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What is Revenue Growth Management (RGM)? A Data-Driven Strategy for Food & Beverage in 2025

3 minute read

Food and beverage leaders are under constant pressure to balance growth with profitability. Rising input costs, shifting consumer preferences, and aggressive competition make it harder than ever to protect margins while fueling innovation and demand.

Revenue Growth Management (RGM) helps organizations navigate these challenges. Unlike traditional pricing strategies, RGM takes a holistic approach to maximizing revenue through pricing, promotions, product assortment, and distribution. Its goal is sustainable growth, aligning business decisions with consumer demand, market conditions, and the competitive landscape. Today, RGM has evolved from a “nice-to-have” to a critical business capability.

Why RGM is Critical for F&B Today

The food and beverage industry faces mounting pressures that demand a smarter, data-driven approach to growth. This includes:

• Rising costs: Inflation continues to shrink margins as raw materials, labor, energy, and other supply chain inputs grow more expensive.
• Evolving consumer expectations: Shoppers are increasingly price-conscious while also demanding more tailored products and experiences.
• Advances in technology: Emerging tools, including AI, give companies the power to make faster, more precise decisions instead of relying on assumptions.
• Intense competition: With crowded markets, brands must find ways to stand out through targeted channel strategies, promotions, and customer segmentation.
• Supply chain strain: Transportation, packaging, and logistics costs have skyrocketed, requiring companies to rethink how their revenue models account for disruption.
• Shifting retail environment: The rise of e-commerce, direct-to-consumer models, and private label growth continues to change how organizations reach and retain customers.

At the same time, promotional effectiveness is declining. CPG companies worldwide invest about 20% of their annual revenue in trade promotions, yet 59% lose money on trade spending. RGM offers the insight needed to reverse this trend.

Key Pillars of RGM

Leading frameworks now define four key areas for RGM success: pricing, promotions (trade investment), assortment (portfolio/mix), and distribution:

Pricing

Pricing strategies align product value with consumer expectations and cost realities. Using elasticity modeling and market insights, companies can identify where small price adjustments drive both volume and margin.

Example: A beverage brand may use tiered pack sizes to capture both budget-conscious shoppers and premium buyers. Dynamic pricing tools also help respond quickly to inflation or competitive moves while protecting brand equity.

Promotions & Trade

Trade promotions are a major investment, but many underperform. RGM shifts the focus to targeted, data-driven promotions that maximize ROI. Instead of blanket discounts, companies analyze which offers truly change shopper behavior.

Example: A snack brand might find that multi-buy promotions increase loyalty, while big discounts only hurt margins. Scenario modeling helps refine trade terms and strengthen retailer relationships.

Assortment (Portfolio & Mix)

Assortment optimization ensures the right products reach the right channels and consumers. Rather than expanding SKUs endlessly, companies use data to focus on profitable items and streamline complexity.

Example: A dairy producer might scale back underperforming flavors to focus on top-sellers while introducing innovation in fast-growing categories. This approach improves efficiency, shelf impact, and consumer satisfaction.

Distribution

Distribution strategies ensure products are available in the right channels, formats, and locations to meet consumer demand. This means balancing traditional retail with emerging channels like e-commerce, direct-to-consumer, and foodservice. It’s also important to understand which channels deliver profitable growth and which drain resources.

Example: A beverage company may prioritize smaller pack formats for convenience stores and larger multipacks for club stores or online, ensuring each channel has the right offering while controlling logistics costs.

How Consumer Insights Fuel RGM

At its core, RGM is about understanding what consumers value, how they behave, and how they respond to pricing and promotions. Success depends on monitoring:

• Price sensitivity and elasticity
• Purchase behavior and patterns
• Promotion responsiveness
• Channel preferences
• Brand loyalty and switching behavior
• Consumer demographics and psychographics
• Sustainability trends and ethical preferences

“Insights enable companies to adjust prices and offers dynamically, ensuring they maximize revenue without alienating their customers,” said Rich Medrano, Revenue Growth Excellence Practice Director at Catena Solutions. “Also, by using data-driven strategies, RGM is more than pricing—it becomes a comprehensive growth strategy that aligns with shifting consumer preferences and market trends.”

With these insights, companies can engage consumers with the right products, at the right price, in the right place.

RGM Process Framework

RGM isn’t a one-time initiative, it’s a continuous journey with five phases:

1. Data Gathering: Collecting inputs across sales, finance, supply chain, and consumer research.
2. Opportunity Analysis: Identifying revenue and margin opportunities using analytics and scenario modeling.
3. Strategy Development: Designing pricing, promotion, and assortment strategies tied to business goals.
4. Execution: Aligning cross-functional teams to bring strategies to market effectively.
5. Measurement & Optimization: Tracking performance, adjusting strategies, and continuously improving outcomes.

How Catena Solutions Supports RGM Initiatives

RGM is more than a discipline, it’s an organizational mindset. And a beneficial one at that: Studies show that companies that embed RGM into their culture report revenue growth of 5-10% annually. Achieving this, however, requires cross-functional alignment.

Catena Solutions can help. We partner with food and beverage companies to design and implement RGM capabilities that deliver measurable results. That’s because we know that in an industry with tight margins, the right RGM approach can be the difference between leading the market and lagging behind.

To explore how RGM can transform profitability in your organization, download our Trends & Insights: The Evolution of Revenue Growth Management report or contact us to get the conversation started.