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Keurig Dr. Pepper’s innovative Route to Market strategy
The recent Keurig Dr. Pepper (KDP) earnings call focused on the popular industry topics of late: Supply chain disruptions, commodity inflation, and transportation shortages. With sales up almost 7%, the company is doing a solid job managing all three. There was one point in the Q&A that I found very interesting. “We think our DSD asset is a competitive advantage,” CEO Robert Gamgort told analysts, “We’ll look for ways to continue to consolidate distribution and drive more efficiency and effectiveness through that really important asset to us.” To understand its strategic importance, you need to understand KDP’s broader route to market strategy.
What is a Route to Market strategy?
Stated simply, a route to market strategy is how a company plans to get its product in a position where consumers can purchase it. It doesn’t really matter if a company has a phenomenal product if consumers don’t know about it or can’t find it to buy. It also doesn’t matter if it has a great product that is readily available if the cost associated with the first two are exorbitantly expensive.
In the consumer goods world, a route to market strategy typically entails generating consumer demand through advertising and then selling goods to a customer (retailer) and delivering them via a 1. direct shipment to the retailer’s warehouse, 2. direct-store-delivery (DSD) or 3. wholesaler who acts as a mixture of 1 and 2.
