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The Category Leadership Imperative

Why Category Leadership is Critical to CPG & Retail Success

2 The Category Leadership Imperative

The Fall season, to me, is a time for re-flection. As the trees change colors and temperatures mercifully retreat, it is a time to not only think back on the journey of the past year, but to build excitement and anticipation for the coming new year. For many of us, Fall also means the fourth financial quarter is now looming, and brings about a different kind of reflec-tion—an urgent reminder that results are coming due sooner than we would prefer, and a recognition of the challenges that continue to affect our performance.

It’s because of this that I’m excited to share Caprē Group’s Category Leader-ship initiative and how it impacts results. Our work with top manufacturers and re-tailers gives us insight into which strategic priorities business leaders are investing

their resources, and Category Leadership is near the top. Success today is driven by strong foresight at a holistic category lev-el—one that focuses on growth for both one’s own organization and its important external partners.

Take innovation, for example. Shrink-ing margins are increasing the pressure to innovate, but line extensions are ex-hausted, and niche competitors are soak-ing up demand before larger, less-agile firms can take action. But through Cat-egory Leadership, companies can estab-lish a vivid, insights-led vision for the future that the whole company can rally behind. This cross-functional alignment creates an integrative arena for teams to collaborate for success.

We hope this paper helps you better un-derstand the opportunity for Category Leadership to impact your business re-sults, and that it arms you with the key components to begin building this capa-bility. And since Fall also happens to be college football season, I’ll close by simple saying: Go Gators!

A Word From Our Founder Anne Chambers

Sincerely,

Anne Chambers


Headline here

About the Authors

Caprē Group would like to extend a special thanks to our esteemed industry colleagues who shared their time and expertise in the creation of this white paper:

Chris Almeida · Senior Director of Marketing and Store Experience | CVS Health

Geoff Betrus · Senior Director of Shopper Solutions | Johnson & Johnson

Greg Brewer · Managing Director of Category Leadership | Nestlé Purina Petcare

Dale Clark · Senior Director of Sales Strategy and Shopper Engagement | The Hershey Company

Authors & Contributors

Acknowledgements

Anne’s expertise includes driving growth through customer-centric strategies in shop-per and consumer marketing, strategic plan-ning, large-scale change initiatives, interactive marketing, CRM and technology innovation.

Anne Chambers · CEO & Founder

Juan brings a wealth of knowledge and ex-pertise in brand and shopper marketing and a deep understanding of retailer collabora-tion. Juan also applies his global CPG expe-rience to enhance the scope and perspective of client solutions.

Juan Lora · Director

Kristi is an industry pioneer in Shopper Marketing, with experience designing and deploying shopper marketing capabilities, in-tegrating consumer and shopper disciplines, and building shopper engagement models for leading CPG clients.

Kristi Ross · Managing Principal

Kyle’s expertise includes providing cutting- edge insights and strategy to drive innova-tive solutions for global consumer brands. He is also a pioneer in Habit Marketing, an approach for driving automatic, unconscious shopper loyalty.

Kyle Morich · Consultant

Scott’s expertise includes strategic catego-ry planning, shopper marketing excellence, shaping strategies into winning sales plan, and collaborating with his clients to solve complex business problems that drive results.

Scott Daughdril · Director

Coco is a strategic marketing professional with demonstrated expertise building reve-nue-generating programs & strategies with a specialty in bringing innovative, tailored solutions to life.

Coco Owens · Consultant


ContentsExecutive Summary Page 5

The Leadership Dilemma Page 6 Seeking collaboration with partners is better than going alone

Why Category Leadership is Needed Now More Than Ever Page 7 The changing market demands a Category Leadership approach

A New Model of Category Leadership Page 8 A framework for understanding Category Leadership

Insights & Trends Page 8 The fuel for creating a category-first viewpoint

Category Vision and Growth Drivers Page 9 The backbone of strong Category Leadership

Case Study: Tide PODS Page 10 Igniting growth where there’s none to be found

Internal Strategies Page 11 Alignment to the category vision sparks innovation

External Strategies and Planning Page 12 Dedication to mutual growth drives mutual success

Why Category Leadership? Page 13 The internal and external benefits to be realized

What Impedes Category Leadership? Page 14 What happens when Category Leadership falters

Case Study: Kodak Page 15 Lead or Be Led (to Bankruptcy)

A Category Leadership Capability: What’s Needed to Lead the Way Page 16 The fundamental components of a Category Leadership capability

Case Study: Never Too Late Page 19 A Major CPG Changes Its Destiny Through Category Leadership

The Path to Category Leadership: 5 Steps to Get Started Page 20 How to quickly bring Category Leadership to your organization

The Look of Success Page 21 How Caprē Group has delivered client results via Category Leadership

Declare for Category Leadership with Caprē Group Page 22


Collaboration between CPGs & Retailers can lead to big wins for both, but more often than not our structures, incentives, and inertia inhibit working together. Now more than ever, companies must create a leadership voice, and Category Leadership is the best approach for identifying the insights, driving the innovation, and creating the market impact that is so necessary to succeed in this uncertain and changing marketplace.

