The Future of CPG Revenue Growth Management: Strategies for Sustainable Success

Consumer packaged goods (CPG) companies face constant challenges: inflation, shifting consumer preferences, and an ever-changing retail environment.

CPG revenue growth management (RGM) is the answer to maintaining profitability while driving sustainable expansion.

Brands that optimize their pricing, promotions, and portfolio strategy see significant financial gains.

According to McKinsey, companies that excel in revenue growth management (RGM) typically achieve a 4-7% gain in annualized gross margins, emphasizing the financial impact of effective RGM strategies.

Additionally, Deloitte’s analysis suggests that strategic RGM can generate benefits equal to 3-5% of gross profit annually, highlighting its potential for both top-line growth and margin optimization.

Yet, many companies struggle to execute these strategies effectively. Let’s break down how RGM is shaping the future of the CPG business and what brands need to do to stay ahead.

What is revenue growth management in CPG?

Revenue management in the CPG industry is about making data-driven decisions across pricing, promotions, assortment, and customer segmentation to maximize profitability.

It’s not just about raising prices; it’s about optimizing trade spending, product mix, and distribution to ensure that every dollar works harder.

A strong CPG revenue growth management strategy balances volume and margin, leveraging tools like CPG analytics and AI revenue management to predict demand, improve efficiency, and drive better outcomes.

CPG revenue growth management examples

Leading CPG brands have demonstrated the power of RGM with strategic adjustments:

According to Bain’s consumer product report, Kraft Heinz’s Philadelphia achieved 4% year-over-year sales growth in the US during the first nine months of 2024.

This growth was likely supported by effective marketing and sales strategies, which are key components of RGM.

Beiersdorf’s Nivea recorded 9% organic sales growth in Germany during the first half of 2024. This success could be attributed to targeted marketing and product positioning, which are essential for effective RGM.

Mars and AB InBev: Mars expanded from pet food into pet services, while AB InBev leveraged its distribution networks to create new B2B revenue streams.

These strategic moves reflect a broader approach to RGM by expanding into new profit pools.

Strategy& reports that many CPG companies are focusing on optimizing their price-pack architecture to drive range optimization and premiumization.

The use of advanced technologies like Generative AI (GenAI) is becoming crucial for evolving RGM capabilities in CPG companies. This helps in making data-driven decisions and improving commercial outcomes.

Companies are adopting a holistic approach to RGM by leveraging a mix of revenue growth levers, including pricing, promotions, assortment, and trade investment.

This approach is essential for navigating the complexities of the CPG sector.

Key pillars of RGM in CPG

Pricing optimization strategies

Effective CPG pricing strategies require a mix of price elasticity analysis, competitive benchmarking, and consumer behavior insights.

Dynamic pricing models and AI-powered revenue management marketing tools help brands adjust pricing in real-time based on demand fluctuations.

Promotional effectiveness and trade spend management

With trade spend consuming up to 20% of revenue for many CPG brands, optimizing promotional investments is crucial.

Advanced CPG analytics can pinpoint which promotions drive true incremental sales versus those that simply shift purchases forward.

Assortment and portfolio strategy

Product variety is important, but too many SKUs create inefficiencies. Smart CPG brand management involves streamlining assortments to focus on high-margin, high-velocity items while maintaining innovation.

Channel and customer segmentation

Not all retail and distribution channels should be treated the same. CPG growth comes from aligning the right product with the right retailer and consumer demographic. AI-powered segmentation models help tailor pricing, promotions, and inventory strategies for different markets.

Leveraging data and AI for RGM

AI revenue management is transforming the way CPG brands make decisions. AI-driven analytics improve forecasting accuracy, detect pricing trends, and identify optimal trade spend allocations.

By integrating machine learning into CPG business strategies, brands gain real-time visibility into market shifts.

Companies that invest in AI-powered CPG branding and data tools are seeing faster decision-making, reduced waste, and more precise revenue forecasting. This technology is no longer optional—it’s a competitive necessity.

Challenges in CPG revenue growth management

Despite its benefits, RGM comes with hurdles:

• Data silos: Many companies struggle with fragmented data sources, making it difficult to gain a unified view of performance.
• Retailer resistance: Price changes and promotion adjustments can strain retailer relationships if not executed collaboratively.
• Execution complexity: Aligning pricing, trade spend, and assortment strategies across multiple markets requires sophisticated analytics and cross-functional coordination.

However, brands that prioritize investment in technology and data integration are overcoming these challenges to unlock sustainable CPG sales growth.

Future trends in RGM for CPG brands

The next wave of CPG revenue growth management will be driven by:

• Personalized pricing models: AI-driven tools will enable brands to tailor pricing dynamically based on consumer purchasing behaviors.
• Predictive trade spend optimization: Advanced algorithms will enhance forecasting, ensuring promotions drive true incremental gains.
• E-commerce-driven pricing strategies: As online sales grow, digital-first RGM tactics will become increasingly important.

To stay competitive, CPG brands must embrace AI-powered revenue management marketing and real-time analytics to make more informed, faster decisions.

Take control of your revenue strategy

Effective CPG revenue growth management is no longer optional—it’s a must-have strategy for long-term success.

Investing in AI revenue management tools and data-driven decision-making can unlock higher profitability and CPG growth in a competitive market.