CPG - An Innovative Solution to Prevent a $300K Write-down
- This leading packaged food manufacturer in Canada was faced with a business challenge when one of their brands, a powdered beverage mix, was abruptly delisted from the exclusive retail customer of these SKUs.
- The company was left with $300K in inventory that had already been produced and packaged. Liquidation was not an option, as the company saw premium potential in the brand within the Canadian marketplace (it was already a market leader in the United States).
- Active purchased the entire inventory, paying the manufacturer the full wholesale value in trade credits ($300K).
- Active worked closely with the client to co-create a distribution plan for the product. They resold inventory to independent grocers in rural areas of the U.S. in a way that protected both the brand and the client’s existing sales efforts in the U.S.
- The client then used their trade credits, in lieu of cash, to pay for a portion of their upcoming media plan, planned by their AOR & executed by Active.
- With Active, the CPG manufacturer was able to prevent a $300K write-down by converting their overstock inventory into a prepaid credit.
- This protected against an otherwise necessary cut somewhere else in the business.
- The client also avoided discounting the SKUs in their competitive marketplace, positioning them well to eventually return the brand to market at a premium.
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