Business sustainability/growth: Food ingredient producer

Business sustainability/growth: Food ingredient producer

Chemicals | Consumer Products
Management Consulting

A global food ingredient producer had a leading market share and a portfolio of technically-differentiated products, but financial results had been lagging. Revenue remained flat, and earnings were below expectations. CRA was asked by the client’s board and CEO to:

  • Examine the company's market and internal economics
  • Develop a strategy to turn around the business
  • Create a more sustainable business position, and assist with implementation

Challenge:

CRA’s approach to solving the challenges consisted of three phases.

  1. Evaluation – Analyzing the market (including customer-product segmentation, pricing drivers, competitive dynamics, segment profitability, and value chains), the client’s internal economics (revenue by segment, plant costs, and SG&A costs), and the client’s manufacturing network (optimizing capacity, utilization, and demand by plant). CRA worked with key employees in operations, finance, sales, and marketing to create these views of the business.
  2. Strategy development – Together with senior client leadership, we developed and refined a strategy to reduce costs, maximize asset utilization, and for the longer-term, reignite growth.
  3. Implementation – We worked with senior- and mid-level client management to scope, guide, and coordinate a variety of change-implementation projects across the organization.

Solution:

This project led the client to adopt a new segmentation approach for understanding and supplying customers, products, and markets. Overall organization focus is shifting from a market segment-led organization to a product-led organization. Using optimization software, CRA helped identify several asset rationalization opportunities; implementation against those opportunities has begun. We also helped build alignment around exiting loss-making segments, and implementation there has begun also.  CRA is currently helping to re-scope previously launched business improvement projects and train client personnel in key project management skills.