No matter what your role in the food industry, the challenges you’ve faced over the last five or six years are tough to swallow. If you’re a food manufacturer, increasing regulations, rising costs and questions about quality are having a big impact on your bottom line. On the other side, restaurant operators are facing different, but similar challenges – stagnant household incomes are reducing consumer demand while rising minimum wages and food product costs are straining budgets around the world. Neither side can afford to pass on the full costs of doing business or they would be out of business. So, what can be done to mitigate the challenges and drive higher revenue?
Traditionally, food manufacturers have looked at the supply chain as a procurement issue. Now, companies with their eye on long-term success are taking a broader line of attack and looking at product mix, using a holistic approach to manage costs and avoid passing them on to consumers. But determining the optimal mix of products and choosing the right price to charge to maximize your profitability can be very complex. It’s not something you want to leave to ad-hoc analysis, spreadsheets and calculators. To be effective, you need to use analytics, and there are some terrific price and margin optimization tools out there to simplify your efforts. With them, you can easily take bold steps to improve your revenue and profitability:
- Understand what customers really pay for products.
- Improve margins even with volatile input costs.
- Determine optimal deal prices.
- Develop plans for best product mix and capacity utilization.
- Increase sales and trade spend effectiveness.
Using comprehensive mathematical models to process thousands of variables, margin and price optimization software is already enabling leading companies around the world to make smarter product mix and pricing decisions. Why wouldn’t you use all the technology available to you to help your business grow?
Think about industries that have been transformed by technology: travel, music, insurance, banking and more. Food manufacturing is the next in a growing number of businesses where technology can deliver a real competitive advantage. The trend has already started and leading food manufacturers are already seeing the advantage of using margin and price optimization to improve their bottom line. The challenges the food industry faces aren’t going away, and those who continue to rely on the old ways of doing business risk getting left behind.