Deep customer insight feeds ambitious growth strategy in food processing

21 July 2021

How an in-depth understanding of customer needs and behavior enabled a leading process technology business to develop a path to growth in the food sector.

Client need

Plural’s client, a leading processing technology player, set a path to double its position in the food vertical – a $400 million revenue opportunity. It had a leading position in certain product categories and was a follower in others.

The initial strategic plan had three objectives:

  1. Align the organization on a food vertical growth strategy
  2. Develop an organic growth path for each product category in all respective geographies
  3. Identify potential acquisition targets and attractive adjacencies for further analysis

Developing an organic growth path

Two essential elements of the organic growth path were to:

  • understand customer value drivers (needs, challenges and pain points)
  • get smarter on competitive positioning and gaps in the client’s offering

The combination of high regulatory standards, quality control, cost competitiveness, and increasing food complexity means that end user plant operators (such as at PepsiCo or Mondelez) are the key decision makers for processing technology. This results in a highly technical sell. Therefore, intimately understanding evolving customer challenges can give one company a critical edge over another.

As part of the effort to get closer to customer, the client recruited Plural Strategy to conduct a strategic review of food processor needs across different food verticals and across product categories (bearings, drives, gearboxes, belts, etc.).

At face value, customers were well served. Plural’s job was to test this, gauge a true understanding of customer challenges and needs in higher value verticals, and find gaps in competitor offerings.

Prioritizing higher value verticals

Our initial work involved determining the most attractive food sub-verticals to help focus the strategy.

We looked at the size of the opportunity and customer universe in key verticals and prioritized based on perceived level of risk in the end product and level of complexity in the manufacturing process (for example meat being highest risk and confectionary being complex).

Segmenting customers to drive value

The next step was to segment end customers by:

  • their observable characteristics and behavior (specifically size of customer)
  • how brand-driven they were as an organization vs operational,
  • level of innovation sought,
  • level of volume throughput etc

This enabled us to isolate and prioritize customer segments with the greatest potential to drive value where the customer would be most willing to pay for a premium solution and most open to collaborate with suppliers.
High volume, brand-driven customers driven by constant need to innovate and with extensive in-house engineering or slightly smaller customers with less in-house capabilities or high volume private label – less innovative but willing to invest in more sophisticated technology to ensure first class processing and efficiency.

Going deep on evolving customer challenges, needs and behavior

With the market structure and segmentation in place, Plural then conducted numerous in-depth conversations with leading end users in different segments. Although customers were mostly satisfied with current offerings, deep probing in the customer discussions revealed pain points and gaps in the overall offering, particularly with such fast changing consumer behavior, changing regulation and cost pressures on the food producers.

Plural’s primary work dug deep into the complex challenges faced by food producers which led to a shortlist of underserved needs that, if addressed, would give our client a superior value proposition and go-to-market advantage.

Go-to-market strategy

Plural took a comprehensive look at competitors across product categories to understand winning factors of the market leaders and go-to-market strategies. This allowed us to learn from key competitors but also to identify gaps vs customer needs – i.e. how to win.

We also made recommendations on how to go to market, deliver winning value propositions, how to take on the competition and where.

Impact

Plural’s work provided our client with an evidence-based roadmap to prioritize segments to play in. We also provided a deep understanding of customer needs to spot gaps in the current offering and identify opportunities to outmanoeuvre established competition.

The insight across product categories allowed the client to craft winning value propositions and a go-to-market strategy which was customer-led vs product-led.