A Pricing Analytics Case Study: How a Leading Probiotic Drinks Supplier Devised a Price Simulator That Allowed Them to Set Future Prices

Jul 7, 2018

Summary of the Global Beverage Industry

The global beverage industry includes assorted types of drinks, including soft drinks, bottled water, probiotic drinks, milk and dairy, functional beverages, alcoholic beverages, sports drinks, energy drinks, and juices. Rising concerns about obesity and other improved health awareness schemes are expected to trigger the demand for functional beverages like probiotic drinks while limiting the demand for carbonated drinks at the same time. In addition, growing concerns about other health-related issues are reshaping the future of the global beverage industry. For example, the demand for functional beverages, such as probiotic drinks and energy drinks are gaining popularity owing to their low-calorie content and positive effect on human health.

Industry Challenges

  • E-Commerce: Over the past decade, e-commerce has been a steadily growing trend and businesses across industries have taken advantage of the trend and capitalized on the opportunities it offers. However, the beverage industry has not chosen e-commerce as quickly as the other industries have. This trend could soon change in the coming years as consumers have demonstrated a strong preference for the online shopping of beverages.
  • Inventory: Managing inventory in the beverage industry can be much more difficult than in other sectors. The reason is that many of the products that are sold in the beverage industry are perishable and require exceptional inventory management abilities to prevent wasting large sums of currency from spoilage.

Speak with our analytics experts today to know more about pricing analytics and how it helps organizations implement an analytics-driven approach to price and discount optimization for improving sales and gaining market leadership.

About the Client

A leading probiotic drinks supplier based out of the United States with business units spread across several geographies.

Client’s Challenge

The primary concern of the probiotic drinks supplier was that they had to conduct their business either through distributors or state government agencies due to the regulatory norms prevalent in the US. Additionally, the client wanted to establish a desired shelf price for each SKU, which would also include the distributor price. As a result, they wanted to gain strategic insights on how to optimize their pricing and promotion strategy across the entire product portfolio and ensure maximum margins, leveraging their customer, procurement, and manufacturing data.

Business Impact

With the help of Quantzig’s pricing analytics solution, the probiotic drinks supplier established a centralized and consistent approach to the ongoing setting and managed distributor pricing, which resulted in improved margins.

Additionally, the client gained:

  • Complete visibility on the prices of probiotic drinks, discounts, sales and, distributor segments to the organization hierarchy based on the designation
  • Real-time updates on prices or SKUs along with cost and discount information
  • Maximized margins by computing shelf price based on variables like volume, tax, and supply chain costs

The probiotic drinks supplier also devised a price simulator that allowed them to set future prices based on state, costs, distributor segment, discounts, price, and other variables.

Don’t know where to begin? Request a free proposal to learn about Quantzig’s cutting-edge price forecasting solutions and how they will drive tangible results for your organization.

Pricing Analytics Solution Insights

Quantzig’s pricing analytics helps companies in the beverage industry space to simulate real-world scenarios and see how price changes influence the overall profitability and estimate the volume of SKUs that would be sold. Companies can also implement a more structured approach to promotions that reduce costs.  The pricing analytics solution also aids firms to devise targeted campaigns during different seasons for assorted brands to achieve improved sales across distributor segments.

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