A generation ago, a student night out in the UK followed a familiar route: the pub, then the club, then a late-night kebab. Today it often begins with pre-drinks in a shared flat, ordered through a delivery app. For a drinks brand, one evening now crosses on-premise, retail and digital channels, which many commercial teams still plan and measure separately. As one of our guests put it, consumers “aren’t like sheep. They don’t all go into their neat little channel pens.” 

The example came up during a recent Integration webinar on channel strategy in FMCG, hosted by Jamie Gale and Daniel Lentfer of Integration Europe, with two guests who have long experience of this shift. Georgia Mundy, Global Portfolio Director for Skincare at KARO Healthcare, has brought a multi-brand portfolio into a single commercial architecture across pharmacy, drugstore, grocery and e-commerce. Tom Macintosh has spent 20 years taking brands into new channels at Red Bull, PepsiCo and Mark Anthony Brands. 

We put to them three key considerations that come up often in our work with consumer goods companies: which channels to invest in, how to keep that investment profitable and how to keep the strategy current through the year. Here are the insights we took away.

CONSIDERATION 1:  WHERE TO PLAY 

The occasion comes before the channel 

Channel plans often start from the channel map: which accounts matter most, how large each one is and where growth is coming from. In our experience, a more useful starting point is the consumer occasion, with the channel understood as the place where that occasion turns into a purchase. 

Both guests arrived at this point from very different categories. Tom looks first for the entry point, the occasion where consumers are introduced to a category and start to trust a brand. In energy drinks and ready-to-drink, that is usually on-premise, in bars, clubs and festivals. From there, the brand follows the consumer into other moments of their day, such as the commute, the exam period or the long study session, and each of those points to the next channel. 

Georgia starts from the role of the brand. A skincare brand born in pharmacy and built on pharmacist recommendation needs a different mix from a mass brand. Journeys also differ within the same category: someone dealing with a skin flare-up will usually start with pharmacy advice, while someone buying a retinol serum for daily use is more likely to discover it on social media, Amazon or at Boots. The mix then changes again from market to market. In the UK, some medicinal products sit on grocery shelves, while in France and Germany they are sold from behind the pharmacy counter.

“Each brand shouldn’t necessarily ask the question, should we be in every channel?
They should be asking what role each channel plays for our brand, in our market,
based on the consumer journey.”

            Georgia Mundy, KARO Healthcare

Handling those differences tends to work best when a few elements, such as pricing architecture, brand integrity and data ownership, are set centrally, while channel mix, promotions and trade investment adapt to each market. Both guests described a similar balance in their own organisations. 

FROM OUR WORK
Giving each channel an explicit role, from defending a core position to testing something new, tends to make investment choices easier to agree and to explain. The same channel can play different roles for different brands: grocery is usually one to defend for a large multinational and one to grow into for a challenger brand. For newer channels such as TikTok Shop, we usually recommend a bounded budget with stop criteria agreed at the start, so the organisation can learn quickly and at a limited cost.

CONSIDERATION 2:  MARGIN 

The real channel economics sit below gross margin 

The same product at the same price can deliver very different results in a grocery account, a pharmacy, TikTok Shop or Amazon once discounts, trade terms, listing fees, retail-media investment and commissions are included. Transparency is usually the first step. At KARO Healthcare, where much of the growth comes from acquisitions, new brands keep their own P&L at first and move into a common structure at the end of a budget cycle. 

Retail media, which increasingly overlaps with brand spend, needs a rule simple enough for every brand manager to apply. Georgia’s teams use this one: anything that builds brand demand counts as brand building, and anything that drives conversion at the point of purchase counts as retail media. A second risk lies in how high-cost channels are judged. On a spreadsheet, a channel such as on-premise can look like the obvious place to cut, even when it builds the demand that other channels convert. 

“If you kill the channel that looks expensive, eventually
you will starve the one that looks efficient. “

          Tom Macintosh, TM Commercial

The same applies beyond drinks, to in-store advice in pharmacy or specialist retail for premium food. Bringing measures such as trial and awareness into the discussion with finance shifts the question from which channel is better to which channel is doing a better job. For Tom, that starts with treating finance as a partner. 

FROM OUR WORK
When performance is measured on gross margin alone, 30 to 40 percentage points of a channel’s economics can stay out of view. In our client work, a monthly view of profitability at product and client level, shared by sales, marketing and finance, has helped companies recover up to three points of EBITDA.

CONSIDERATION 3: GOVERNANCE 

Channels perform best when they run as a team  

Channels affect each other. A promotion in grocery can reduce pharmacy sell-out, and a TikTok Shop campaign can set a price that Amazon will match. Managing those effects calls for channel teams that compete and cooperate at the same time. Tom compared it to a 1,500-metre hurdle race: the race is the business year, the hurdles are occasions such as summer, Valentine’s Day and Easter, and each athlete starts in their own lane before joining the pack. “Nothing wrong with a little bit of competition,” he said, “but in order to win that race, they need to work as a pack.” 

In practice, this often means a single planning process led by the brand team, with brand media, retail media and shopper activation planned together. It is the approach Georgia takes at KARO Healthcare, and she was candid about how hard it is when account teams are measured on different targets. 

“If you kill the channel that looks expensive, eventually
you will starve the one that looks efficient. “

      Georgia Mundy, KARO Healthcare

Leadership often decides whether this works in practice. When the general manager sponsors a joined-up approach, it sets the culture for the rest of the business, a point both guests returned to. 

FROM OUR WORK 

Most companies we work with already manage their largest, most established channels well. A short quarterly review that checks whether each account still has the right role, and is managed accordingly, is often what gives the other channels the attention they need. 

As channels continue to blur, the companies that make the most progress are rarely those with the most elaborate channel map. More often, they are the ones that start from the consumer, keep a shared view of what each channel truly contributes and review those choices as a team through the year. The questions below are a practical way to see where your own organisation stands. 

FOUR QUESTIONS FOR COMMERCIAL LEADERS 

01. Which occasions bring consumers into your category, and which channels serve them? 

02. Are any channels you are still testing, such as social commerce, being managed with the targets and processes built for the accounts you need to defend? 

03. Do sales, marketing and finance work from the same view of channel profitability? 

04. Who in the leadership team owns the review of channel roles, and how often does it happen? 

If this InConversation raised something you would like to discuss, talk to us.

Our thanks to Georgia and Tom for sharing their experience so openly, and to everyone who joined the webinar.