Six Ways to Increase Profitability for CPG Brands

This guide outlines six strategies for consumer packaged goods (CPG) brands to enhance profitability. The first strategy emphasizes the importance of identifying and focusing on the most profitable products, ensuring healthy margins from the outset. The second strategy involves breaking down margins and profits by sales channel, as different channels incur varying costs, which can affect overall performance. The third strategy highlights the necessity of regularly reviewing cost of goods sold (COGS) and supply chain costs, as these factors can fluctuate. The fourth strategy discusses the significance of charting the cash conversion cycle and planning around it to manage cash flow effectively. The fifth strategy advises on making informed debt and fundraising choices, stressing the importance of understanding costs and timing. Lastly, the guide underscores the value of inventory management as a critical asset for CPG brands.