What’s the “point of no return” for distribution losses?

Like, how many points of distribution can a brand lose and still recover?

Michael Kruger & IRI crunched 6 years of scanner data to find out. It covered all food, drug & mass outlets (not Walmart) for 298 categories and 10,818 brands. They only looked at brands with >30% distribution in year 1.

Then for all the brands that declined (but didn’t die) within 3 years, they measured how many were able to recover.

Turns out, the point of no return is pretty quick. With a 10 point loss in distribution (e.g., from 85% to 75%, or 40% to 30%), a brand’s odds of recovering sink to 11%. Ouch.

And with a 20-point loss, you’ve only got a 6% chance of recovering. So only 1 in 17 brands seem to come back from a 20-point drop.

Business is tough. Turnarounds are tougher. 

LESSONS:
🍊 Track your distribution losses tightly.
🍊 If you drop more than 10 points, consider radical changes to change course. (Reformulating, new packaging, price-pack architecture changes, etc.)
🍊 If you drop more than 20 or 30 points, throw a hail mary or prepare to cut bait.