The Caprē Group model of Category Leadership has four distinct parts:

Organizations that build a Category Leadership capability improve their innovation success rate, they increase productivity, they boost differentiation, and they drive shopper conversion & loyalty. Most importantly, Category Leaders elevate their relationships with external stakeholders; by adopting a category-first mindset, a Category Leadership organization declares its intent to drive mutual success.

Category Leadership goes beyond a simple vision for the future—it is a foundational change in how organizations go to market. And in an increasingly complex and challenging world, it is becoming the new standard for how successful organizations operate and create sustainable growth for them-selves and their partners.

The Category Leadership Imperative

3.First, it is fueled by comprehensive Insights & Trends. These are robust ideas that drive ac-tion and provide foresight into what dynamics are influencing the marketplace.

Next, it is anchored by a strong Category Vision and impactful Growth Drivers. The vision provides an aspirational viewpoint on how the category will evolve in the coming years, and the drivers define what will influ-ence growth in that future state.

The vision is an inspirational beacon to align Internal Strategies. When centered on a guiding vision for the future, internal strate-gies can ignite innovation across the organi-zation to unlock new levels of growth.

Finally, having a defined category viewpoint creates cohesive External Strategies. These strategies improve collaboration by uniting CPGs & retailers around a common platform for growth and driving joint benefits.

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2.4.

Why Category Leadership is Critical to CPG & Retail Success

Executive Summary


The Leadership Dilemma

Collaboration

We know collaboration can lead to bigger wins, but time

and time again we work only in our own self-interests.

is critical to suc-cess, but when opportunities for collabo-ration arise in the real world, we tend to only look out for ourselves. Many of us learned this from the old Psychology 101 mainstay “the Prisoner’s Dilemma.” The Prisoner’s Dilemma experiment illus-trates that promoting one’s own rational self-interest will ultimately lead to worse outcomes than working cooperatively for total mutual gain. If everyone is looking out for themselves alone, everyone loses. We remember this experiment and ap-preciate its lessons, and yet we forget its teachings when encountered in reality.

We operate in an interconnected world, and yet our structures inhibit these con-nections. We are “manufacturer” or “re-tailer,” not “partners.” We are “marketing” or “sales,” not “teammates.” The organiza-tional silos we create to bring order and focus to daily operations can stand in the way of collaboration toward shared goals. We know, objectively, that collaboration can lead to bigger wins for all parties in-

volved, but whether it’s because of incen-tives, tradition, or just not enough hours in the day, time and time again we work only in our own self-interests.

But we aren’t prisoners in these towers we have built for ourselves; we have the ability to communicate and co-operate to maximize our combined outcomes. It requires flexibility, it requires patience, and most importantly, it requires leadership. Someone must stand up and establish a vision for what success looks like. Someone must align their team to work together in a single direction. Someone must reach across the table and declare their intentions to create mutual, sustainable growth. This is Category Leadership, and this leader-ship is increasingly imperative to CPG and Retail success.



ANTICIPATING CHANGE IS CRITICAL It has never been more difficult to predict where the market is head-ing—investing in the right areas for growth cannot be left to chance.

Consumer preferences rapidly evolving

Retail landscape increasingly fragmented

Explosion of shopper choice

Amorphous and personalized paths-to-purchase

TECHNOLOGy ACCELERATES CHANGETechnology is rapidly evolving how companies go to market. “Today is the slowest pace of change we will ever experience in our lives,” says Chris Almeida, Senior Director of Marketing and Store Experience at CVS Health. “Mobile went from an afterthought to creating heads-down shoppers with access to anything, anytime, anywhere.”

24/7 access to information & commerce

Real-time behavioral data

Micro-targeting of shoppers

AI-enabled 4P automation

IMPOSING MARKETPLACE CHALLENGES Amidst this unpredictable march to the future are the very real demands of modern life challenging CPGs and Retailers to sustain competitive ad-vantage and growth.

