Revenue Growth: It's All About Innovation

Revenue growth from the food and tobacco industry is driven from a wide array of influences. Said factors include the amount of units that a business sells, the company’s ability to expand into new global markets, the costs of production, and lowered manufacturing costs. Said revenue growth is also influenced by specific nations' regulatory structure and by the demand for said product. Along with these factors, the most important factor, in my opinion,  which drives revenue growth is the ability for specific companies to evolve their products in order to appease the needs of the consumer. 

 Although each of the factors that influence revenue growth are extremely important, I felt it was appropriate to take this time to discuss the most important factor of driving revenue growth; the product itself. The most important factor that drives revenue growth is undoubtedly the ability for a company to redefine its product in order to meet the demands of the customer. For instance, if the markets, and the needs of the consumer, are evolving, specific products should also evolve to match the demands of the consumer. If a business refuses to do this, a new company may rise to challenge said business within this industry. Over the last few weeks, many corporations that belong to the food industry have started to alter their product lineups in an attempt to enhance their revenue. 

The first point I will make in this dialogue is taken from a Wall Street Journal article describing the Heinz Company’s ketchup packets. According to this article, Heinz, over the past three years, has been developing a more efficient and user-friendly ketchup packet that will cause consumers less frustration during the ketchup's consumption. The new packets, titled the “Dip and Squeeze Packets," will incorporate dual functionality into the product. As can be seen from the title, the  new packets will allow consumers to either dip food into the container or squeeze ketchup from said packet. The new product, aimed at increasing consumer satisfaction, has already starred to do just that, according to an internal study published by Heinz. However, the increased cost of these packets may be problematic to the corporation. As reported by the Wall Street Journal, “Early tests at Chick-fil-A show the potential cost problems: consumers took more ketchup with the new packets, according to Chick-fil-A surveys of about 50 restaurants over several months. But the survey also indicated that customers strongly preferred the new packets.” Although the new packets may cost more than the old ones, this innovation, in the long run, will aim increase the company's clientele in the future, including the possibility of a contract with McDonald’s. As said packets are rolled out, consumer satisfaction of the Heinz Company may increase due to the businesses innovation and concern for the consumer. In turn, said satisfaction will drive revenue increases for the Heniz Corporation. This market innovation will enable Heinz to meet the demands of the consumer while enticing more customers, and businesses, to use their product;  increasing revenue for the company.

 Heinz, however, is not the only company that is driving their revenue growth through product evolution. In an attempt to increase revenue, Coca-Cola is releasing new sizes of its Coke products to attract customers who are “counting both their calories and their pennies." In order to adapt to the evolution of the new, healthier, American lifestyle, Coke is changing its product lineup in order to drive revenue growth. Although Coke will incur increased costs, like that of Heinz, from higher packaging costs, consumers are predicted to spend more on an ounce of coke in smaller packaging, a factor which will also help to drive the revenue of the business.  Coca-Cola believes that introducing a 12.5 ounce, 85 cent can of soda, will attract a greater number of customers, as it did in Mexico. The strategy Coke is utilizing mirrors that of Coke’s Mexican-based bottling companies, which sell Coke in 30 varying sizes and containers. According to Sandy Douglas, the president of Coca-Cola America, "In the U.S.A., we're really just at the beginning.'' Over the next few years, as Coke continues to evolve its packaging, they will continue to meet the demands of the consumer and give them what they desire. In this instance, it is smaller, cheaper, cans of soda. If implemented correctly, this variation of product will greatly aid Coca-Cola's aspirations for continued revenue growth.

Although every product evolution is not successful, businesses must continue to gauge the opinions of consumers in order to understand their needs. By doing this, businesses can successfully provide a product, or service, which said consumers wish to have. For Heinz, it is revamped ketchup packages. For Coca-Cola, it is varying sizes of Coke that were not previously on the shelves. By adapting one’s product to appease customers, individuals will continue to buy a specific product and possibly, buy this product in a larger amount, or at an increased price, driving revenue growth for the company. Within the food and tobacco industry, companies are continuing to adapt their products, or create new products, that target the needs of consumers. Although there are many factors to driving revenue growth, the most important factor, in my mind, is a company's ability to provide products that customers want, and will consume, in their daily lives. In any industry, innovation is key. Even minuscule changes to a product, including its packaging, can alter consumer satisfaction and increase, or decrease, the demand, and revenue growth, of a specific product.

Information on Heinz was provided by The Wall Street Journal’s Sarah Nausser and can be accessed at : http://online.wsj.com/article/SB10001424053111904194604576578691502178606.html

Information on Cocoa-Cola was provided by The Wall Street Journal’s Mike Esterl and can be accessed at:

http://online.wsj.com/article/SB10001424053111903374004576578980270401662.html