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CPGs Increase Account-Specific Marketing

JACKSONVILLE, Fla. — CPG companies are ramping up retailer-specific marketing programs and finding ways to cut back on slotting fees, according to an in-depth report on trade promotion from AMG Strategic Advisors, the new strategy and insights consulting unit of Acosta Marketing Group.

The report, called “Trend Behind the Spend: A Study of Trade Promotion and Merchandising Spending in the CPG Industry,” found that two out of three CPG companies surveyed engaged in retailer-based account-specific marketing, and about a third of those that do not currently use account-specific marketing plan to begin doing so in the next year. More than 80% of larger companies participate in account-specific marketing, while less than half of small manufacturers do.

The report, which surveyed 235 CPG companies in a wide range of categories, also found that about 70% of CPG companies are able to negotiate slotting fees with retailers, but less than 30% do so regularly. The most common tactics include trade reinvestment or swapping out lower performing SKUs, but other strategies have also proven successful. About 20% overall expect increased slotting fees.

Among other findings:

• Three out of five companies executed digital marketing programs in the past year, and more than half expect to expand such programs in the coming year.

• On average, CPG companies spend 13.7% of their gross sales on trade funds — a figure that is higher for dairy and frozen-food companies, and lower for HBC/GM companies. More than half of the companies using shopper marketing indicated they plan to increase shopper marketing activities in the coming year.

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