Growth deflated by declining trips and loyalty

Margin pressures shift focus to costs & productivity

New competition across platforms & channels

Designing & executing strategy more complex

Why Category Leadership is Needed Now More Than Ever

CPGs and Retailers may not face such overt threats as Machiavellian prison wardens playing games with their futures, but the uncertain and evolving marketplace is forcing them to take action:

The world is too big now to maintain a narrow viewpoint. It is vital that organizations have a cohesive understanding and perspective of the world. “Manufacturers need to deliver value beyond the transaction of goods and services,” explains Greg Brewer, Managing Director of Category Leadership at Nestlé Purina Petcare. “Whether it’s aligning busi-ness strategies, translating trends into future growth opportunities, or providing customized, unique solutions, bringing this value to retailers will be a significant point of differentiation.”

Manufacturers have an opportunity to lead in the Category Leadership space. They can leverage technology and big data to create powerful insights. They can harness rap-id change to drive game-changing innovation. They can transform market challenges into market impact. They can do all of this by committing to Category Leadership.


A New Model of Category Leadership

Category Leadership delivers multiple important benefits. It establishes a shared vision for suppliers and their retail partners, it elevates transactional relationships to strategic partnerships, and it drives mutual success. Category Leadership is built on three core tenets: Insights, Innovation, and Impact. These are the forces that drive com-petitive advantage, unlock growth, and form the foundational elements that shape the Category Leadership Framework.

Successful Category Leadership is universally fueled by insights and trends. The infor-mation available today is overwhelming, from consumer insights and shopper behaviors to market performance and technological data. Making sense of that information and distill-ing it into insights—robust ideas that drive action—is the first task in Category Leadership.

Actionable insights are only half of the equation. Insights must be synthesized into for-ward-looking trends that predict what will be relevant in the next few years. Trends should draw conclusions from a reasonable set of assumptions and, most importantly, represent a company’s willingness to plant a flag in the ground and declare “this is what the shopper will want in five years,” or “that is what retail will look like in 5 years.” This bravery is invigorating to retailers awash in a sea of their own shopper card data and with visibility to little else; they seek this foresight from their supplier partners.

Category Leadership is built on three core tenets:

Insights, Innovation, and Impact

Insights and Trends


Category Vision and Growth Drivers

insights and trends help create the category vision and supporting growth drivers. Imagine that data is sunlight—the first job of Category Leadership is to hold up a lens and focus that light into something tar-geted and useful. Build insights, then trends, and, finally, focus so clearly that all that is left is a single, white hot beam. This focused light is the category vision: a rallying point for the organization.

The vision is an objective story about the future of the category. It is important that the vision be objective because data can be manipulated to tell any story the user wants to tell. This is not a vision for what best serves brands, but a vision for where the category can and will likely be in the future. Further, this is not a narrow vision only for the areas in which the organization competes—it is a vision for the whole category. This also means inputs have to be category-lev-el: category-level insights and category-level trends will shape the category vision.

is bolstered by category growth drivers. Caprē Group defines growth drivers as the big forces that will determine the choices of retailers and manufacturers in the future; the core factors that will influence growth in the category whether or not the supplier or retailer chooses to acti-vate against them. In other words, the Health & Wellness movement will be shaping con-sumer preferences over the next few years, whether or not a supplier adapts its ingre-dient profile to meet those prefer-ences. The trend toward Personalization will change shopper behavior over the next few years, whether or not a retailer leverages its dataset to provide customized experiences in the store. Category Growth Drivers guide the organization and its partners toward the vision and demonstrate how to ignite growth in the future state.

It is critical to get the vision and growth drivers right, because the vision is the back-bone of Category Leadership. As the beacon of light for the entire organization to rally behind, this unified point of view will guide strategy both internally and externally for years to come.

Focused The vision

The category vision should be a rallying point—

aspirational and inspiring to the organization

and its partners

DEFINING A CATEGoRyCompanies have leeway to define their category, and give themselves permission to activate in new areas.

For example, a chocolate company can de-fine its category as confection (the majority of their portfolio today), or it can define their category as snacking (allowing for innovation and experimentation all across the store).

The category vision should be grounded in reali-ty, but it should also be aspirational and inspiring to the organization and its partners.


Who could have anticipated a shake-up in laundry detergents? By 2012, sales growth, volume, and price had been flat for years. With household penetration already high and most users already converted to the liquid form, what shopper would pay more or add more loads of laundry to their weekly routine?

Tide foresaw this opportunity and, more importantly, took action upon it. The market leader in laundry detergent and a flagship brand for Procter & Gamble, Tide created a revolutionary new product innovation to disrupt its own category and change the way households could do laundry forever.

