A leading food manufacturer was making every sales and volume number the board asked for — and watching its operating profit slide anyway. The culprit was the promo calendar, run on gut feel. We made every deal show its real bottom line before it was signed.
Management called us in after an uncomfortable pattern: the company kept hitting its sales and volume targets, and its operating profit was eroding sharply all the same.
The damage was in the trade calendar. The commercial team signed aggressive promotions with the retail-chain buyers — the classic “two for a round number” deal — with no way to calculate, in the moment, the real impact on the bottom line once production, logistics and chain fees were counted. So promos went out that lost money, and richer premium products got cannibalised by their own cheaper siblings.
And the numbers only arrived in hindsight. Analysts spent weeks pulling till data from the chains just to discover, after the fact, that a given campaign had lost money or eaten a more profitable line. Worse, the commercial data never reached the plant — so when a promo did land, production hadn't been ramped, and the shelves went empty at the exact peak of demand.
Fully-loaded costs, a simulation before the deal, and a floor the margin can't cross.
We connected the company's internal systems — ERP, production and distribution costs — with the real sales data from the chains' tills and market indices, into a single revenue-growth-management view.
An engine models the price elasticity of every SKU in every chain, and forecasts up front how many units a promotion will move and what the company's true net profit on it will actually be.
Instead of approving a promo over email, the trade manager enters the offer. If it drags gross margin below a preset floor, the system blocks it and proposes a more profitable alternative — a different pack, or tiered pricing.
Every deal is costed with production, logistics and chain fees included, so a big volume number is never mistaken for a healthy one — and cannibalisation of premium lines shows up before it happens, not after.
The demand forecast feeds straight to the plant, so a promo that's going to land is produced ahead of time — and the shelves stay full exactly when the campaign is working.
The team still owns the relationship and signs the deal with the buyer. The system just makes sure the number on the table is the real one — freeing the analysts from weeks of spreadsheets.
Fewer promotions, better ones.
Proactively stopping loss-making promotions and steering spend toward value-generating ones lifted the company's overall gross profitability by about 3% — without giving up the volume targets.
Building a trade and pricing plan for the chains fell from weeks of tangled spreadsheets to a few minutes of accurate simulation — and demand-forecast accuracy rose 15% before big campaigns, ending the empty-shelf problem at peak.
The win came from refusing to separate the promo from its real cost, and from a hard margin floor that blocks a loss-making deal before it's signed — the same guardrail-first discipline behind our retail dynamic-pricing work, where a hard floor stops any loss-making promotion at the till. The commercial team still negotiates every deal; the system just makes sure the number is honest before they do.
Reef TRH