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1. Getting to a World
Class Trade Capability
Breaking Out of Your
Trade Inertia
November 2018
www.pwc.com/digital
Strictly private and confidential

2. PwC’s Digital Services
Ever feel like your trade strategy is to run in place?
Confidential information for the sole benefit and use of PwC’s client.
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Is your trade strategy
leaving money on the
table?
Early movers are redefining approach to trade
spending²
▪ 3G cut the Heinz trade budget by ~25% & are
ready to do the same at other targets
▪ Studies suggest 27% of F&B industry is ripe
for sizeable trade promotion cuts; another
43% is in need of fine tuning
Confidential information for the sole benefit and use of PwC’s client.
Trade spend
management is a top
priority¹
▪ 69% of food & beverage companies rank
trade as a top three priority
▪ 67% of companies indicate trade has
increased in strategic priority over the
past two years
Majority of trade drives
negative ROI¹
▪ 67% of trade promotions do not even
break even, including 22% which actually
destroy revenue³
▪ More than 50% of surveyed companies
feel their trade funding program is
ineffective
Trade spend remains too
high in the industry¹
▪ 63% of companies believe the level of
industry trade spend is not sustainable for
the long-term health of their business
▪ Only 19% of companies have reduced
trade spend as a percent of sales over
the last two years
Trade practices are
outdated and broken¹
▪ 59% of companies struggle to translate
learnings from past events into future
plans
▪ 56% of companies rank updating their
funding methodology as their greatest
challenge
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1 Statistics from Strategy& Biannual Trade Survey
2 Center block from Goldman Sachs Trade Budgets at a Tipping Point
3 Cracking the Trade Promotion Code by Nielsen Company

4. PwC’s Digital Services
PwC’s Digital Services
“Trade Inertia” is a big problem for CPG companies
Confidential information for the sole benefit and use of PwC’s client.
We spent millions on a new TPM system but no one is using it
Trade Inertia
Definition: The tendency for profit to stay at rest or erode – despite all efforts to
impact it through trade / RGM. “
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Real world issues…
I know I need a new pricing strategy – but I don’t know what
the customer is willing to pay
We’re repeating promotions without knowing how they really
perform
Amazon is a bigger and bigger part of Sales – waiting to have
a coherent channel strategy is no longer an option
...Real world consequences
15 - 20%+ operating profit improvement left on the table¹ -
every year
1 Statistics from Strategy& Biannual Trade Survey and past client engagements spanning 25 years

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So what are some symptoms of Trade Inertia?
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Your trade processes are like Groundhog Day –
you keep doing the same things over and over

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Roles and responsibilities are unclear between different
groups that deal with trade

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Your trade system strategy is like Field of Dreams
You assume that by simply
building a new trade system,
benefits will come

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Your sales teams think like these guys …
… not like this guy

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Finally, you know where you want to go – but not how to get there

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PwC’s Digital Services
Trade Inertia is a challenge for a majority of CPG companies
Confidential information for the sole benefit and use of PwC’s client.
Cross Functional
Understanding
These programs are complex undertakings
requiring coordination and buy-in from
multiple functions including Sales,
Marketing, Finance, Revenue Growth
Management, Sales Strategy, Demand
Planning, Customer Service and IT
Conflicting
Vision
Stakeholder groups often have a different
(and sometimes conflicting) vision around
how trade capabilities can enhance and
support the company’s go-to-market
strategy
Challenging
Status Quo
Capability transformations challenge the
established way of doing things and require
people to step out of their comfort zone
and see the world differently than today
Picking the
correct Vendor
It can be difficult to effectively sort through
the myriad of vendor information, demos,
and approaches to figure out what is real
and what is marketing
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We’ve developed a blueprint for how to break out of Trade Inertia and
establish a state of Momentum to drive improved trade capabilities
Understand
Problem Areas
Perform a
Diagnostic
Initialize
Momentum
Framework
Strategic
Define
Program
Foundations
Structure
Implement
Program
Implement
Change
Initiatives
Leverage
New
Capabilities
Implement & Support
Strategy& Momentum Framework
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PwC’s Digital Services
You can’t get Momentum until you know the destination
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Capability Diagnostic Trade Spend Distribution Improvement Levers
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Leadership sponsorship and clear team accountability for each stage
Perform a Diagnostic
Understand your Problem
Areas
Identify Improvement
Opportunities
Program Vision and Roadmap