Tide PODS, a single-dose laundry detergent solution, were born from a core insight: today’s shoppers needed more help in the laundry room. Lives were busier and

liquid detergents were a hassle (and who ever knew the right amount to use, anyway?). Tide built a product that brought convenience and efficiency to

laundry routines, and advertised it as “the ultimate perfect dose.”

In a category that did not outwardly appear in need of innovation, PoDS would push category growth beyond expectation. Shopper conversion was high, and according to P&G, 97% of Tide PODS users

were satisfied with their experience. A robust consumer study revealed the product appealed to a wide variety of shopper segments—from conve-

nience-seekers attracted to its simplicity to cost-conscious shoppers attracted to its promise of less waste—and that these shoppers were willing to pay more for this

value. And because the lightweight product dramatically reduced shipping costs, Tide PODS could proudly boast a significantly higher margin than competitor solutions.

Category Leadership had direct impact on Tide’s performance. According to Advertising Age, within just a few months of the PODS launch Tide sales were up 9% and the brand held a dominant 73% share of what was then a $300 million “laundry pod market” across Walmart, club, and dollar stores. That was just the beginning: esti-mates predict laundry pods will represent $32 bil-lion in global sales by 2020.

Tide transformed insights into a vision for its catego-ry, used that vision to drive internal innovation, and created a “triple win”: Tide won market share, retail-ers saw growth and margin in a historically flat cate-gory, and consumers gained a better laundry experi-ence. It seems big things do come in small packages.

Igniting New Growth Where There’s None to be FoundCase Study: Tide PODS

Source 1: “Tide Pods Winning $7 Billion Detergent Wars By Redefining Value” by Jack Neff. Source 2: “Concentrated Liquid Laundry Detergent Market Amount to Reach 32 $Billion by 2020” by Gos International Inc. Tide Pods Logo is a registered trademark of The Procter and Gamble Company used for editorial purposes.Tide PODS Shelf Image by Mike Mozart.


Internal Strategiesof Category Leadership

emerges when internal strategies align around the vision and inspire product and non-prod-uct innovation throughout the organization. This innovation leads to new opportunities, new ways of thinking, and, ultimately, new pathways to growth.

Internally, organizations must make stra-tegic choices, and it is essential that these strategies are in lockstep with the catego-ry vision and the factors driving future growth. This strategic alignment ignites in-novation in everything from product devel-opment to operations.

Marketing will innovate to align its approach-es with the vision, from brand positioning to implementing new communication vehicles. Finance will build new forecasts that incor-porate growth drivers to better predict the category’s future performance. The vision can even spotlight new M&A opportunities, as the company looks to jumpstart competitive ad-vantage in the future state.

“As the world’s largest healthcare company, we need to leverage our expertise and in-sights to innovate new patient and shopper

experiences,” says Geoff Betrus, Senior Director of Shopper Solutions at Johnson & Johnson. “We now operate differently as an enterprise; because patients, shoppers, and consumers are one and the same, we have to collaborate internally to build co-hesive strategies that result in totally new experiences for patients and shoppers.”

The value

Internally, failures to execute Category Leadership are often systemic to siloed corporate structures or short-term thinking. • Limiting return on investment by not linking plan-

ning, strategies, or tactics to the category vision

• Making merchandising decisions based on short-term financial benefits, and not based on relevant growth drivers

• Maximizing trade dollars and margin at the ex-pense of implementing true category-expanding initiatives and innovation

• Leaving all the work to Category Managers, in-stead of adopting an organization-wide responsi-bility to be stewards for the category

INTERNAL CATEGORy LEADERSHIP FAILURES



External Strategies and Planning

and manufacturers also need to build external strategies that enable them to win with their partners in the future context of the category. This where the final tenet of Category Leadership—market im-pact—comes to bear.

How do external strategies create market impact? By aligning investment choices to secure shopper acquisition and loyalty. By determining the when, where, and how prod-ucts should activate along the path-to-pur-chase. By understanding the shopper’s path to purchase, and how that path will change in the category future state. And most impor-tantly, by using the vision and growth driv-ers to set up a collaborative plan for success. Companies are looking to their partners for help to understand where the marketplace is heading—Category Leadership provides that expertise and lays the groundwork for delivering mutual growth.

According to Dale Clark, Senior Director of Sales Strategy and Shopper Engage-ment at Hershey, “the biggest challenge is to deliver impactful retail solutions as retailers continue to differentiate from each other. Ten years ago, executing national programming was efficient, because ‘one size fit all.’ Now that retailers request a great deal of custom-ization in their programming, merchandis-ing, and even product packaging, we have to place much more emphasis on collaboration and communication with our retail partners. Driving both sales and resource efficiency should be our collective goal.”

processes anchored on the vision and growth drivers connect across strategies and ensure internal constit-uents and external stakeholders are united in their approach to unlocking new growth, from upstream innovation and brand plan-ning down to joint business planning.

