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Many food production businesses succumb to the challenges of manufacturing, marketing and maintaining an extensive product portfolio. Familiar outcomes include cost overruns, poor return on investment into plant and equipment, brand identity crises, and food safety risks from unhygienic factory layouts, among other concerns. When a consumer is faced with half-a-dozen versions of what is essentially the same thing, they’re more inclined to turn away. It’s like being in a restaurant with a long menu—there’s too many you like the sound of and it’s too hard to make a decision when there’s nothing to say what really is the most delicious.

One of those most helpful pieces of data a business can have is knowing the costs to produce each item in their product portfolio. With that kind of information, it very quickly becomes clear when a product isn’t performing; the next step then, is to understand why. Unfortunately, many business owners aren’t empowered with that knowledge. When you’re equipped to understand the performance of your product portfolio better, you can invest more wisely and compete more effectively.

Portfolio optimisation is about paring the restaurant menu back to it’s fundamental items. Only the dishes that connect with the story of the restaurant and who you are as a consumer are allowed to appear on the menu. Only the dishes we can present at their very best, even with minimal resources. These are the restaurants that survive competition because they’ve connected with consumers through service rather than a transactional and undervalued product exchange. When you reduce the distraction of an overblown product portfolio, you can redeploy capital into manufacturing innovations and after-sales service improvements. According to McKinsey, these are just two areas of investment companies need to make, if they wish to succeed in a global market.

So, how does a business optimise a product portfolio? You must first understand the production workflows for each item, and the costs of every step, both financial, and in terms of time and effort. Areas of waste and overlap emerge, and you’ll have gathered the data to better understand the value of every item in your portfolio. From there, you can focus your brand and develop a sustainable strategy. You may find that some of your products won’t make the cut. But the good news is, you’ll know exactly where to reallocate those resources next.

Contact us for a portfolio assessment today.