In today’s competitive business world, selling a product isn’t enough to stay ahead. Companies need to find ways to create value at every step and ensure they’re maximizing what customers are willing to pay. That’s where Strategic Revenue Growth Management (SRGM) comes in.

Strategic revenue growth management is all about developing smart strategies that build value, grow profit opportunities, enhance how consumers see your products, and capture the maximum value customers are ready to spend. When done right, SRM helps organizations not just compete, but lead.

GourmetPro expert Ken McWilliams breaks down the key components of SRGM and highlight some brands that are excelling in this space. Ken is a leading expert in revenue management and business strategy. As a key figure at the Revenue Management Institute (RMI) in Sydney, he specializes in optimizing pricing, demand forecasting, and financial performance. Known for turning complex data into actionable insights, Ken helps businesses enhance profitability and gain a competitive edge.

What is Strategic Revenue Growth Management?

SRGM is a holistic approach to maximizing revenue and profitability by optimizing pricing, promotions, product assortment, and trade investments. Unlike traditional sales and pricing tactics, SRGM integrates data-driven insights, consumer behavior analysis, and long-term market strategies to ensure sustainable growth. It helps businesses align their revenue goals with changing market conditions, competitor actions, and customer needs.

The Evolution of SRGM

The concept of revenue growth management originated in the airline industry in the 1970s, where dynamic pricing was introduced to maximize profitability. By the early 2000s, CPG and FMCG companies started adopting data-driven revenue strategies, optimizing pricing and trade spend. Over time, revenue growth management evolved beyond pricing into a strategic function that connects multiple aspects of business planning, including market insights, supply chain management, and AI-driven analytics.

Today, strategic revenue growth management takes RGM a step further, focusing on long-term, cross-functional revenue optimization. It integrates advanced predictive analytics, consumer segmentation, and competitive intelligence to create tailored strategies that enhance profitability while maintaining brand equity.

Why SRGM Matters in the F&B Industry

In the food and beverage sector, profit margins are razor-thin, competition is fierce, and consumer preferences shift rapidly. With inflation driving up ingredient and packaging costs, and e-commerce disrupting traditional sales models, SRGM provides businesses with the agility to respond to these challenges proactively. It enables food brands, restaurants, and distributors to fine-tune pricing, optimize product portfolios, and invest in trade promotions that maximize ROI.

Key Benefits of Revenue Growth Management in F&B

Increased Profitability Through Smart Pricing

SRGM ensures that food brands capture the maximum value consumers are willing to pay. By using AI-powered price optimization, businesses can dynamically adjust prices based on demand, competitor pricing, and seasonality. This prevents underpricing and excessive discounting, protecting margins while staying competitive.

Optimized Product Portfolio for Market Fit

A well-executed SRGM strategy aligns product offerings with consumer demand. By analyzing sales data, businesses can identify high-performing SKUs, eliminate underperforming products, and introduce new offerings tailored to market trends. This is especially valuable in premium and functional food categories, where consumer preferences shift rapidly.

Data-Driven Trade Promotion Effectiveness

Trade promotions can either drive revenue or drain profitability if not executed strategically. Strategic revenue growth management helps businesses track promotion effectiveness, optimize discount levels, and prioritize high-ROI campaigns. With AI-driven insights, companies can invest in promotions that truly boost sales rather than relying on guesswork.

Agility in a Changing Market

With inflation, supply chain disruptions, and evolving consumer behavior, F&B companies must stay agile and proactive. SRGM enables businesses to forecast market shifts, adjust pricing strategies in real-time, and optimize channel distribution to navigate economic uncertainty while maintaining profitability.

Stronger Retail & Distribution Partnerships

Retailers expect F&B suppliers to justify pricing and promotional decisions with data. SRGM strengthens supplier-retailer relationships by providing clear, data-backed pricing rationales, improving negotiation leverage, and aligning incentives to ensure mutually beneficial growth.

Key Factors Driving SRGM in F&B

Inflation and Rising Costs

Inflation is shrinking profit margins in the food industry, making revenue optimization critical. Higher costs for raw materials, packaging, energy, and labor force brands to find new ways to maintain profitability without alienating consumers. SRGM enables dynamic pricing adjustments based on cost fluctuations, ensuring financial stability despite economic pressures.

