Organization: A mid-sized contract packaging company
Focus: New product launch
Business challenge: The company was interested in diversifying its revenue base away from the traditional contract packaging. The current business was eroding and becoming highly price driven. The company bought a patent to process milk which reduced or eliminated fat and cholesterol without diminishing the taste and operating properties of whole milk (e.g. a gallon of great tasting ice cream with no fat and no cholesterol). The organization was determined to bring this to market by producing its own consumer label of products. The organization engaged Baker Tilly Growth Strategies to validate their ideas and market approach.
The company achieved its revenue goals for the new product in each of the first three years since the product launched.
How Baker Tilly helped: The Baker Tilly team included industry specialists from consumer package goods as well as the dairy industry. The team provided the company with the necessary requirements to successfully launch a product into grocery stores and specifically dairy products. After some research it was clear that the product would fail to meet the requirements for dairy “standards of identity”. The Baker Tilly team then investigated other uses for the process and end product. Through secondary research the team identified that the CPG industry would be an ideal market for the company to sell their product. The product, which could be either in a powder or liquid, could be used as a milk substitute in most if not all milk applications. The Baker Tilly team investigated specific CPG products that the organization could target and then conducted extensive market research to understand how to position the product to drive the adoption and use. Specifically Baker Tilly:
- Collected syndicated research to understand the key trends in the dairy product industry
- Conducted primary research to understand the key buying behaviors of the target market for a the dairy substitute ingredient product
- Defined a set of value statements based on the research
- Tested the value statements through end customer survey with the target market and buyers do determine propensity as well as price premium against their current solution
- Developed an overall new product launch road map and activities
- Based on the market feedback, developed key marketing messages and dependencies
- Developed the overall marketing approach, tools and timing
- Interacted with the company’s creative agency to develop supporting materials
- Defined and developed a licensing agreement and model for dairy producers to manufacture the product
Results: Within the first 6 months of the launch, the company exceeded their revenue goals. They also signed a $1 million deal with the largest manufacturer of ice cream. Over the next 18 months the revenue goals were exceeded and this product now makes up over 50% of the organization’s revenue.