Revenue Growth Management Helps CPG’s Battle Inflation

December 05, 2023 | Consumer Goods

Consumer goods companies in the Middle East and Africa region have faced no shortage of challenges in recent years. From supply chain disruptions to inflationary pressures, the operating environment has rapidly shifted in unpredictable ways. As consumer demand evolves and economic uncertainty persists, leaders must rethink traditional approaches to driving revenue growth.

Now more than ever, CPG companies need agile strategies to optimize profits. However, they must still keep providing value to cost-conscious consumers. Only taking a holistic approach to revenue growth management can help CPGs navigate these turbulent times.

This article will explore best practices for tackling modern and complex market dynamics. We'll examine creative tactics to manage pricing, promotions, distribution, and more. Should you ever need the expertise of a consultant, Ollen Group is here to support you through the process.

What is Revenue Growth Management?

Revenue growth management (RGM) refers to the strategic optimization of factors impacting profitable top-line growth. This involves coordinating:

  • Pricing
  • Promotions
  • Product assortment
  • Sales channel mix
  • Trade marketing.

The goal is to maximize returns across both the short-term and long-term. RGM leverages statistical modeling and analytics to forecast market response. By understanding price elasticity and consumer demand signals, companies can tailor pricing and packaging strategies.

For CPG companies, RGM provides a framework for growing revenue in a disciplined way. Rather than ad hoc discounting or reactive moves, RGM takes a planned, forward-looking approach. The impact can be significant with the right analytics capabilities and organizational alignment.

Consumer products consulting firms like Ollen Group offer specialized expertise to build these capabilities tailored to regional dynamics. With an effective RGM strategy, CPGs gain resilience to navigate unpredictable conditions.

Seizing the Leadership Moment

This represents a pivotal moment for CPG leaders to guide their organizations confidently into the future. By taking an active role in revenue growth management decisions, executives can ensure their companies' resilience.

RGM leaders must balance both short-term and long-term objectives. They must also establish key performance indicators tailored to their product categories and sales channels. For instance, they may need to prioritize immediate cost control while also investing in digital capabilities for omnichannel growth.

For CPGs in the Middle East and Africa region, RGM leaders should focus on capturing available opportunities for expansion. With a youthful population and growing middle class, the underlying demand outlook remains strong. This is especially true in Saudi Arabia, where over 60% of the population is under the age of 30. These consumers also expect value for their money amidst inflationary pressures.

Making Bold Moves

To fully leverage the potential of revenue growth management, CPG leaders must be willing to make bold strategic moves. While risks are involved, fortune often favors the bold in the face of disruption.

Each company will have unique opportunities based on its product portfolio, channel mix, and competitive landscape. However, there are some proven tactics to consider:

  • Rethink pricing architecture to balance affordability and profits. For example, offer smaller pack sizes at entry-level price points.
  • Optimize promotions spending based on campaign profitability analytics. Identify the most effective marketing channels and partnerships.
  • Double down on the fastest-growing categories and hero products aligned with consumer demand shifts. Prioritize resources to support their success.
  • Develop solutions to capture e-commerce growth, such as D2C options or modern trade partnerships. But don't neglect traditional trade channels still dominant in the region.
  • Stop excessive discounting that erodes brand value. Use promotions selectively to attract new buyers rather than give away margin.
  • Simplify product portfolios and SKUs to reduce costs and inventory risk. But allow "good complexity" where higher margin additions exist.
  • Update packaging designs and formulations for affordability. Consider sachet options popular among low-income consumers.

RGM-led initiatives may meet internal resistance, especially from sales teams. However, cross-functional buy-in can be cultivated through incentives and demonstrating quick wins. The long-term payoff from wise, bold moves is worth the temporary discomfort.

Transforming the Organization

Implementing a bold revenue growth management strategy requires organizational transformation.

First, companies must develop the talent and technology infrastructure for advanced analytics. Data science skills are crucial for modeling, forecasting, and optimization. Remember that consultants can provide interim analytical support. Cloud-based tools also allow for scalable implementation without massive upfront IT costs.

Next, business processes must be redesigned to support RGM. Cross-functional collaboration is essential, with finance, sales, marketing, and operations aligned around revenue goals. KPIs and incentives should tie into RGM performance at every level.

Transforming a legacy organization to fully embrace RGM takes time, often 18-24 months. But, with an incremental approach and sustained commitment, CPGs will gain a lasting competitive advantage.

Elevating Retailer Relationships

Given shifting channel dynamics and consolidation of retail power, CPGs need stronger collaboration with key retailer partners now more than ever. Revenue growth management provides a framework for creating joint value.

Pricing and promotion decisions have ripple effects across the entire supply chain. As such, CPGs and retailers must work together to optimize consumer value. This requires sharing data-driven insights on shopper behavior and developing aligned strategies.

In the Middle East and Africa, modern trade is rapidly gaining ground over traditional channels. CPGs should develop win-win relationships with major retail chains to capitalize on this trend. Tactics like exclusive product variants and targeted promotions help drive shopper traffic that benefits both parties.

Overall, RGM gives CPGs the confidence and analytical capabilities to negotiate revenue-sharing models fairly. This balances reasonable margin expectations against the need for affordability during inflation. Maintaining trust and transparency with retail partners sustains collaboration.

Focusing on Strategic Markets

Finally, CPGs should tailor strategies to focus on the most lucrative and high-potential consumer markets. Factors like population youthfulness, expanding middle classes, and urbanization drive a positive outlook. However, countries have important differences based on economic conditions, competitive forces, channel landscape, and consumer values.

Take Saudi Arabia, for example. It represents a prime market with higher disposable incomes than other nations in the region. CPGs may emphasize premium offerings and niche category expansions there. In contrast, CPGs entering Egypt must focus on affordability and accessibility for lower-income consumers.

Speaking of Saudi Arabia, an interesting case study of the major consumer goods company Almarai demonstrates how entering new geographical markets can drive revenue growth. Almarai, the leading dairy producer in the Gulf region, intends to grow its activities in strategic markets like Egypt, Jordan, and the UAE. This includes increasing the capacity of its dairy facility in the UAE to 200 million liters and striving to increase investments in Egypt and Jordan. By expanding operations and tailoring its offerings and marketing to these countries' consumer demographics and channel landscapes, Almarai can tap into new sources of profitability.

Within strategic priority markets, allocating resources to the highest potential cities or regions maximizes returns. In Nigeria, targeting the megacities of Lagos and Kano first allows for localized brand building. Digital analytics also enables micro-segmentation to niche consumer cohorts.

CPGs should also monitor pilot initiatives in one country for scalability across similar markets. Local partnerships provide the consumer and channel insights necessary to adapt strategies. Revenue growth management fuelled by data synthesizes macro trends with grassroots nuance.


In today's disruptive environment, CPGs must take a holistic approach to revenue growth management to thrive. RGM aligns all functions around profitable growth. The journey requires boldness and commitment, but the payoff is worth it. By leveraging analytics and optimizing pricing, promotions, partnerships, and focus, CPGs gain an advantage.

As a leading consultancy in the region, Ollen Group helps clients successfully implement RGM transformations. Our experts turn disruption into opportunity.

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