What commercial and organizational solutions can be developed for a tea brand that is extremely well-known on a market but which has been completely unprofitable for almost a decade? With how much effort can you implement them and how long would it take to do this? How long after the implementation can you expect a visible recovery? But at a profit?

In order to be able to answer all these questions, we call on the experience of a turnaround project that we carried out on an international market.

After 7 years of negative profitability, due to an unfortunate mix of low investments, pressure from the competition, weak relationship with distributors and a lack of innovation, the producer of this tea brand, despite a strong presence on other types of products, felt the need to analyze the situation differently and develop a sustainable business model, supported by methodologies, actions and processes that generate and accelerate commercial growth.

When we talk about a market with over 80 million consumers, it goes without saying that the size of a turnaround project is also gigantic, which can lead to resounding failures if the project is not correctly structured in terms of time horizon, methodologies, allocation of resources and pace of development. In this case, the project was divided into 4 stages for maximum impact and minimum duration of business-as-usual interruption:

1. Analysis of the "As-Is" situation and the real impact in business and the design of the commercial growth concept
2. The design and implementation of the Route-To-Market/Go-To-Market strategy
3. Assistance during the transition period, in the Change Management process
4. Validation and delivery to operational 100% of the new business system

The "As-Is" analysis consisted of an extensive evaluation of several elements of the business mix:

1. existing route-to-market policy – analysis of shopper/consumer behaviors, analysis of price and promotions strategy, analysis of account and field management processes, customer satisfaction reports, logistics skills and delivery processes, the entire value chain;
2. innovation strategy
3. marketing strategy
4. the end-to-end sales process
5. capacities and production units

Each of these elements has been analyzed using multiple methodologies capable of highlighting nerve points on the path taken by the product from the production phase to the consumer's table. The methodologies themselves are not new, but the element of success came from their combined use on a complete route.

Thus we are talking about some essential practices:

1. observation visits to stores in various cities
2. correlation of several studies and analyzes of aggregated data requested by marketing research agencies
3. practical interviews of the process and its understanding with a wide range of stakeholders - from merchandisers and store managers to Horeca type premises owners, and from the legal, commercial, financial and logistics functions of the manufacturer to the distributor's KAM teams
4. internal workshops held with the distributor's and the manufacturer's teams
5. testing of hypotheses and ongoing commercial scenarios

At the end of the analysis, growth levers were identified in several business areas:

1. streamlining the RTM model - KA/TT coverage, logistics and distribution partnerships
2. new sources of "value growth" - roles in the existing category, roles of packs, pricing model, coverage
3. the identification of potential joint ventures - in distribution and in the purchase of raw materials
4. optimizing the commercial policy for each category – price policy, investments in promotions and discounts, contractual investments in IKA

The portfolio analysis was carried out on all the channels where the products were present, following both our own products and those of the competition from the point of view of the role of the packs. Thus, growth opportunities could be identified such as:

1. the optimal price for recruitment in category & brand for each channel (discounters, hypermarket, supermarket, mini market, etc.)
2. building dedicated packages on each channel (eg: 30 pcs for discounters, 20 pcs for supermarkets)
3. special promotions for certain types of packs in certain types of stores
4. permanent promotions for the upsize category

Beyond the levers and growth opportunities in various channels, the most ambitious change was the implementation of RTM and portfolio management strategies within the producer's team, not at the distributor. It is what can be called a unique moment, the one in which a manufacturer does in-sourcing on a business model usually intended for distributors, building from 0 the capabilities and the organization in this direction.

Although the risks associated with such a move are not small at all, the operationalization of all the decisions and implemented strategies made this project a real success. The tea brand became profitable for the first time after 7 years, and this at the end of a year of which 9 months represented the development of the turnaround project with everything it entails - analysis, concept design, RTM strategy implementation and portfolio management, separation from the existing distributor, creation of organization and capabilities, work methods, management systems.