Advancements in AI and Data Analytics

AI-powered analytics have transformed revenue management by enabling real-time pricing, demand forecasting, and promotional optimization. Traditional pricing models relied on historical data, but today’s machine learning tools analyze vast datasets to identify trends, predict demand, and adjust pricing accordingly. SRGM ensures brands maximize revenue while maintaining price competitiveness.

Changing Consumer Behavior

Modern consumers are more price-sensitive, value-driven, and selective in their purchases. The rise of health-conscious eating, sustainability concerns, and premiumization trends means F&B brands must align pricing and product strategies with evolving preferences. SRGM allows businesses to segment their pricing models and offer value-driven promotions tailored to different customer segments.

The Shift to Omnichannel Retail

E-commerce, direct-to-consumer models, and digital grocery platforms are reshaping F&B sales. Traditional revenue models focused on in-store pricing and promotions, but strategic revenue growth management adapts pricing across online and offline channels. With digital marketplaces offering dynamic pricing and AI-driven promotions, brands must optimize pricing strategies to remain competitive.

Supply Chain Disruptions

Global supply chain challenges have led to product shortages, shipping delays, and fluctuating ingredient costs. SRGM helps F&B brands manage uncertainty by optimizing product portfolios, adjusting pricing in real time, and reallocating trade spend based on supply availability. This ensures that companies remain agile and profitable despite logistical constraints.

Stricter Retailer & Distributor Demands

Retailers and distributors expect data-backed justifications for pricing and promotions. With increasing pressure from private labels and competitive pricing negotiations, F&B brands must provide clear, analytical insights on pricing rationale, trade spend, and product performance. SRGM enables data-driven decision-making, helping brands secure better retail partnerships.

The Need for Long-Term, Sustainable Growth

Short-term price cuts and reactive promotions are no longer enough to drive profitability. Strategic revenue growth management shifts the focus from tactical pricing to long-term revenue growth, ensuring sustainable profit margins. By integrating AI, predictive analytics, and market intelligence, brands can develop revenue strategies that drive consistent growth while maintaining brand equity.

Four Key Pillars of Strategic Revenue Growth Management

1. Building Brand Value

A strong brand is the foundation of SRGM. To succeed, companies must make their brand stand out and ensure it is valuable to their customers. Here’s how:

• Find your differentiator: Identify what makes your brand unique and focus on it.
• Target premium segments: Push your higher-priced products to boost profitability.
• Increase recognition: Make your brand easily recognizable and memorable.
• Stay relevant: Ensure your products align with consumer needs, from packaging to pricing and availability.
• Be accessible: Make your brand easy to find and purchase, whether online or in stores.
• Position strategically: Showcase your value across the entire value chain, from production to consumer experience.
• Forge partnerships: Work with retailers and distributors to keep your products visible and desirable.

Example: Coca-Cola’s Global Market Domination

Coca-Cola has built an iconic brand through strong differentiation, premium positioning, and mass accessibility. By maintaining consistent branding, investing in high-impact marketing, and forming strong retail partnerships, Coca-Cola justifies premium pricing while staying competitive across different markets. Its ability to align product offerings with regional preferences further reinforces its global dominance.

2. Expanding Profit Pools

To grow revenue, companies must look for profit opportunities in their industry and grab a bigger share. Here’s how to do it:

• Analyze profit pools: Understand where the money is in your market and how much of it your brand controls.
• Innovate and diversify: Expand your product range to create new revenue streams.
• Shake things up: Disrupt industry norms with game-changing products or approaches.
• Streamline processes: Make your value chain more efficient to boost profitability.
• Own critical transactions: Position your brand at the heart of the most important purchase decisions.
• Go premium: Elevate your portfolio to include high-end, premium-priced options.

Example: Nestlé’s Product Diversification Strategy

Nestlé continuously expands its profit pools by launching new product categories and adapting to market trends. From premium coffee (Nespresso) to plant-based alternatives (Garden Gourmet), Nestlé diversifies its portfolio to capture emerging consumer segments. By investing in health-focused and sustainable product lines, Nestlé taps into high-growth, high-margin markets while strengthening brand loyalty.

