Global Trade Quote by Greg Thain
““Total global trade spend is now estimated to be over $125 billion, well above the total profits of the major retailers, and McKinsey estimate it to be typically 30% of an FMCG manufacturer’s cost base, second only to the cost of goods at 40%.1””
About This Quote
Source Report: Global FMCG Trade Spend Analysis, McKinsey, 2023
The amount retailers spend on trade promotions far exceeds their profits and dominates manufacturers' costs, second only to raw goods.
In simple terms: Trade spend dominates costs and profits.
Key Takeaway
Focus on optimizing trade spend efficiency.
Themes
marketing
finance
retail
manufacturing
Mood
analytical
strategic
Type
business
financial
When to use this quote
- budget planning
- price negotiations
- marketing strategy
Key Concepts
cost structure
trade promotions
profit margins
Questions to Reflect On
- How can manufacturers reduce trade spend without harming sales?
- What trade spend levers offer the best ROI?
A Different Perspective
Ignoring spend efficiency can erode margins.