Retailers Strong planning


Externally, Category Leadership strategies fail when they lose focus on driving mutual growth.• Defining strategies without clearly understanding

shopper needs within the category and store

• Focusing on metrics that drive immediate gains at the expense of long-term success

• Manufacturers force retailers to adopt the ‘latest and greatest’ initiatives without connecting these platforms to a higher purpose or vision

• Too much focus on the negotiation instead of the partnership, taking on a ‘how do I win?’ attitude instead of exploring ‘how do WE win?’

EXTERNAL CATEGORy LEADERSHIP FAILURES


that adopts this model of Category Leadership will realize a number of benefits once internal and external strategies focus on the same goal: leveraging the category growth drivers to win the in future state of the category.

Why Category Leadership?An organization

Improve Innovation Success Rate Innovation has a better chance to succeed when aligned to the category future state and internal and external partners are united behind the concept.

Prioritize Resource AllocationGain a clear view of the factors that will shape the future complexion of the catego-ry and prioritize investment accordingly.

Increase Organizational Productivity Not only is work more efficient and effec-tive when aligned to a shared future vision, but resources can be stretched further and make more impact.

Boost Differentiation A manufacturer fully committed to Cate-gory Leadership uniquely elevates its voice among its partners; it also fuels customized strategies that help retailers differentiate themselves versus their competition.

Drive Shopper Conversion and Loyalty Growth drivers often reflect how shop-pers are changing their attitudes and behaviors; alignment to these factors en-sures stronger shopper engagement.

Optimize Space UtilizationThe shelf is a finite resource—a multi-year category vision provides a plan for evolving the shelf assortment from to-day to tomorrow’s future state.

Internal Benefits External Benefits


can struggle to practice effective Cat-egory Leadership. What factors impede companies from im-plementing an impactful Category Leadership program? In-ternally, failures to execute Category Leadership are often systemic to siloed corporate structures or short-term thinking. Externally, Category Leadership strategies fail when they lose focus on driving mutual growth.

The pernicious root of these failings is incentives. Companies often incentivize employees to focus on growing share versus growing the category. Whatever logic is established to sup-port a category-first mindset is invalidated when incentives promote the opposite behavior.

In Virgil’s The Aeneid, readers encounter the famous story of the Trojan Horse. “Do not trust the horse, Trojans!” it was said. “Whatever it is, I fear the Greeks, even bringing gifts.” This quote exemplifies the biggest impediment to successful Category Leadership: using Catego-ry Leadership to drive one’s own benefit. Taking on the false veneer of a category-first mind-set as a means to achieve brand goals is no different than the fabled Grecian ruse during the Trojan War. Category Leadership opens doors and elevates conversations between suppliers and retailers, but taking advantage of that good faith to promote one’s own agenda under-mines all Category Leadership efforts.

Shifting the mindset to Category Leadership requires a wholesale cultural change, from brand to sales to leadership to HR. The expectations and incentives must truly align joint ob-jectives and mutual growth, or neither side—supplier nor retailer—will meet its full potential.

What Impedes Category Leadership?

organizations

The biggest failure of Category Leadership is when organizations use the approach as a trick to drive their own self-interests;

shifting the mindset to Category Leadership requires a wholesale cultural change.



When Kodak filed for bankruptcy in January 2012, the reason was clear without reading beyond the headlines: digital photography had killed Kodak. But few understood just how well positioned Kodak had once been to lead the digital revolution that eventually toppled it. After all, a Kodak engineer invented the first digital camera in 1975. He still recalls his management’s reaction at the time: “that’s cute – but don’t tell anyone about it.”

In life and business, few are granted second chances, but Kodak was again given the op-portunity to lead the category. A few years later in 1981, a Kodak study predicted digital photography would replace film in approximately a decade (it was remarkably accurate). Kodak had 10 years to innovate and lead its category into the next century, but ig-nored the call. Instead, Kodak continued to invest in film technology, squandering its chances to redefine the category before it redefined them instead.

Kodak had valuable insights and the gift of time to act upon them; why did it wait 20 years to start transform-ing its business? The photography giant had hoped their century-old cash cow would live forever, even ignoring its own history of innovating to stay ahead of the technol-ogy curve (once with dry plate film and again with color film). By not embracing digital as a growth driver, Ko-dak failed to align its internal strategy with external realities in the shifting photography category landscape, and in turn never captured that growth once this new technology proliferated.

