3 CPG industry problems solved by business intelligence

By Chelsea Stone

12 min read

May 18, 2021

At this point, hearing the term “business intelligence” might set your BS radar off – lots of companies claim to provide it, to “empower” you with it, and yet – you’re not even sure how they define it. 

The truth is, business intelligence has become a catch-all term to refer to a huge variety of things – some more useful than others. And, like any tool, it has to be easy and accessible in order to gain any value from it. 

In the world of small CPG manufacturers, there’s no extra time or money to invest. Whatever business intelligence software, platform or tool you choose has to move as fast as you do, and it has to be quick and easy to learn. 

But before we jump in the deep end, let’s establish a couple things up front: like, what in the world really is a “business intelligence tool”?

 

What are business intelligence (BI) tools?

Broadly speaking, a business intelligence tool is anything that enables you to make data-driven decisions on your growth strategy. In practice this often means data mining teams, tools that run analytics, or data visualization software.

Unfortunately, there’s nothing in this definition that requires business intelligence tools to be easy and affordable. In fact, the opposite is most often true instead. Data mining or analytics projects are usually lengthy, requiring months of work from a team of people that comes with a big price tag. The alternative is begging and borrowing for free data sets from disparate or dubious sources – and then you have to try to patch that all together into actionable insights.

So the issue has become, with all our advancements in technology and all the data we collect, that many companies – especially small companies – simply can’t use business intelligence tools.

 

What problems can business intelligence (BI) solve?

This is a shame, because what’s the point of advancing technology if all of us can’t take advantage – whether we have a huge budget or we’re bootstrapped?

Across industries, the point of business intelligence is to take the guesswork out of growth. When you have data to drive decisions, you can mitigate the risk inherent to growing a business. Whether you’re a CPG manufacturer, real estate mogul, or dog walker, you have to spend to grow. Business intelligence, when used correctly, allows you to spend with precision. In the case of CPG manufacturing, for example, you have to spend on, for example, trade promotions. But with business intelligence, you can take your limited budget and allocate resources precisely: Perhaps you can’t afford to run a BOGO deal at all US retailers, but with business intelligence, you could identify a specific retailer in the Southeast market that your target consumer demographic frequents – and spend your money on a BOGO deal there.

 

What CPG data powers business intelligence?

For a deeper understanding of the way retail data informs CPG business intelligence tools, have a look at Key differences between POS and panel data. For our purposes here, let’s focus on the four “levers” you can pull to try to change your CPG brand’s fortunes:

Product data

You’ve gotta have a great product. Business intelligence can help with this, but you have to start with an idea and then dedicate yourself to carrying those values through your business plan. That matters to your consumers, whether you’re selling a luxury product or a tube of toothpaste.

Our business intelligence tool can help with this process

Concept Test Survey – Learn what consumers really want with our partner Suzy, a real-time market research platform.

Copy Test Survey – See what words and statements best resonate with your target consumers with a survey by our partner Suzy.

Shopper Behavior Reports – Use panel data powered by NielsenIQ to understand the shopper demographics that buy your products most often and in which markets, or which shoppers buy your category competitors.

Shopper Heavy, Medium, Light report by Byzzer

Click on the image to take a closer look.

 

Placement data

In CPG, this means distribution, and when we measure distribution, we talk about TDP, or total distribution points. In simplified terms, TDP is an aggregated measure of your product’s distribution. It refers to how much of your product is selling everywhere it is sold. 

In Byzzer’s business intelligence tools, you’ll see TDP used as a key measure across our library of reports, but to take a full picture of your distribution health, the most comprehensive option is the Distribution Landscape Report.

Distribution Landscape Report by Byzzer

Click on the image to take a closer look.

 

Price data

The dark art of pricing strategy doesn’t have to be so dark with business intelligence. It’s tricky because pricing isn’t about just one metric or datapoint to monitor. Instead, your pricing strategy must fluctuate in response to a long list of factors – everything from a change in the supply chain or the entry of a new competitor to the category, to greater economic forces like inflation or recession. 

Luckily, there’s a business intelligence tool for that. 

Price Comparison vs the Category report by Byzzer

Click on the image to take a closer look.

 

Promotion data

The key metrics to track here are which sales you made under normal circumstances, which sales you made thanks to a promotion, and which sales were made during a promotion, but would have happened anyway. To see how these metrics break down, we suggest: 

Sales decomp report by Byzzer

Click on the image to take a closer look.

