Redseer helped a Global Beverage Company Unlock Profitability in India’s Organised Retail

Executive Summary

India’s organized retail and quick-commerce channels have become an increasingly important marketing route for beverage brands. The terms of trade negotiated with a small set of dominant retail groups can affect brand profitability. A leading global beverage company engaged Redseer to benchmark their organized channel profitability against category and cross-category competitors. Redseer also identified areas where value could be added. The engagement revealed an operating income improvement opportunity in the organized channel, concentrated in a beverage category where headroom was significantly higher than the client’s core business category. 

About the Client

The client is a leading global beverage company with a significant presence in India’s carbonated soft drinks (CSD) and juice categories, with distribution across both online and offline retail channels. 

The Problem Statement

The client’s organized retail business was underperforming its potential in comparison to competitors operating across the same channels. 

The strategic question was: ‘Where exactly is profitability being left on the table with the organized retail partners, and which of the competitors’ negotiating structures could they credibly adopt?’ 

The Approach

We anchored the diagnostic on a four-pronged methodology: 

1. Brand discussions: Conversations with brand managers and key account managers, across the client and its competitor set, to map the full profitability stack, including trade margins, consumer promotions, and marketing spend. 
2. Channel partner discussions: Conversations with category heads and retail-side stakeholders to validate and triangulate brand-reported figures. 
3. Field visits: On-ground visits to retail outlets to observe in-store promotional activity and merchandising execution. 
4. Competitive benchmarking: A profitability comparison across CSD and juice competitors, and across channel partners spanning modern trade, quick commerce, and e-grocery. 

The Outcomes

The diagnostic identified a 4-5% operating income improvement opportunity in the organized channel, structured around three levers:

1. Trade margin renegotiation: benchmarking against competitors’ region-level and pack-level negotiating structures to identify where the client’s own fixed and off-invoice terms could be realigned, particularly in juices.
2. Promotional spend efficiency: shifting a portion of the promotional funding burden from brand to retailer, informed by competitor precedent across comparable SKUs and channels.
3. Off-invoice term capture: surfacing under-utilized levers, including assortment commitments, data-sharing arrangements, and no-return-to-base allowances, already standard practice among category and cross-category competitors.