Re-base the Plan; Re-gain Control

F&B leaders are beginning to digest and consider the medium and longer-term implications of Covid-19 on their businesses. Many have asked us if their markets will structurally change, both as a result of shifts in consumer attitudes and behaviours and due to the repositioning of their competitive set. The picture is still more complicated for companies that hold portfolios across categories that have fundamentally different dynamics. 

How can companies and leaders re-gain a measure of agency over their short-term business performance, regain a sense of visibility into the alternative futures possible, and fundamentally arm themselves with the knowledge needed to make the right cost, investment, and financing choices now and over the next handful of months – choices that will help them survive but also outperform when the recovery comes.

This can be done by re-basing the company’s strategic / financial plan within the context of Covid-19. 

Doing this effectively requires:

• Forming a point of view on how sensitive the company demand algorithm is to different macroeconomic scenarios (e.g. i.e. lockdown timing, macroeconomics, consumer behaviour, competitor behaviour) across a de-averaged footprint of channels, categories, and brands
• Understanding how the cost line might relate to the revenue line – i.e. how the trajectory of demand relates to supply chain costs across, how remote work and limited travel impact overheads, etc.
• Taking a staged temporal view of how things may change during the different phases of the crisis: – i.e. Old Normal, Stockpiling, Quarantine, New Normal (fewer / larger purchases, greater price sensitivity)
• Across all modelled impacts, understanding a) whether the impact is positive or negative? b) the magnitude of change and c) the timing – i.e. temporary vs. lasting

We have used the below approach with some of our F&B clients as we help them align on the future using a combination of top-down scenario planning and bottom-up profitability dynamics.

To learn more about a detailed step by step approach to Re-basing your Strategic Plan, please do make contact. We would be happy to follow up with a short call or a brainstorming session to debate the implications for your company.