Background and Challenge

A global Fortune 500 consumer foods products company with a strong core business saw opportunities to expand its presence in several meals & snacks categories. The food products company was broadly under-penetrated in this area and saw that this sector demonstrated attractive growth, and appeared to align with key consumer trends.

L.E.K. Consulting was engaged to assess whether the company should enter specific categories internationally, and how it should do so – organically, via partnerships or through acquisition. To fully evaluate these opportunities, L.E.K. objectified the financial and organizational implications of the strategy. In addition to North America, L.E.K. analyzed additional markets including Brazil, China, Italy and Russia.

Approach and Recommendations

The L.E.K. team developed a comprehensive view of the targeted meals & snacks categories. Specifically, L.E.K. conducted extensive analysis to understand category-level growth rates and margins, market dynamics, key consumer trends and implications, channel and customer requirements, and the competitive landscape. 

L.E.K. also partnered with an internal client team to understand the client organization’s capabilities and the implications on potential new market entry and growth strategies. L.E.K. then worked closely with the internal client team to develop a strategic growth plan for specific categories in North America, as well as targeted international markets, and presented the strategy to the senior executive leadership team, including the CEO and COO.  

L.E.K. determined that specific meals & snacks categories demonstrated high growth rates and attractive margins. The evaluated categories were also “on-trend” with consumers. The overall recommended strategy was one of “value-added innovation leadership.” A critical strategy component was to focus on categories with the highest level of "value add" – categories characterized by attractive margins and higher levels of innovation, and significant opportunities for competitive differentiation and sustainable growth.

Another strategy element was to focus on underpenetrated consumer segments, such as healthy meals for families and kids. L.E.K. developed entry strategies for each recommended category, defined consumer segments and identified acquisition targets where appropriate.


L.E.K. provided two clear sources of value for the client on this case. First, L.E.K. developed a holistic and value-creating plan that would provide incremental revenue of $1.5 billion at a significantly improved gross margin, and would result in an incremental $3 of shareholder value per share by 2013. Secondly, L.E.K.'s collaborative approach during the project served to overcome the internal biases that many business units had against these targeted categories. This new acceptance of the targeted categories would help to reduce integration challenges.

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