commercial roles in the past and be willing to engage directly with customers, join store walks, and participate in joint reviews, establishing credibility and keeping the organization close to the market.
Note that talent and capabilities matter as much as leadership skills. Successful organizations build top-quality commercial teams in sales, RGM, category management, and analytics. They equip customer-facing teams with the financial acumen and negotiation muscle to co-build value rather than simply defend price. And they invest in capability hubs that support markets with consistent expertise while bridging the global-to-local gap so that standards are applied consistently across markets. Over time, this effort builds a culture in which teams understand customer priorities, adjust quickly when conditions change, and coordinate predictably across functions.
Real Benefits Await
CPG companies that do customer-back right will be willing to balance their own needs with those of their customers, offer transparency and credibility through strong relationship management, and align insights, investments, and execution around shared, margin-accretive growth opportunities. In the strongest cases, customers should come to see a manufacturer’s absence as a competitive disadvantage and invite them earlier into strategic discussions, trusting them with their toughest challenges.
The impact will be visible both internally and externally. Teams will spend less time resolving internal differences and more time shaping moves that matter. Customer conversations will become more strategic because they are built on a coherent internal foundation. And the organization will be able to articulate where joint value can grow, bring evidence to support its ideas, and act quickly when conditions change. Customer-back is the operating principle that decides whether all that hard-won capability is spent in the building or in front of the customer, where it counts.
