Unlocking Profitability: Essentials of Trade Spend and Deductions for Growing Food Businesses

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According to Neilsen, 72% of CPG trade spending in 2019 had a negative return on investment. Do you know how your own promotions are doing?

Our webinar with TrewUp was an exciting opportunity for CPG brands to learn from Kyle Barnholt, an expert in trade spending and promotions management. Check out our recap of the session to equip yourself with the tools and insights needed to make smarter, profit-driven decisions for your business. These resources can help you optimize trade spend, reduce unnecessary deductions, and ultimately drive sustainable growth for your brand.

Unlocking Profitability: Essentials of Trade Spend and Deductions for Growing Food Businesses

 
 

Navigating the competitive landscape of consumer packaged goods (CPG) requires more than just great products. For food brands looking to scale, understanding trade spend and deductions is essential. Done right, these financial tools can drive growth and improve profitability. Done wrong, they can eat away at your margins. This article explores how to turn trade spend and deductions into a competitive advantage.

Understanding trade spend and deductions begins with clarity. Deductions, which include promotional allowances, logistics costs, chargebacks, or unauthorized discounts, are often a mix of legitimate business expenses and hidden inefficiencies. Without clear oversight, these deductions can compress margins, obscure operational issues, and lead to missed growth opportunities. Categorizing and analyzing these offsets is the first step to controlling their impact and reclaiming profitability.

Connecting Sales Data to Deductions

When it comes to trade spend, spend data alone only tells half the story. To truly understand performance and profitability, aligning sales data with spend data is crucial. By merging these data sets, brands can:

Why Connect your sales data to deductions? Image source: TrewUP.

  • Reveal spend as a percentage of sales, providing insights into effective and ineffective strategies.

  • Shift resources to retailers that are driving growth or currently underspent.

  • Uncover inefficiencies and hidden costs that may otherwise go unnoticed.

This comprehensive perspective enables businesses to redeploy resources more strategically and make data-driven decisions that directly impact the bottom line.

From Deductions to Trade Spend Insights

Deductions aren’t just expenses—they’re a lens through which trade spend can be evaluated. By scrutinizing deductions, businesses can identify excessive spending, measure the ROI of promotional activities, and fine-tune allocation strategies. This analytical approach transforms deductions from a passive cost into a proactive tool for enhancing trade spend efficiency.

Turning Insights into Profitability

Armed with insights from aligned sales and spend data, businesses can take actionable steps to maximize profitability:

  • Optimize Promotions: Prioritize activities with the highest ROI and eliminate underperforming initiatives.

  • Strengthen Negotiations: Use data to validate deductions and secure better terms with retail partners.

  • Adapt Quickly: Monitor trade spend performance in real-time and adjust strategies based on proven results.

 

Key strategies for MAXIMIZING profitability through trade spend insights. Image source: TrewUP.

 

Common Challenges in Trade Spend Management

Managing trade spend and deductions comes with its own set of challenges. These include lack of visibility, reliance on manual processes, complex retailer compliance requirements, and the constant pressure to maintain profitability. Tackling these obstacles requires not only a shift in mindset but also access to the right tools and insights.

Simplifying Complexity with TrewUp

Common challenges with Trade Spend & Deductions. Image source: TrewUP.

For brands seeking clarity and control, TrewUp offers a solution that simplifies the complex world of trade spend and deductions management. With automated data retrieval, streamlined reporting, and detailed insights into trade spend by retailer and distributor, TrewUp empowers businesses to make smarter, data-driven decisions. By turning financial complexity into actionable strategies, TrewUp helps brands protect their margins and fuel sustainable growth.

Unlock Your Brand’s Potential

Trade spend and deductions, when managed effectively, become powerful tools for growth. By combining detailed insights with strategic actions, your business can turn these challenges into opportunities for profitability. With the right systems and approach, the path to sustained success is within reach.

Ready to take the next step? Sign up for a Free Trade Spend Health Check today and discover how TrewUp can transform your approach to trade spend and deductions management.

Author:

Kyle Barnholt is the Co-Founder and CEO of TrewUp, a platform transforming trade spend management and deductions processing for CPG brands. Before founding TrewUp, Kyle spent over a decade at Hain Celestial in roles spanning retailer HQ sales, distributor management, and leading national sales teams. He later transitioned to a General Manager role with full P&L responsibility, overseeing trade spend, profitability, and budgetary delivery.

Through these experiences, Kyle saw firsthand the challenges of managing trade spend and deductions across both large organizations and emerging brands. This inspired him to create TrewUp, equipping brands with the tools to simplify complex processes, optimize trade spend, and drive growth.