The €200K+ Opportunity Hiding in Your Trade Spend Data – Stop Funding Dead-Weight Promotions

The Commercial Problem: Flying Blind Costs Millions

Most F&B producers allocate 15–20% of revenue to trade promotions—that’s €15–20 million for a mid-sized brand. Yet three-quarters of these companies can’t answer a simple question: which promotions actually drive profitable sell-through versus merely shifting inventory to retailer warehouses?

The industry’s dirty secret: promotional decisions are made on gut feel, historical precedent, and buyer pressure. Sales teams celebrate sell-in spikes without visibility into whether products moved through tills or accumulated as forward buying (retailers stocking up during promotions to sell later at full margin). Meanwhile, finance tracks gross spend but not incremental return.

This disconnect between sell-in (shipments to retailers) and sell-out (actual consumer purchases) means brands routinely fund promotions that destroy margin whilst starving high-performers of budget. The technology to fix this exists. The business case is proven. What’s missing is a disciplined reallocation from low-yield to high-yield promotions.

The Metric That Changes Everything: GM per € of Promo Spend

Gross Margin per Euro of promo spend (GM/€) = Incremental Gross Margin ÷ Promotional Spend

This ratio tells you how much incremental gross margin each euro of trade spend generates. Unlike traditional ROI calculations that can obscure performance with percentages, GM/€ gives you a direct, comparable measure across all promotional activities.

For context, the classic ROI formula is:
ROI = (Incremental GM − Promo Spend) ÷ Promo Spend

Therefore, GM/€ represents the numerator of ROI per euro—the actual margin generation before subtracting costs. A GM/€ of 0.35 means every euro spent generates €0.35 in incremental gross margin (a -65% ROI), whilst 1.20 would mean €1.20 return (a +20% ROI). Most F&B promotions operate below break-even, making relative performance more important than absolute returns.

The Maths of Reallocation: From Theory to Profit

Here’s the counter-intuitive truth: you don’t need to increase trade spend or negotiate better terms. Simply moving budget from bottom-tier to top-tier promotions unlocks substantial margin improvement.

The mechanics are straightforward:

1. Classify all promotions by GM/€ performance using 12 months of data
2. Identify bottom 30% of spend going to low-performers (typically <€0.10 GM/€)
3. Reallocate 10–20% of this budget to proven high-performers
4. Calculate incremental margin gain from the improved allocation

Stop celebrating sell-in spikes that mask forward buying; start funding events that lift sell-through at sustainable margins.

Example: The €219K Opportunity

Consider a typical €100M F&B producer with trade spend at 18% of revenue, totalling €18M annually. This budget currently splits across three performance tiers: top performers receive 30% of spend (€5.4M) and deliver 0.35 GM/€, mid-tier performers consume 40% (€7.2M) at 0.20 GM/€, whilst bottom performers absorb the remaining 30% (€5.4M) but generate only 0.05 GM/€.

Reallocation Strategy: Move 15% of bottom-tier budget (€810K) to top (80%) and mid (20%) tiers

Performance Tier   Current Budget   New Budget   GM/€   Current GM   New GM
────────────────   ──────────────   ──────────   ────   ──────────   ──────
Top (30%)          €5.40M           €6.05M       0.35   €1.89M       €2.12M
Mid (40%)          €7.20M           €7.36M       0.20   €1.44M       €1.47M  
Bottom (30%)       €5.40M           €4.59M       0.05   €0.27M       €0.23M
────────────────   ──────────────   ──────────   ────   ──────────   ──────
TOTAL              €18.00M          €18.00M             €3.60M       €3.82M

Result: €219K additional gross margin (0.22% of revenue) with zero increase in trade spend

What Enables the Result: Data Infrastructure That Works

This isn’t theoretical. Leading F&B brands are already capturing these gains using three foundational capabilities:

1. Modern Data Platform
Consolidate ERP, promotional calendar, and POS data into a single source of truth. This is where Volve’s approach to modern data platforms becomes critical—without clean, integrated data, you’re guessing.

2. Sell-Out Visibility
True promotional effectiveness requires measuring actual consumer offtake, not just shipments. Daily POS feeds from key retailers provide the granularity to separate genuine uplift from forward buying.

3. Organisational Alignment
Sales, marketing, and finance must share definitions, metrics, and governance. Create a monthly “Promo Performance Review” where GM/€ drives budget decisions, not whoever shouts loudest.

Implementation Roadmap: 30–60 Day Sprint

Days 1–15: Data Foundation
Start by auditing your current POS coverage—aim for at least 60% of revenue to ensure statistical validity. Map your promotional calendar to shipment data, then calculate baseline and uplift metrics for the last 12 months of activity. Complete this phase by classifying all promotions into GM/€ quartiles to identify your performance distribution.

Days 16–30: Pilot Design
Select 2–3 key accounts for testing where you have strong relationships and good data quality. Model reallocation scenarios at 10%, 15%, and 20% to understand the potential range of outcomes. Align with your sales team on execution details and establish weekly performance tracking to catch issues early. This preparation phase is critical—rushing into reallocation without proper design typically fails.

Days 31–45: Pilot Execution
Implement the reallocation for your next promotional cycle in the selected accounts. Monitor daily POS feeds for early performance indicators and be ready to adjust quickly for any out-of-stock situations or execution issues. Document learnings systematically and refine your approach based on real-world feedback. The pilot provides proof points that will be essential for broader rollout.

Days 46–60: Scale Planning
Analyse pilot results to build concrete ROI proof points for executive buy-in. Develop a comprehensive rollout plan covering all key accounts with phased timing to manage risk. Create the governance structure and KPI dashboards that will sustain the programme long-term. Most importantly, secure executive sponsorship for full implementation—this transformation requires leadership commitment to overcome organisational inertia.
Quick wins matter: even partial reallocation in top accounts can deliver five-figure monthly improvements whilst you perfect the approach.

The Path Forward

The maths is clear. The technology exists. Leading practitioners have proven the approach. What separates winners from wishful thinkers is execution.
F&B brands that master promotion ROI measurement and reallocation consistently outperform their markets. They fund fewer, better promotions that drive genuine consumer demand rather than retailer inventory games.

Book a 30-minute discovery to test your reallocation upside and receive our Trade Spend Optimisation Calculator. We’ll analyse your current performance mix and model potential gains using your actual spending patterns.