 

3 Common CPG manufacturer problems

 

1. You can’t convince buyers to gain distribution

As they say, “You gotta spend money to make money,” and the world of CPG manufacturers and retailers is no exception. Buyers want you to bring data, case studies, category trends and more to prove you deserve a spot on the shelf or expanded shelf space. 

This is a huge obstacle for small CPG manufacturers to overcome. First of all, retail data is expensive or confusing – or both. Second of all, you’re up against category managers who are just looking for a way to say “no” in a space where competition is stiff. 

This is where CPG business intelligence can make all the difference. Show where the category is trending, and show how your product is leading the way in “the next big thing”. Tell the retailer who their consumers are – and who their competitors’ consumers are – and how popular your product is with that demographic. Prove that you have a great concept with targeted consumer market research. 

 

Pro-tip: If you’re really small or even pre-revenue, you can still use retail data to show your strengths.

  • Use the Concept Test Report to show how a target group of consumers love your product.
  • Use the Shopper Demo by Market Report to show how that target group of consumers aligns with that buyer’s demographic.
  • Use the Total Brand Landscape Report to show how the product your subcategory belongs to is growing faster than the others. 
  • Regardless of which report you use, focus on metrics like velocity ($ per TDP) to show how well your product is selling wherever it is available – even if sales and distribution figures are still modest.

You already have a great idea and a compelling product story. Use CPG business intelligence to complement the qualitative with the quantitative, and win over any category manager.

 

2. You lose money on trade promotions

Let’s say you’ve convinced a category manager to give you a spot on the shelf. Now it’s up to you to stay there. Trade promotion spend is fierce. While the big CPG brands have money to burn, your bootstrapped startup probably doesn’t. Don’t spend yourself off the shelf to compete with the big guys. Spend smart to make a targeted impact where you can.

Again, you can wield CPG business intelligence to work for you. 

  • Subscribe to Byzzer’s Promotion Efficiency Alert to keep a weekly pulse on the way markets are performing.
  • Use a report like Price Comparison vs. the Category to see what your competitors are doing. Dig deeper by filtering strategically by market – a promotion you run in LA, for example, might be very different from a promotion you run in Milwaukee.
  • Use the Shopper Demo by Market Report to determine the best retail partners to run promotions with. Perhaps you want to avoid markets where you already have established brand awareness, and you want to try running a promotion in a market where you’re lesser-known.
  • Track ROI! If you’re not a math or numbers person and you’re feeling a bit overwhelmed by all of the business intelligence that you could access, you’ll be pleasantly surprised to hear that determining ROI on promotional spend is incredibly easy with the Promo vs Non-Promo Sales Decomp Tree.

 

3. You don’t even know where to begin with retail data

You don’t have to be a whiz with CPG business intelligence overnight. Businesses take years to implement a data-driven strategy. A little business intelligence data can go a long way in transforming your fortunes.

Even powering a few key strategic decisions with this data can yield big wins. There’s nothing to lose by trying, but everything to lose by missing the business intelligence boat entirely.

 

Get deeper insights into consumers and their spending

As a small CPG manufacturer, you’ve got a lot to consider. Aside from your target consumer, you have to figure out what buyers want. As an entrepreneur, you have to be creative, quick and savvy. In the CPG space, you have to keep a close eye on economic conditions, supply chain logistics, and the occasional global pandemic. It’s a lot to be a data analyst on top of all that – so it’s a good thing you don’t have to be. With Byzzer, business intelligence is quickly accessible, easily understood, and actually affordable, so get started today with free access.

 

Byzzer is a self-serve business intelligence platform that gives small CPG manufacturers the power of NielsenIQ data.

Get free access today.

See your products in more carts.

Get free access

Byzzer Content Hub

How well does your brand leverage price?

5 minute read

Setting product prices is a conundrum that affects all manufacturers. You think you know how to weigh your production costs...

Retail analytics best practices guide – 2021  

8 minute read

In the CPG world, the best way to move your company forward is to analyze data. Unfortunately, with so much...

7 factors that influence the demand of consumer goods  

8 minute read

As a CPG company, one of the biggest challenges you face is anticipating demand. If you put out too much...

Stay in the loop with industry insights.

We’ll send you the latest and greatest on Byzzer, CPG, retail, manufacturing, and more.