It’s critical for food and beverage businesses of all shapes and sizes to continuously assess whether their product assortments resonate with consumers. Be it a small artisan operation or a massive multicategory retailer, companies need to make sure their products hit the mark for maximum profitability and sell-through. To do this, it’s best to employ an optimized product portfolio management and retail assortment plan to ensure maximum sales performance.
But wait, what is product portfolio management? And how can a Product Lifecycle Management (PLM) solution help business decision makers improve upon it? Read on, we’ve got you covered!
What is Product Portfolio Management?
Product portfolio management is an ongoing, data-driven process that allows retailers and manufacturers to decide whether certain products should stay or go, increase or decrease in cost, or require updating to meet consumers’ changing tastes and new market interests. For example, companies can update existing products to align with seasonal or holiday-themed trends in order to boost product margins and drive sales across regions and channels.
Retailers undergo a similar process, optimizing product assortments to drive business growth, increase new product introduction success and support private label development.
To do this, it’s important for product portfolio managers to first ask these questions:
– Among all SKUs, which ones rank as most profitable?
– Can successful products be relocated or rebranded for new markets?
– Should we introduce a new product to fill a gap in our existing range?
– How much should these products cost?
– What’s the best way to adapt products to different seasons, holidays and/or regions?
– Do our products comply with regional regulatory requirements?
– Are our product claims valid and up-to-date?
Ultimately, those answers will help teams decide if a product optimization is in order, be it through an update, modification or discontinuation.
Perfecting Your Product Portfolio Management
Effective product portfolio management involves a lot of number crunching. Sales performance data, projections, price points and margin analyses are crucial in determining whether one’s current product assortments are meeting the needs of target consumers. On top of that, decision makers also need access to other pertinent forms of product information, like product and packaging visuals, ingredients and formulation data, target markets and comparable market competition to help paint a clearer picture of a product’s value within that existing range.
Product Portfolio Management Software
To optimize product portfolios effectively on a large scale, food and beverage brands, producers and retailers should employ product portfolio management software that provides a fully visible, comprehensive overview of the entire product development process, from concept to consumer. This gives product portfolio managers and assortment planners critical, up-to-date information they need to address fundamental decisions.
For many food and beverage companies, this software should come in the form of a Product Lifecycle Management (PLM) solution, which provides the visibility, reporting, analyses and connectivity necessary to drive cross-team collaboration and make more informed decisions on whether a product has positive impact on profits and long-term success.
Scale Up Product Assortment Planning with PLM
Food and beverage retailers turn to PLM software get a broad overview of the product mix. This includes identifying overlaps and potential holes in the product portfolio and tweaking assortments to increase new product introduction success, giving teams a crystal-clear view of top performing items. Decision makers can then align executive, top-level views with financial and operational targets per season to ultimately reduce time to market, enhance inventory management, optimize inventory returns, maximize price per square foot and finalize a solid, realistic financial plan.
A digital PLM solution equipped with key portfolio management and assortment planning capabilities also exists as a single actionable source of truth for all parties involved in product development. This allows users to collaborate and communicate in real time using a shared set of data, which helps eliminate redundancies and ensure accuracy. Teams can leverage PLM’s cloud-based ecosystem as well, giving them 100% visibility across the product lifecycle to establish more tenable targets, track progress against seasonal plans and identify poorly performing items in the bunch. Better yet, digital PLM solutions give Merchandising and Product Development teams the ability to design strategic product offers, run “what-if” costing scenarios, calculate the impact of cost on product margins and align assortment strategies with financial goals.
For retailers working with suppliers on private label development, they too can employ PLM solutions to drive digital collaboration and data-driven product analyses. These insights can then be shared directly with R&D, Procurement and Merchandising teams to streamline RFQ management, optimize product development and enhance assortment planning.
Get a Handle on Complex Product Portfolios
For food producers, national brands and multicategory retailers working alongside suppliers to develop private label products, a PLM solution with effective product portfolio management capabilities helps to plan, optimize and manage complex product portfolios that can be quickly adapted to meet consumer demand.
With clear visibility into product and sales data, teams get a fully contextualized view of the overall product mix, making it a cinch to identify popular base products prime for variation. Take, for example, holiday chocolates. Brands can take existing recipe formulations and simply repackage products to match seasonal trends. Now there’s no need to reformulate; just reskin chocolate packaging to reflect whatever season’s in vogue. Whether it’s Christmas, Valentine’s Day, Halloween or Easter, brands can use the same basic chocolate formulation across the board. Similarly, brands can reformulate base recipes to offer alternative options for allergy-prone or health-conscious consumers, like gluten-free or low sugar variations.
Leave Those Data Siloes Behind
For those food and drink companies wanting to expand into new markets and geographies, product portfolio management is key. However, without a PLM solution in place to provide holistic visibility across the product development chain, data management becomes a siloed and complex process, resulting in duplications, redundancies and erroneous information.
A centralized PLM platform makes it easy to successfully manage large product portfolios, eliminate barriers between regional and departmental teams, define local market commercial offers and adapt labelling, language, copy, artwork and nutrition information to meet regional and regulatory requirements.
Overall, using a collaborative platform like PLM gives decision makers a much clearer picture of the entire product portfolio, which empowers them to identify opportunities for product optimization, successful new product introductions and bigger sales.