3. Enhancing Consumer Value from Purchase to Consumption

SRM isn’t just about the moment of purchase – it’s about creating value throughout the customer’s experience. Here’s how brands can make it happen:

• Map the journey: Understand the touchpoints from product awareness to consumption.
• Tailor products for key moments: Identify when and how customers are using your products and design them for those occasions.
• Focus on packaging: Use creative designs that highlight your product’s value.
• Stand out on shelves: Ensure your products are displayed and presented in a way that grabs attention.
• Elevate the experience: Make consumption moments special to leave a lasting impression.

Example: Chobani’s Health-Driven Innovation

Chobani redefined consumer expectations in the yogurt market by focusing on nutrition, taste, and ingredient transparency. By offering high-protein, low-sugar Greek yogurt with clean-label ingredients, Chobani aligned its products with growing health and wellness trends. Its innovative flavors, plant-based alternatives, and functional benefits further enhanced consumer value. Additionally, Chobani’s commitment to sustainability and social impact strengthens its connection with conscious consumers, driving long-term brand loyalty.

4. Capturing the Full Willingness to Pay (WTP)

The ultimate goal of SRM is to ensure your brand gets the full value consumers are willing to spend. To achieve this, companies need to:

• Offer a smart product mix: Build a portfolio that competes profitably across all channels.
• Keep innovating: Continuously add value to justify premium pricing.
• Leverage convenience and scarcity: Use location, exclusivity, or limited editions to increase WTP.
• Examine the value chain: Identify opportunities to capture value at every step, from production to distribution.
• Protect your brand: Use trademarks and agreements to shield against competitors or imitators.
• Be easy to find: Ensure your products are readily available when and where consumers want them.

Example: PepsiCo’s Smart Pricing Strategy

PepsiCo optimizes pricing across multiple consumer segments by using a tiered pricing approach. It offers value brands (Mountain Dew), premium options (Naked Juice), and localized products to cater to different WTP levels. Dynamic pricing strategies – adjusting prices based on market trends, seasonality, and promotions – help PepsiCo maximize revenue without alienating price-sensitive consumers.

The Big Picture

Strategic revenue growth management is about far more than just setting prices – it’s about creating value at every stage of the consumer journey, from awareness to consumption. By building strong brand equity, exploring new profit opportunities, enhancing consumer experiences, and capturing maximum value, companies can gain a significant competitive edge.

Brands like Chobani and Coca-Cola demonstrate the immense potential of SRGM when it’s done right. For businesses ready to embrace this strategy, the benefits are clear: loyal customers, higher revenues, and a strong position in the marketplace.

Frequently Asked Questions

1. What is Strategic Revenue Growth Management?

Strategic revenue growth management is a data-driven approach to optimizing pricing, promotions, product assortment, and trade spend to maximize profitability. Unlike traditional revenue management, SRGM takes a long-term, strategic perspective by integrating market intelligence, consumer insights, and predictive analytics. It helps businesses align their revenue goals with market conditions, competitive pressures, and changing consumer preferences to drive sustainable growth.

2. Why is SRGM important for businesses?

SRGM is crucial for businesses facing tight margins, rising costs, and intense competition. It helps companies make informed decisions on pricing, promotions, and product positioning, ensuring profitability without losing market share. With SRGM, businesses can adjust to market trends in real time, manage supply chain disruptions, and improve their overall financial resilience, while maintaining a strong customer base.

3. What are the four pillars of SRGM?

The four pillars of strategic revenue growth management are:

1. Building Brand Value: Strengthening brand differentiation, positioning, and premium pricing
2. Expanding Profit Pools: Identifying new revenue streams through product innovation and market expansion
3. Enhancing Consumer Value: Improving the customer experience from product discovery to consumption
4. Capturing Willingness to Pay: Optimizing pricing and product mix to maximize revenue

Looking to unlock greater revenue with strategic revenue growth management? Get expert insights on pricing, promotions, and profitability.

Book a consultation with Ken today!