Price Pack Architecture: A Strategic Growth Lever for FMCG Resilience and Relevance
In a margin-compressed, inflation-weary world, consumer goods companies must reevaluate nearly every lever of profitable growth.
While pricing and promotion have historically dominated revenue growth management (RGM) agendas, price pack architecture (PPA) is emerging as a strategic imperative — not just for defending margins but also for unlocking consumer relevance, brand differentiation and operational agility.
At its core, PPA is not about pack resizing for its own sake. It is about engineering product formats that align with how consumers perceive value, shop across channels and evolve their usage behaviors in response to economic pressure.
When implemented rigorously, PPA allows brands to expand consumption occasions, capture a higher price per unit and mitigate margin erosion. Roland Berger research shows that optimized PPA can boost EBIT margins by up to four percentage points — even when revenue is only moderately increased.
The Case for Action: Why PPA Now
Inflation has fundamentally reshaped consumer behavior. Shoppers are trading down, shifting toward private label, delaying purchases and navigating omnichannel ecosystems to find value. At the same time, manufacturers face rising input costs, tight supply chains and retailer pushback on price increases. Traditional volume-based growth strategies are faltering.
Enter PPA. When deployed effectively, brands can redefine value without offering deep discounts or margin-destroying promotions. Whether through trial-size formats to encourage new user entry, family-size packs that drive expanded consumption or premium packaging that signals higher quality, PPA provides brands with a toolkit to meet distinct consumer needs and price sensitivities head-on.
Also: Learn how Hershey is bolstering its go-to-market strategy
However, not all PPA strategies are created equal. Incremental PPA — such as basic upsizing or shrinkflation — may provide short-term relief but often fails to deliver sustainable growth. The real opportunity lies in transformational PPA, which involves building new pack formats and price points designed around unmet consumer occasions, emerging channels or differentiated brand experiences.
From Tactical to Transformational: How Winners Approach PPA
An analysis of outperforming CPG firms shows that successful companies treat PPA as a strategic capability embedded within a broader RGM framework. These leaders exhibit a few consistent traits:
Data-Driven Design
Winners use granular data on consumer price elasticity, consumption frequency and occasion-based segmentation to define optimal size, format and pricing strategies. They do not rely on category norms or legacy pack formats — they let the consumer’s willingness to pay and behavior drive design decisions.
Channel-Tailored Innovation
PPA is not one-size-fits-all. Winning companies tailor pack formats and value propositions to fit the economic logic of each retail channel. For example, in e-commerce, bulk packs may increase profitability by spreading shipping costs. In dollar stores, more miniature opening price point packs serve as a critical entry tactic for brand visibility and trial.
Cross-Functional Execution
PPA sits at the intersection of marketing, sales, supply chain and finance. Without alignment across these functions, even well-designed architectures fail to scale. Leaders ensure early and ongoing coordination — particularly with sales teams and retailers — to secure shelf placement, test consumer response and avoid post-launch inefficiencies.
Long-Term Thinking over Short-Term Fixes
Too many brands treat PPA as a reactive lever to combat inflation (e.g., shrinkflation). Winners, by contrast, see it as a structural enabler of growth — one that supports portfolio simplification, unlocks new users and usage occasions and provides sustainable competitive advantage over private label.
Strategic Watch-Outs: PPA Isn’t Plug and Play
Despite the upside, transformational PPA requires deliberate change management. Many CPGs stumble due to:
- Siloed decision-making across marketing, R&D and commercial functions
- Inconsistent data, which limits visibility into margin trade-offs and consumer behavior
- Retailer resistance, especially when pack changes require new slotting fees or merchandising support
- Lack of executive sponsorship, which can stall initiatives before they scale
The shift toward PPA requires leadership to champion experimentation, invest in capability building and commit to cross-functional ownership. Equally important is the need to track and communicate results internally — aligning incentives, KPIs and resourcing with the goals of holistic RGM.
Also: Modern CPG merchandising requires data, AI and meeting the moment
The Way Forward
In today’s economic environment, value is not just a price point — it’s a perception, an experience and a strategic decision. Brands that succeed will not be those that shout the lowest price but those that design product portfolios aligned to real consumer needs, delivered in the right format, at the right price, through the right channels.
Price pack architecture offers one of the clearest pathways to do this. To unlock its full potential, companies must move beyond tactical resizing and adopt a strategic, insights-led and execution-ready approach. For forward-thinking FMCG leaders, now is the moment to treat PPA not as a one-off project, but as a core competency.
Bob Baker is a partner and the head of Roland Berger’s global consumer goods and retail practice.
