{"id":2658,"date":"2024-08-16T17:28:27","date_gmt":"2024-08-16T15:28:27","guid":{"rendered":"https:\/\/houseofboards.eu\/cases\/increase-contribution-margin-for-company-in-food-sector\/"},"modified":"2024-08-23T15:32:07","modified_gmt":"2024-08-23T13:32:07","slug":"increase-contribution-margin-for-company-in-food-sector","status":"publish","type":"cases","link":"https:\/\/houseofboards.eu\/en\/cases\/increase-contribution-margin-for-company-in-food-sector\/","title":{"rendered":"Increase contribution margin for company in food sector"},"content":{"rendered":"<h3>Background<\/h3>\n<p>  X is a producer and distributor of fresh prepared meals. The company supplies both supermarkets and consumers through online orders. The company&#8217;s contribution margin was 20%, below the industry average. Our goal was to increase the margin to 30% within 12 months.  <\/p>\n<h3>Step 1: Analysis of cost structure<\/h3>\n<h5>1.1.<br \/>\nGrondstoffen en ingredi\u00ebnten <\/h5>\n<ul>\n<li><strong>Analysis<\/strong>: Raw materials and ingredients constituted a significant portion of production costs.<br \/>\nX faced price volatility of seasonal ingredients. <\/li>\n<li><strong>Actions<\/strong>: We conducted a study on securing long-term contracts with suppliers to ensure more stable prices.<br \/>\nAlternatives, such as using local and seasonal ingredients, could save costs. <\/li>\n<\/ul>\n<h5>1.2.<br \/>\nProductieproces <\/h5>\n<ul>\n<li><strong>Analysis<\/strong>: The production process was labor intensive and included many manual steps, which reduced efficiency.<\/li>\n<li><strong>Actions<\/strong>: investments were made in automation where possible, such as automated packaging lines and cooking processes.<br \/>\nWe implemented lean manufacturing principles to reduce waste and increase efficiency. <\/li>\n<\/ul>\n<h5>1.3.<br \/>\nVerpakkingsmateriaal <\/h5>\n<ul>\n<li><strong>Analysis<\/strong>: Packaging costs were significant, mainly because of the high demands around freshness and aesthetics.<\/li>\n<li><strong>Actions<\/strong>: We investigated cheaper but similar quality alternatives to packaging materials.<br \/>\nWe also tried to reduce the size or weight of packaging to reduce costs. <\/li>\n<\/ul>\n<h3>Step 2: New pricing strategy<\/h3>\n<h5>2.1.<br \/>\nProductmix optimalisatie <\/h5>\n<ul>\n<li><strong>Analysis<\/strong>: Some meals were more popular than others and had higher margins.<\/li>\n<li><strong>Actions<\/strong>: We shifted the focus of our marketing efforts to the most profitable products.<br \/>\nWe removed less profitable products from the assortment. <\/li>\n<\/ul>\n<h5>2.2.<br \/>\nPrijsverhogingen <\/h5>\n<ul>\n<li><strong>Analysis<\/strong>: Price increases and the elimination of unnecessary discounts and cash rebates could directly improve margin.<\/li>\n<li><strong>Actions<\/strong>: We added premium product lines with higher margins, targeting consumers who were willing to pay more for extra quality or convenience.<\/li>\n<\/ul>\n<h5>2.3.<br \/>\nBundeling en upselling <\/h5>\n<ul>\n<li><strong>Analysis<\/strong>: Sales strategies such as bundling and upselling could slightly increase the average order value.<\/li>\n<li><strong>Actions<\/strong>: Consumers were encouraged to add side dishes, drinks or desserts at a higher total price.<\/li>\n<\/ul>\n<h3>Step 3: Improving operational efficiency<\/h3>\n<h5>3.1.<br \/>\nLogistiek en distributie <\/h5>\n<ul>\n<li><strong>Analysis<\/strong>: We identified high logistics costs due to inefficiencies in distribution.<\/li>\n<li><strong>Actions<\/strong>: We optimized routes and negotiated with logistics partners to reduce costs.<br \/>\nWe optimized inventory management to minimize waste and cost of excess inventory. <\/li>\n<\/ul>\n<h5>3.2.<br \/>\nEnergie en waterverbruik <\/h5>\n<ul>\n<li><strong>Analysis<\/strong>: The production of prepared meals was energy and water intensive.<\/li>\n<li><strong>Actions<\/strong>: An energy and water audit identified conservation measures such as energy-efficient equipment and water reuse systems.<\/li>\n<\/ul>\n<h3>Step 4: Innovation and product development<\/h3>\n<h5>4.1.<br \/>\nProductontwikkeling <\/h5>\n<ul>\n<li><strong>Analysis<\/strong>: Product innovation could open new markets and yield higher margins.