CPG Manufacturers Selling in Canada: What to Do When You Can’t Compete on Price
Picture this: in the wild world of Canadian CPG (Consumer Packaged Goods), inflation struts in, waving its hands like it owns the place. Prices are skyrocketing, competitors are circling like hawks, and manufacturers are caught in this chaotic price war. It’s like a reality show; unfortunately, the big guys are winning. In this climate, it’s hard for mid-market CPG manufacturers to feel like heroes when they can’t compete on price.
Why the scramble? The inflation rate in Canada has experienced significant increases over the past five years. Since 2019, inflation has risen steadily, culminating in a notable jump of over 7% yearly since 2022. This trend reflects a combination of supply chain disruptions, increased consumer demand, and global economic pressures.
The sustained rise in inflation has prompted concerns about the cost of living and the Bank of Canada’s monetary policy response. The truth is that economic pressures make it tricky for brands to maintain their market position. When you’re going head-to-head with Goliaths of the industry, who can drop prices without breaking a sweat, what’s a David to do?
First, let’s shift the game plan from competing on price to competing on value. The secret sauce? The best sauces have a few ingredients.
E-commerce! As of 2024, Canadian online retail sales are projected to reach approximately $95 billion. This growth reflects the ongoing trend of consumers increasingly turning to online platforms for shopping. That number is expected to grow! By embracing e-commerce, mid-market CPG brands can sell directly to consumers, creating unique brand experiences. Who needs price wars when you can make a cozy online shopping experience that keeps customers returning for more?
Next, let’s discuss the following ingredient: merchandising. Boldly enhancing your retail merchandising isn’t just an option; it’s become essential. Standing out on the shelves takes more than a pretty package. It’s about consistency, availability, and trust. Consistency and availability are critical. A 2023 Nielsen study shows that brands focusing on ensuring product availability can increase sales by up to 12%. Those fancy price wars become irrelevant when shoppers can trust that they’ll find your product, rain or shine.
Now, how about diversifying your offerings? Creating innovative and complementary products can also set you apart. Explore different packaging sizes, flavours, or formats. For example, a mid-market brand that offers a convenient single-serve option may steal the spotlight—and the sales—from larger competitors desperate to cut prices.
Finally, let’s talk partnerships. Enter stage left: your retail merchandising partner. These unsung heroes can help navigate the tempestuous seas of retail with strategies beyond just shelf space. They can analyze your sales data, leverage their connections, and implement innovative in-store promotions that catch consumers’ eyes (and wallets!). Strong merchandising strategies can help ensure that your product is not only in stock but also the first choice in the consumer’s mind.
In this era of inflation and price wars, mid-market CPG manufacturers in Canada can take a step back and reassess their strategies. Competing on price is a slippery slope where only the big brands thrive. Instead, by harnessing e-commerce, fortifying merchandising, diversifying offerings, and collaborating with retail partners, you can carve out a space where your brand stands tall—without slashing prices. For more information about how you can make your CPG brand more competitive at retail, visit www.marketsupport.ca.
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