As recovery from the recession continues to take shape, it's clear that the past few years were challenging for even the best-equipped and -prepared industry players. At the same time, findings from the Customer and Channel Management Survey jointly produced by the Grocery Manufacturers Association (GMA), McKinsey & Co. and the Nielsen Co. show that those leading customer organizations that made the right bets for growth, built better capabilities and collaborated more effectively with their top retail customers emerged from the storm better and stronger than their peers, with share gains, growth and margin expansion to show for it.

What follows is a detailed discussion of survey findings by performance area.

Sales Strategy
Big, forward-looking bets to unlock growth. Looking ahead 12 to 24 months, more than half of winning CPG companies planned to boost their field sales organizations and merchandising resources, with one-third intending to increase their use of brokers and to combine broker and retailer resources to reach more outlets.

To ensure that their bets are aligned with changing high-growth opportunities, winners continually evaluate resource investments by channel and customer. Winners also report they perceive higher-growth retailers such as Dollar General, Costco and Kroger as more willing to collaborate with them.

Strong sales leadership teams, next-generation capabilities and cross-functional collaboration. Winners ensure that they staff the right sales leadership resources to ensure future growth, emphasizing deep category expertise, customer knowledge and a strong strategic perspective.

The survey further revealed that winning companies are constantly improving their teams' capabilities by investing in customer profit and loss (P&L) management, pricing analytics and strategic collaboration. In addition, winning CPG organizations report a high level of internal collaboration and more effective relationships between sales and other key functions, particularly marketing.

Customer-focused account teams as part of a winning sales organization. While all survey respondents deploy sales teams of similar sizes, winners' teams have a high percentage of customer-aligned functional experts in areas such as pricing, category management and trade marketing versus their category peers. Winners also tailor their customer teams to the unique needs of each priority retailer.

Pricing Investments
From 2008 to 2010, many CPG companies saw significant increases in commodity input costs, causing many to implement price increases much larger and more often than in the past. Then, as the U.S. economy fell into a recession and commodity prices declined, CPG players felt downward pressure as volumes went down. Also, consumers focused on value began switching to more value-oriented formats. To maintain competitiveness, retailers responded by pushing for lower prices and greater investments from CPG companies.

Comprehensive view of market dynamics in pricing strategies. Pricing winners are more likely to focus on external influences when setting prices. In addition, private label growth has winning companies reporting that private label prices have become an important consideration in the development of pricing strategy.

Regular/frequent pricing discussions with retailers. Winners continue to engage retailers in pricing discussions regularly, framing discussions in ways that are retailer-relevant and cognizant of the market environment and pace of inflation. Top-performing CPG players are also more likely to use a "menu" approach to prices, varying them depending on requests by a retailer for warehousing, logistics and back-office services.

Dedicated pricing resources and integrated pricing and promotion teams. Winners are also twice as likely to integrate everyday pricing and promotion roles in a team that resides either in an existing centralized function or in a revenue management group at the center. This provides multiple benefits to the CPG manufacturer, including alignment of pricing and promotion strategies, and the establishment of a single source of accountability for all pricing activities.

Trade Investments
In response to these challenges, trade spending as a percentage of adjusted gross sales increased significantly from 2008 to 2009 for all companies. Trade investment winners, however, were able to differentiate their performance and capture more incremental sales from promotions than others.

Winning companies also evaluate the performance of their trade investments frequently, with about two-thirds conducting promotional performance reviews at least quarterly.

While most CPG companies are increasing their trade investments at Walmart, winning companies allocate more of their trade spend to non-promotional activities requested by the mega-retailer (e.g., sustainable packaging) than others. In return for these investments, winners secure greater cooperation from Walmart in the form of increased distribution, more promotional support, additional secondary placement in stores and better shelf placement.

Winning companies also cast a wide net, exploring collaborations with more retailers than their peers: 50 percent of these companies have approached 10 or more retailers.

Winners align with retailers on common performance goals at the start of a given initiative. While retailers commonly share information on store sales, loyalty card data and shopper research, winners go a step further, sharing information on brand performance, competitor performance and price elasticity. Further, top-performing manufacturers and their retail partners jointly tracked performance metrics and shared incentives, performance routines and a focus on the bottom line to enable successful execution.

Complexity Management
Many forces combine to make manufacturers' product portfolios and value chains more complex, including channels with varying price points, sizes and packaging, and individual retailers seeking competitive advantage through customized SKUs.

Seventy-eight percent of winners conduct SKU optimization analyses once a year, while 42 percent of other players do. In winning companies, marketing and sales lead this analysis.

Engaging retailers in the SKU optimization process. Top-performing CPG companies proactively engage retailers in the SKU optimization process. Winners are more likely than others to initiate this process with a retailer; others may simply react to a retailer request.

Winners are also more likely to apply a targeted approach to SKU optimization, focusing on one category at a time. Winners create a relatively smaller number of customized SKUs for retailers – 77 percent of winning companies tailor fewer than 10 percent of their SKUs for individual retailers.

The survey further reveals that most CPG companies are pursuing standardization, with more than 70 percent of respondents focusing on supply chain, manufacturing, marketing and packaging. Companies pursuing standardization initiatives usually realize the greatest savings in inventory, raw material and packaging costs.

In summary, the winning companies in the 2010 Customer and Channel Management Survey have proved that strong performance is possible even in the most challenging of economic environments.

Editor's Note: GMA and McKinsey & Co., in collaboration with the Nielsen Co., will launch a follow-up Customer Channel Management Survey in early 2012. All survey participants will receive customized feedback highlighting benchmarks. To take part, e-mail tokari_alldredge_and_kris_licht@mckinsey.com.