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PwC’s Digital Services
The vision must be supported by actions that make people “feel” the
momentum from the beginning of the program…
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Robust
Business Case
Well Defined
Scope
The Right
Partners
Proactive Change
Strategy
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Major effort areas during program structuring

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Leverage your new
capabilities
Post Program Engagement Plan:
Must create a robust post program engagement
plan to establish a continuous learning loop
“Folding in the learnings”
The new processes must become business as
usual, and any new technology must support
those processes seamlessly
…through
implementation and
roll-out
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During the program
Change Management
Set expectations and create engagement
After the program
Change Management
Drive endurance to sustain the newly built
capability
Implement the program
Near Term Value Capture:
“Quick wins” identified during the diagnostic
and subsequent development of the business
case that can generate immediate benefit
versus waiting for the full capability to be put
in place
Long Term Value Capture:
The full business case benefits, which are big
ticket opportunities realized sequentially over
the long term, can be further broken down
based on the capabilities required to support
the work
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PwC’s Digital Services
Case Study: For a US food company, we stood-up a RM capability to drive
Momentum and realize $150M in profit improvement
Portfolio Mapping &
Price-Pack Architecture
Strategic
Channel Alignment
Trade
Management
Integrated
Margin Management
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Confidential information for the sole benefit and use of PwC’s client.
Context
Stood-up a new Revenue Management COE for the company, developed 3-year roadmap and helped the group as it ramped up, establishing vision, standards,
playbooks, processes, systems and tools. We also identified the highest value RM levers for the business and helped develop key components (e.g., PPA, Trade, etc.)
to drive transformational growth for the business.
Leveraging insights to optimize customer
value-propositions across occasion,
brand, channel, pack and price
Aligning channel pricing strategies to
brand priorities and channel roles
Differentiated org., process and system
capabilities to efficiently and effectively
manage trade spend and drive improved
ROI
Linking buy-side commodity hedging
with market-back pricing to ensure
sustained value creation
Realized $150M VCM improvement over a 3-year period
▪ Reversed share decline trend in core categories
▪ ~15% ROI improvement on trade investment
▪ Achieved significantly greater precision and favorability from commodity driven pricing
▪ Realized ~40% benefits within year-1 through pay for performance
Example Components
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So how do you know once you’ve broken out of Trade Inertia?
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INSERT
When you can “show me the money” and
get the benefit from trade

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Any questions?
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PwC’s Digital Services
Formulation of a
robust, 2-3 year
pricing and trade
promotion
strategy
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Strategy& is the industry leader in Trade Promotion Excellence, providing
strategy thru execution across initiatives
PWC Strategy& Range of TPE Projects
Opportunity Sizing
“Get the Money”
(i.e., SWAT)
Pricing and
Trade Strategy
Highly focused effort to
quantify and segment
the potential benefits
from pricing and trade
transformation
Create the right value
proposition through price,
pack, and promotion
reflecting consumer
willingness to pay,
occasions, missions
Guideline
Development
Programmatic effort to
capture consumer
investment efficiencies
through improved
analytics and planning
Cutting edge point
solutions e.g.,
Performance Analyzer
– Post-Event Analysis,
Genesis – Price-Pack
Architecture
Solutions Provider
Strategy Execution
Funding and Trade
Architecture Strategy
Realigning client’s trade
funding investments with
strategic priorities
Capabilities Diagnostic
Assessing a client’s current
capability systems across
people, processes,
technologies, and analytics
Program Structuring
Focused effort to structure a
customer planning and trade
transformation program, focused
on process, organization, analytics,
and/or system improvements
System
Implementation
Leading or supporting
implementation efforts to
upgrade out-dated and/or
ineffective systems
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21. PwC’s Digital Services
Thank you for your
time today
Please feel free to reach out to discuss how
we can help you break your trade inertia
David Ganiear
PRINCIPAL, CLIENT SERVICE,
PWC STRATEGY&
Consumer & Retail practice
Mobile: +1 817-789-5657
Email: david.ganiear@pwc.com
Dallas
Robert Baker
PRINCIPAL, CLIENT SERVICE,
PWC STRATEGY&
Consumer & Retail practice
Mobile: +1 408-330-3069
Email: robert.d.baker@pwc.com
Dallas
Confidential information for the sole benefit and use of PwC’s client.
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PwC
Thank you!
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