What to do if Brexit is impacting your food brand margins


Marmite Gate, Toblerone losing some Alps, Birds Eye fish fingers and Walkers are making the news…looks like we’re entering a period of significant food cost inflation driven by the dramatic fall in value of the pound.

Product cost inflation isn’t a subject that many brand owners or retailers enjoy grappling with.  Unfortunately, the buck often ends up with the consumer through price increases ore reduced pack sizes, but inflation needs to be dealt with if you want to maintain your profit margin.

Is it possible to successfully land the impact of cost inflation in a retailer and consumer environment that would rather you didn’t?


One approach is to change your mindset.

Exploring how you deliver value, rather than simply increasing prices could open some avenues you hadn’t considered.


Can you increase the value you offer to consumers in excess of the additional ‘cost’?

Can you offer an improved product? Using better quality ingredients? Make your pack larger? Or consider alternative recipes? These approaches can deliver increased value for consumers in conjunction with a price increase.


Review each element of your business process to determine if you can create value more efficiently

What can you do more efficiently within your business to reduce costs without impacting your product? Can you reduce your ingredient costs using alternative suppliers or purchasing in a different way? Is there an opportunity to strip out unnecessary production or packaging cost? Can you renegotiate your distribution arrangements? What impact would removing poor performing products from your range have on overall profit? Can your promotional investment become more efficient?

It may not be sexy, but there are often many ways to reduce your cost base making your brand financially stronger, without increasing price or reducing the size or quality of your product.

Even if you can’t completely remove the need to take a price increase, assessing the value you offer consumers and making your business more efficient can significantly reduce the impact of cost inflation for your consumers.

At BrandWorks, we support food brand owners in reinvigorating and accelerating brand growth.


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