Rank the catalogue by contribution, not by cases shipped
The SKU that ships the most volume is rarely the one earning the most money, and nobody can tell until trade spend, freight and actual yield are charged to each product individually. The first deliverable of our Fractional CFO engagement is a monthly contribution-per-case ranking: the retailer invoice price, minus the promo funding and listing amortization that SKU consumed, minus freight to the distribution centre, minus ingredients and packaging at the yield the line actually ran rather than the yield the recipe promises.
That ranking reorders the catalogue almost every time it is built. A flagship that lives on promotion can earn less per case than a quiet product nobody ever discounts, and a private-label contract that looked thin at quote time can outperform a branded line once its zero trade spend is counted. Every downstream call — which SKU gets the next promo dollar, which price increase to request, which product to retire — starts from this list.
A retail listing is a purchase, so model the payback before the pitch
Listing fees, committed promo calendars, payment terms and consumed line capacity are the price of shelf space, and the buyer meeting goes better when you have already priced it. Before a listing is accepted we model the cases per store per week it needs, the contribution left after the trade spend the agreement commits you to, and the months until the listing fee is repaid. A SKU that only breaks even during promo weeks is not distribution; it is an expense with a logo on it.
The same arithmetic runs at category review, when the retailer decides what keeps its shelf space. Walking in knowing which of your SKUs clear both their velocity hurdle and your contribution hurdle turns the review from a defence into a negotiation — and sometimes the profitable outcome is handing a listing back instead of funding another round of promotion to save it.
Grocery terms make you the retailer's lender
The structural cash gap in food manufacturing is timing: ingredients and film are bought weekly, payroll runs on its own clock, and grocery customers pay on terms that can stretch to 60 or 90 days. Growth widens the gap rather than closing it, because each new listing adds weeks of inventory and receivables in front of the first payment. We size the gap in weeks of operating cost, build a rolling cash forecast from the production schedule and each retailer's actual payment behaviour, and arrange the operating line from that forecast rather than after the squeeze — with the monthly HST refund most basic-grocery producers collect scheduled in as the dependable inflow it is.
Co-pack or second line: rent capacity or buy it
When orders outrun the plant, the choice is renting someone else's capacity or installing your own, and each answer wins under different conditions:
| Decision input | Run it at a co-packer | Install the line |
|---|---|---|
| Cash at the start | Tooling, spec work and a minimum-volume commitment | Deposit, rigging, installation and the working capital of the ramp |
| Cost per case | Higher — the co-packer's margin rides every case | Lower at volume, punishing below it |
| Minimums | Contract minimums you owe even in a slow quarter | Shifts you must fill to justify the payroll |
| Yield and quality | Their line, your spec sheet and audit rights | Your line, your problem, your upside |
| Where it wins | Unproven demand, seasonal SKUs, formats you cannot run | Steady volume that clears the break-even runs |
When the line wins, we build the capex payback the way a credit desk reads it: incremental contribution at volumes your order book actually supports, a ramp period below rated speed, and financing matched to the asset's life. Business Financing Advisory is led by Walla Assaf, CPA, whose background is banking and corporate finance, so the lender package and the payback model are one document rather than two stories. The accelerated capital cost allowance on processing equipment belongs in that model before the purchase order goes out — the mechanics sit with Tax Planning & Advisory.
Yield points are profit you already paid for
The cheapest profit in the building is the gap between standard and actual yield, because closing it needs no new customer, no listing fee and no capital. Trim, giveaway at the filling head, changeover waste and expired finished goods each carry a dollar value in the monthly report, and a single yield point recovered on a high-volume SKU can beat the contribution of a listing that took months to win. The batch records our End-to-End Accounting clients already keep are the raw material; the CFO meeting is where they become a target with an owner and a deadline.
We run this as a standing monthly engagement for processors in Mississauga and across the GTA: the contribution ranking, the cash forecast, the capacity model when one is live, and a working session where whichever question is open — the listing, the line, the price increase — gets worked to an answer. The scope and fee arrive in writing after a free 15-minute discovery call.
