Company Case Study #2 (return to index)

The Company:

The Consumer Packaged Goods (CPG) division of the largest publicly traded food processing company in Canada.

The Challenge:

• Despite annual revenues of $160 million, its own manufacturing facilities and a plethora of brands, the CPG/grocery business was losing money.

The Solution:

1. Developed a clear strategy to focus on core competencies and grow those business segments with identifiable competitive advantages (e.g. strong brand name; unique product advantages; product range with greatest leverage).
2. Attracted an outstanding management team, set targets and assigned specific deliverables with accountability to each senior manager.
3. Acted decisively to:
   • reduce the number of stock keeping units (SKUs) from 400 to 100
   • exit unprofitable lines of business with low growth potential via sale or discontinuation ( dry cereals , bakery mixes)
   • expand core categories via innovative product extension, refreshed marketing (e.g. flavoured deli-style canned luncheon meats; innovative frozen tarts and pie shell marketing ).

The Result:

In an 18 month period:

• Improved gross margin from sub- 30% to 36%
• Reduced the capital employed in the business by 70%.
• Improved earnings from a loss of $2 million to profit of $3.5 million.