Revitalizing Market Position for FreshBites FMCG

FreshBites, a well-established FMCG company known for its packaged snacks and convenience foods, is experiencing stagnant sales. While overall demand for snack products remains strong, the company is struggling to grow. Meanwhile, a wave of new-generation, health-focused brands offering organic, low-calorie, and plant-based alternatives has been gaining market share. FreshBites must determine how to respond to this shift and reinvigorate its growth.

Question 1: FreshBites’ leadership has tasked you with diagnosing the reasons behind its stagnant sales. What key areas would you investigate, and how would you structure your analysis?

Good Answer: A structured analysis should cover the following areas:

1. Consumer Trends & Preferences:

• Are customers shifting toward healthier, organic, or low-calorie snacks?

• Has there been a decline in demand for traditional packaged snacks?

• Are younger consumers driving the trend away from legacy brands?

2. Competitive Landscape:

• How much market share have new-generation health brands gained?

• What differentiates these brands in terms of product, pricing, or marketing?

3. Product Portfolio & Innovation:

• Does FreshBites have relevant product offerings in the health-conscious category?

• How does its current portfolio compare to emerging consumer demands and to its competitors?

4. Marketing & Branding Strategy:

• Has FreshBites’ branding become outdated or less appealing to younger demographics?

• How do the new competitors position themselves, and what is their messaging strategy?

5. Sales & Distribution:

• Are FreshBites’ products available in channels where health-conscious consumers shop (e.g., specialty stores, e-commerce)?

• Have partnerships with major retailers shifted in favor of newer brands?

A thorough investigation in these areas will help identify the root causes of stagnation and form the basis for a strategic response.

Question 2: The following graph shows the revenue growth of different snack categories over the last five years. What insights can you derive from the data, and what recommendations would you make for FreshBites?

Good Answer:

Observations:

• Traditional packaged snacks have stagnated, confirming FreshBites’ challenges.

• Organic & plant-based snacks are the fastest-growing segment, signaling a clear consumer shift.

• Low-calorie & functional snacks are also gaining traction, indicating interest in health-conscious choices.

• Premium indulgence snacks (e.g., artisanal chocolates, gourmet chips) are growing steadily, suggesting demand for high-quality, unique products.

Recommendations:

• Invest in product innovation to introduce plant-based, organic, or functional snacks.

• Reposition existing products to emphasize health benefits.

• Strengthen partnerships with retailers and online platforms that specialize in health-conscious products.

  
  

Question 3: The following chart shows the market share trends of FreshBites and several competitors over the past five years. How should FreshBites respond to the increasing competition, and what strategic actions could help it regain its position?

Good Answer:

Observations:

• FreshBites has steadily lost market share, while multiple competitors—particularly premium organic and high-protein brands—have gained traction.

• The overall snack market is growing, indicating that demand is shifting rather than declining.

• Some mass-market competitors have also managed to maintain relatively their position (i.e., legacy competitor 1), likely due to strong branding or effective pricing strategies.

  
  

Recommendations:

Product Innovation: Introduce healthier product lines (e.g., high-protein snacks, plant-based options) to compete with emerging premium brands.

Brand Repositioning: Shift marketing to highlight FreshBites’ natural ingredients and health benefits, making it more relevant to modern consumer preferences.

Omnichannel Distribution: Strengthen digital and e-commerce presence while ensuring strong retail availability in health-focused grocery stores.

Strategic Partnerships: Collaborate with fitness brands, nutritionists, or influencers to rebuild credibility and attract younger consumers.

Question 4: FreshBites is considering launching a premium organic snack line to regain market share. If the current average price per snack pack is $2.50 with a 40% profit margin, and the new organic line will cost 25% more to produce but can be priced at a 30% premium, should FreshBites move forward with the launch?

Good Answer:

Current Profit per Unit:

Cost per unit: $2.50 * (1 - 40%) = $1.50

Profit per unit: $2.50 - $1.50 = $1.00

New Organic Snack Profitability:

New cost per unit: $1.50 * 1.25 = $1.875

New price per unit: $2.50 * 1.30 = $3.25

New profit per unit: $3.25 - $1.875 = $1.375

Decision: The new product yields a higher profit per unit ($1.375 vs. $1.00) despite higher costs. If demand aligns with projections, this could be a profitable move. However, FreshBites should validate market acceptance before scaling production.