Kodak also missed an opportunity to enhance its relationship with retailers. The Photo Department was once a strong revenue driver for many

Food, Drug, and Mass retailers, and Kodak was a key partner in driving this section’s growth. Kodak could have leveraged its insights to transition the Photo Department to be more digital-ready sooner, and ensure that shoppers on the front end of the adoption curve were rewarded with a posi-tive experience. Instead, its retail partners had to turn to other manufacturers for Photography insights or learn harsh lessons about the digital revolution on their own.

Kodak lacked an insights-led vision to move the category forward. Or perhaps, the vision was just like its photos, frozen in time and stuck in the bygone days of film.

Lead or Be Led (to Bankruptcy)Case Study: Kodak

Source 1: Mui, C. “How Kodak Failed” Forbes Online. http://www.forbes.com/sites/chunkamui/2012/01/18/how-kodak-failed/ Accessed August 2016. Source 2: Kodak Annual Revenue. Kodak is a registered trademark and used for editorial purposes. Camera image is by Steve Harwood.


Category Leadership Capability

© 2016 Caprē Group

A Category Leadership Capability: What’s Needed to Lead the Way

does not occur naturally; it is a organizational capability that enables insights creation and application, supports, supports vision development, and ensures consistent, cohesive strategy. As with any capability, Category Leadership begins with a commitment from executive manage-ment to allocate resources to building a dis-ciplined approach that drives competitive advantage.

A capability starts with a strong process that serves as the foundation to driving Category Leadership consistently and effectively. But a process is only as good as the dedicated, for-ward-thinking people, relevant insights, and helpful tools that bring that process to life.

Category Leadership

16 Lead, Don’t Manage

INTERNAL, ExTERNAL, oR BoTH?The Category Leadership model recognizes that the Vision and Growth Drivers influence both internal and external strategies. While a strong Category Leadership capability will address both sides, an organization’s priorities may drive initial focus in a single area to start; perhaps innovation needs an immediate jumpstart, or maybe improving suppli-er relationships is a must. With this in mind, the capability elements described here are color-coded: those that impact internal strategies are blue; those that most apply to internal strategies are blue; those that most apply to external strategies are orange; and those that influence both sides are red.


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Defined Vision & Growth Driver Process

The organization needs a process that defines how to, when to, and who will synthesize trends, create growth drivers, and establish the category vision. Critically, this process must also maintain foresight, continuously evolving the vision and growth drivers as market dynamics shift and new insights emerge.

Multi-year JBP Process

With external partners, organizations must build a process for long-term Joint Business Planning that establishes a shared vision that drives collaboration, prioritizes mutual growth opportunities, and inspires and rewards all stake-holders. This collaborative partnership is a platform for all future external Category Leadership strategies.

GREG BREWER AND NESTLé PuRINA recognize the need for a Multi-year JBP Process. “We have always had a focus on shared value, but have increased our emphasis and discipline around a comprehensive, joint planning process with the retailer—and scorecarding our suc-cess along the way. It’s about aligning to growth strategies up front, defining initiatives to achieve that growth, and then tracking KPIs so we can course correct when necessary.”

Borderless Work Environment

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Success Measures

The people involved in executing these internal and external strategies will need defined roles and responsi-bilities in the new Category Leadership ecosystem. It may also be necessary to broaden their competencies to operate with a category-first mindset.

Defined Roles and Broadened Competencies

KPIs and other success measures create accountability for external strategies. Category Leadership excels when success measures align to category goals. This means partnering with retailers to identify the best metrics to in-dicate success, and also linking these category growth metrics to incentives that motivate teams.

Process: Creating the process is the first step every Category Leader must take, setting the groundwork for planning and aligning efforts across the company and its partners.

People People: The Category Leadership Process sets the groundwork for success, but will be ineffective if people are not aligned and incentivized to execute it.

Silos must be knocked down to empower Category Leadership. Removing organizational borders enables people and teams to communicate and function freely in the broader ecosystem.

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Shared Vision and Resource AllocationBoth processes must ensure that the Growth Drivers are foundational to any planning and development cycles—not only vision creation and JBP, but all processes that impact the organization’s internal or external strategies. This includes everything from brand planning and innovation, to shopper marketing and trade funds.

Additionally, the Category Leadership process must allow the nimble allocation of resources. Innovation and mar-ket impact can be planned, but compelling category opportunities may also arise sporadically. Processes should support a flexible flow of resources to these opportunities.

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Businesses draw from scores of data to build insights that grow their organization, but the art of Category Leadership is converging these consumer, shopper, and market insights to identify growth drivers that create a holistic view of future category growth.

