Case: Increase revenues by 2x for a D2C foods company

Question

Company sell products like healthy cookies, chocolates, nuts, spreads etc - basically healthy snacking items. They have a website through which they sell and an Instagram page.

The case: the company is looking to double it's revenues from 10Mn to 20Mn within the next 2 quarters. They're looking to do this completely through D2C and product innovation isn't a possibility. What should the company do?

These are all the details that are given. Can anyone help out with what growth levers you'd think of for a D2C foods company specifically?

Thanks!

Answer 1

Before jumping into possible growth levers, it is mandatory to ask some clarification questions:

Does the company have enough spare capacity (or production lines to be made operational or third-party producers) to increase sales?
Is price increase doable?
Is the company targeting to increase EBITDA (and how much) or just wants to increase revenues with no regard for margins?

The above questions are instrumental to solve the case.
However, if your question has the aim just to have some suggestions on possible growth levers (without considering the supply side), here is a list of actions we are analyzing at a SME we own in a similar sector and with a similar goal:

Increase marketing spend (using affiliates, influencers)
Add new distributors, either in new geographies of new end markets (e.g., FMCG vs HORECA)
Create a partnership with Amazon, some specialized websites, or some specialized store
Add new key account manager (or salesforce in general)
Increase prices (if now are low and demand will not be reduced) or reduce prices (if demand is currently high and your prices are high); I would never suggest lowering prices in a real case!
Change payment terms (if your clients have more time to pay you, it is likely you sell more, with the caveat that you see cash much later)
Sell products from third-party producers (potentially also in other categories)
Acquire some add-on (unlikely in two quarters, it depends on how you finance the acquisition) or merge with other companies (same as above)

This kind of case tests both your business acumen and your creativity. My suggestion is to avoid saying crazy things you may regret.

Best, M

Answer 2

Sure. Here just a few ideas, not a complete case answer. If product or service innovation is not an option, the company could:

- acquire more customers (increase customer segments targeted for example targeting customers in new geographies or of other age groups, of other income classes, apply new sales channels such as email marketing)

- sell more products to existing customers (so for example increase ticket size)

- change the prize to maximise volumes

It is usually interesting to look at the customer segments, customer needs, at price at the competitive landscape, improving sales and marketing.