<\/li>\n<li><strong>Actions<\/strong>: We developed new, unique meal concepts that capitalized on trends such as health, sustainability and convenience.<br \/>\nThat justified a higher price. <\/li>\n<\/ul>\n<h5>4.2.<br \/>\nVerpakking en duurzaamheid <\/h5>\n<ul>\n<li><strong>Analysis<\/strong>: Sustainability was a growing consumer demand, which could provide a competitive advantage.<\/li>\n<li><strong>Actions<\/strong>: Eco-friendly packaging options were developed and communicated to the market.<br \/>\nThis could help strengthen the brand and justify price increases. <\/li>\n<\/ul>\n<h3>Step 5: Marketing and branding<\/h3>\n<h5>5.1.<br \/>\nMerkpositionering <\/h5>\n<ul>\n<li><strong>Analysis<\/strong>: A stronger brand position could reduce price sensitivity to some extent.<\/li>\n<li><strong>Actions<\/strong>: We repositioned X as a premium brand with a focus on quality, freshness and sustainability.<br \/>\nWe applied storytelling in the marketing campaigns to highlight the company&#8217;s unique value proposition. <\/li>\n<\/ul>\n<h5>5.2.<br \/>\nKlantloyaliteitsprogramma\u2019s <\/h5>\n<ul>\n<li><strong>Analysis<\/strong>: Loyal customers were often willing to pay more and return.<\/li>\n<li><strong>Actions<\/strong>: We set up loyalty programs that rewarded returning customers.<br \/>\nThis was able to increase both sales and margins. <\/li>\n<\/ul>\n","protected":false},"featured_media":2907,"template":"","class_list":["post-2658","cases","type-cases","status-publish","has-post-thumbnail","hentry"],"meta_all":{"achtergrond":"<p>X is a producer and distributor of fresh, prepared meals.\nThe company supplies both supermarkets and consumers through online orders.\nThe company's contribution margin was at 20%, below the industry average.\nOur goal was to increase the margin to 30% within 12 months.   <\/p>\n","conclusie":"<h3>Conclusion: holistic approach for higher margins<\/h3>\n<p>Using various strategies, we were able to reduce costs, increase revenues and increase contribution margin.\nImproved operational efficiency, product innovation and a stronger brand strategy ensured that we achieved our 30% margin target.\nX's success depended on a holistic approach that included both cost management and strategic growth.\nThrough targeted investments and adjustments, the company was able to significantly improve its margins.   <\/p>\n","korte_beschrijving":"House of Boards increased the contribution margin (or gross margin) for a manufacturer of prepared meals.\nWe implemented several strategies to do this. ","rank_math_news_sitemap_robots":"index","rank_math_robots":["index"],"rank_math_analytic_object_id":"46","rank_math_internal_links_processed":"1"},"meta_all_flat":{"achtergrond":"<p>X is a producer and distributor of fresh, prepared meals.\nThe company supplies both supermarkets and consumers through online orders.\nThe company's contribution margin was at 20%, below the industry average.\nOur goal was to increase the margin to 30% within 12 months.   <\/p>\n","conclusie":"<h3>Conclusion: holistic approach for higher margins<\/h3>\n<p>Using various strategies, we were able to reduce costs, increase revenues and increase contribution margin.\nImproved operational efficiency, product innovation and a stronger brand strategy ensured that we achieved our 30% margin target.\nX's success depended on a holistic approach that included both cost management and strategic growth.\nThrough targeted investments and adjustments, the company was able to significantly improve its margins.   <\/p>\n","korte_beschrijving":"House of Boards increased the contribution margin (or gross margin) for a manufacturer of prepared meals.\nWe implemented several strategies to do this. ","rank_math_news_sitemap_robots":"index","rank_math_robots.0":"index","rank_math_analytic_object_id":"46","rank_math_internal_links_processed":"1"},"_links":{"self":[{"href":"https:\/\/houseofboards.eu\/en\/wp-json\/wp\/v2\/cases\/2658","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/houseofboards.eu\/en\/wp-json\/wp\/v2\/cases"}],"about":[{"href":"https:\/\/houseofboards.eu\/en\/wp-json\/wp\/v2\/types\/cases"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/houseofboards.eu\/en\/wp-json\/wp\/v2\/media\/2907"}],"wp:attachment":[{"href":"https:\/\/houseofboards.eu\/en\/wp-json\/wp\/v2\/media?parent=2658"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}