A Strategic Blueprint© is a simple yet powerful tool that can be used to focus insights into actionable growth drivers. Blueprints require an all-hands-on-deck approach that brings cross-functional stakeholders together to create impactful solutions that have upstream and downstream alignment in the organization.

Robust, Insights-Led Growth Drivers

Strategic Blueprint©

Robust, relevant insights lead to category growth, and are derived through a continuous, methodical collection and synthesis of data.

Insights Insights:

Before an organization can embark on its Category Leadership journey, it needs to have the right suite of tools to support its efforts.

Tools:

Growth drivers should not stop at the category level. All external partners have unique objectives, shoppers, and market forces shaping their category situation. Recommendations should be fueled by tailored insights custom-ized for these partners’ unique priorities.

Tailored Retailer Insights

Advanced Real-Time Analytics

There are a number of effective tools to enable category growth. A sophisticated sizing tool can measure the impact of the growth drivers for both a supplier and its retailer partners. Instituting a scorecard complete with category metrics keeps teams accountable and maintains focus on the vision. Finally, a comprehensive knowledge management system will continuously capture, categorize, and share insights throughout the organization.

Category Growth Enablers

Advanced Analytics empower organizations to harness the data-rich environment around them into impactful external strategies with their partners. A Category Leader should continually strive to push the outer limits of its knowledge base. Breaking through these boundaries requires an investment in dynamic, real-time data and the tools necessary to learn from it.

Tools

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“THE CoNVERSATIoN over the last few years has moved the consumer toward the center of all we do,” shares Chris Almeida (CVS Health). “Now we have to accelerate that thinking as social media and peer reviews become more important to her decision-making. This is why we work with our manufacturers to always start with the ‘who’ and the ‘why,’ shifting the paradigm from retailers and brands pushing their messages to one that engages with her in the most contextually and emotionally relevant moments.”

Creating customized insights and holistic category growth drivers require building a fully-integrated joint research plan that answers insights questions across sales, marketing, innovation, category management, and other cross-functional areas to illuminate a full category perspective.

Integrated Category-Level Research Plans

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Impact, Inc. is a market leader in a growing but rapidly changing industry. Impact is home to a tremendous portfolio of brands, and its culture reflects that. There is no inherent wrong in promoting a strong brand focus, but the side ef-fects can be damaging. In Impact’s case, retailer partners be-came frustrated that their market leader’s new ‘innovations’ and platforms only delivered market share, and not category growth. They had become myopic, missing important cat-egory trends and undermining objectivity.

Impact learned this firsthand when its Advantage Survey ranking for “Trustworthiness” fell precipitously in a single year. There had been a growing niche of innovation in their category, but because none of Impact’s brands were competing in this space, the innovation was ignored or downplayed in client conversations. Now, that niche seg-ment was the fastest growing in the category, and competitors were touting their ability to grow the category—while Impact remained si-lent.

The company’s eyes were open, and Impact took action to reestablish their leadership in the category. The CEO took Category Leadership on as a top mandate and demanded rapid results in time for customer planning conversations later in the year. Rather than delay to rebuild a more category-specific insights arsenal, the team leveraged existing in-sights to build category growth drivers as fast as a possible. These drivers were imperfect, but helped repair retailer relationships. The team deployed the drivers in less than three months (then immediately went to work on building stronger and more actionable growth drivers for the following year).

In less than twelve months, Impact had redesigned its sales and marketing organization, established strong category leadership processes, built a number of field-ready toolkits, and augmented its learning plan to incorporate category-level insights questions. The new capability drove greater internal alignment, and customer teams were ex-cited about having new category-focused tools to deploy with their accounts. Most importantly, with trust reestablished, customers were again asking Impact to serve as Category Captain and provide strategic input on prod-uct assortment and store layout. Impact, Inc. had regained its leadership, and proved true the old adage that it is never too late to change.”

Caprē Group frequently has the firsthand opportunity to witness leading organizations undergo radical change. One such organization identified its struggles to lead its category and took action to adopt a new mindset and implement a Category Leadership capability; its journey is described below. Out of respect to client confidentiality, identifying details have been changed or removed. For the purposes of this case, the client will be referred to as “Impact, Inc.”

A Major CPG Changes Its Destiny Through Category Leadership

Case Study: Never Too Late:


Assess Where you AreTo write a roadmap to Category Leadership, know first where you are. Perform a non-bi-ased assessment of the organization’s Category Leadership capability (or lack thereof) to identify strengths and high-light opportunities.

