08 Apr, 2024

The crucial role of financial insight in food business decision making

Having a clear understanding of your food business’ finances is critical to effective decision making. Many companies do not have an accurate understanding of their margins and product performance.

You might be wondering why this matters, but this lack of insight means management is making decisions in the dark, eroding potential profits without even realising it. We have seen first-hand the importance of regular commercial analysis and the value it can add to a business.

Below, we delve into 3 key pieces of analysis we recommend as part of a commercial review for a food producer.

  1. Competitive landscape review: Reviewing the competitive landscape is a common activity in the retail industry. Retailers and suppliers do this weekly. By conducting a competitive landscape review, you will identify direct and indirect competitors and understand their strengths, weaknesses, and the wider market dynamics. When working with clients on a competitive landscape review, we provide objective key areas to improve their turnover and profitability. This review can also present opportunities for innovation based on market trends and gap analysis.

  2. SKU level category review: Taking the time to analyse sales and the key commercial data of all SKUs in your product range can provide valuable insights into stocking and performance. In a recent project, we reviewed more than 120 items across 5 retailers. More than 60 recommendations were provided to increase profitability and turnover, including delists, price changes and new product formats and flavours.

  3. Development of a financial dashboard: Developing an effective tool can improve financial oversight of the business. The financial dashboard provides a detailed analysis of monthly sales and key drivers of performance in a clear and digestible format and can be tailored to your individual business needs. For example, a financial dashboard can contain a summary of monthly performance as well as sales broken down by customer and the private label/brand split. A dashboard allows senior management to monitor business sales and performance efficiently and to quickly identify areas that need further investigation.

Our expert team also advise start-ups and companies launching new products to gain a clear understanding of costs from the beginning. Being informed from the start allows you to hit the ground running and make informed decisions with confidence.

Another valuable tool is to create cost calculators to ensure meticulous costing before the retail launch. These calculators can make a huge impact, with the calculator breaking down each cost involved in creating and getting the product on the shelf. This enables the identification of a selling price that will generate a true profit for the business.

If you're curious about how implementing effective commercial analysis could help your business, our team are here to help.