Define & Prioritize Opportunities For many organi-zations, the list of Category Leadership ‘gaps’ will be long. The team should define the scope of these opportunities for improvement and map out what it will take to improve. Iden-tify where to begin by prioritizing the oppor-tunities based on level of impact and speed of implementation.

Leverage Momen-tum and Scale Up After several small wins the new Category Leadership capability will have momentum. Leverage this quickly, before attention and urgency fades. Recruit more team members, garner support for larger initiatives, and rapidly scale the new capability.

is an integrated, seamless capability in which everyone in the organization commits to a category-first mindset. But aligning a large organization to build a new capability takes time, and often requires executive stewardship to foster (and sometimes mandate) the change. In the meantime, regardless of function and role, change can start today:

In an increasingly complex and challenging world, Category Leadership is becoming the new standard for how successful organizations operate and create sustainable, mutual growth for themselves and their partners. By harnessing insights, driving internal align-ment and innovation, and creating category-focused impact, Category Leadership goes far beyond a simple vision for the future—it is a foundational change in how organiza-tions go to market.

The Path to Category Leadership: 5 Steps to Get Started

Category Leadership

Category Leadership goes far beyond a simple vision

for the future—it is a foundational change in how organizations

go to market.

2.

3.

4.

5.

Enlist Change Agents Every organization has strong team mem-bers that influence decisions and drive action. Bring these leaders into the fold! Recruit these “change agents” to support and even participate in building the new Category Leadership capability.

Show Impact with Small Wins Creating impact is im-portant, but proving the concept quickly is essential. From the prioritized list of opportunities, adopt those that are more certain to create im-mediate improvement. Once success and momentum has been achieved, share the results far and wide to bolster Category Leadership support.

1. 2. 3. 4. 5.


15 years, Caprē Group has helped many leading manufacturers and retailers build category-focused capabilities and platforms. According to one CPG Sales Leader, “Caprē Group transformed the planning and sales process for the entire company. Their impactful process and highly-engaged training helped our organization become partners with our retailers and drive robust and sustainable category growth. I would highly rec-ommend Caprē Group to any supplier looking to establish a Category Leadership voice.”

Caprē Group customizes its proven approach to address clients’ unique situations, from designing visions and identifying growth drivers to applying insights and piloting innova-tive capabilities with customer teams, and training the organization on the competencies needed for best-in-class Category Leadership. Regardless of client need, Caprē Group is always focused on delivering quantifiable results:

Frozen FoodsLeading frozen food manufacturer integrates category shopper voice into customer planning• Developed multi-year Category Vision identifying growth opportunities and challenges by leveraging insights, trends, and retail & shopper dynamics

• Built best in class Category Stories that estab-lished leadership voice and enhanced strategic partnerships with customers

BeverageLeading beer manufacturer leverages wealth of insights to identify growth drivers impacting the category• Identified Insights-led vision for Beer category, created and sized Growth Drivers, and linked to occasions in priority channels

• Leveraged Strategic Blueprint and Activity Calendar to define and prioritize occasion-specific growth driver strategies

HealthManufacturer realigns when priority retailer

shifts focus to health & wellness viewpoint• Developed retailer-defined Best Practices and facilitated Team Trainings to deepen knowledge of shoppers and shift category to health

• Transformed relationship with retailer invoking new Segmentation Strategy to build and deploy wellness-focused programs

The Look of Success

For over

Pet CarePet care manufacturer challenged itself to become a more prominent voice in a crowded marketplace• United the organization around an Aspirational Pet Care Vision that brought new consumer relevancy and reestab-lished the unique benefits of the category at retail

• Created Customer Team-Ready Toolkits to deploy vision, trends, new item strategies, and customer-spe-cific size of prize calculations


Caprē Group I 115 Perimeter Center Place I Suite 1120 I Atlanta, GA 30346 I capregroup.com

Declare for Category Leadership with Caprē Group

The views expressed in this work represent the research and expertise of Caprē Group, Inc. Any quotes used with permission. No confidential client information was used to create this work.

is ready to partner with you to develop your organization’s Category Leadership capability. Our experts specialize in working with manufacturers and their external partners to develop a compelling, insights-led vision for unlocking future growth, foster innovation to drive efficiency and delight consumers and shoppers, and create impact through actionable strategies that deliver lasting value across the category.

Our frameworks, tools, and methodologies create scal-ability across teams and build processes and routines that are quickly embedded into your company’s DNA. And because our experts are embedded with customer teams from design stages all the way through train-ing and implementation, we ensure the new capability takes root and evolves in real-time to drive immediate impact on your business.

To begin your journey to Category Leadership, please contact

[email protected]. you can also reach us by phone

at 678.443.2280.

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