As we all emerge from a great summer, it is inevitable that our focus will turn to 2025.  There are reasons to be optimistic and pessimistic.  The economy is doing well but may slow, perhaps rapidly.  There is a big distinction between the have’s and have-not’s amongst consumers.  Political uncertainty is at a peak in 2024, with over 60 elections globally and half the world’s population voting this year.  What is clear from all our client work and a rapidly heating up M&A environment, is that the winners will make their own luck and create their own momentum. 

 

If the last few years taught us agility, I think the next few will require the disciplines of the editor.  It is a time for sharper choices.  Many brands are propping up too many subscale activities and using what’s working to compensate for what’s not.  That reduces results and kicks the can down the road on the issues that need better ideas to solve them.  When growth is hard to come by, impact is what matters. If you have a business idea that’s performing well, fund it first to full potential.  Be objective on what’s not working or isn’t well positioned for the future.  Take bolder action here.  For sure use tactical activities to buy time but get to the underlying problems and make bigger moves.  This is a time for portfolio clean-up, for innovation when you’ve fallen behind, and for fewer, bigger initiatives to lead the way.  Retailers are rejecting the clutter and focusing on effective products that also deliver efficiently on margins and working capital.  The online assortment that exploded in the last ten years is unable to keep pace with rising customer acquisition costs and the poor shopping experience on marketplaces.  We will see a flight to quality.  Brands matter.  Scale matters.  A few big things will do better than a lot of small.

 

Much of our work right now is almost merging with our M&A practice.  When you look at a new deal (and they are starting to come thick and fast), you look dispassionately at what you see.  You zero base and look for what there is to get excited about and what it’s potential could be.  Then you figure out how to solve for the rest.  In organic plans for 2025 you need to force the same “step-back” and dispassionate assessment.  Couple attractive short-term activity with fixing the problems at source.  Put more work into the gaps and getting better solutions that can pay off over a 3-5 year time horizon.  Growth accelerators built from a point of view on the future and positioning you to take advantage of that future.  This is our big focus with clients right now and you will see us productize ways to work through these dynamics.  You will also see us continue to be very active in M&A as the environment is getting better for deals if you have a growth playbook. 

 

I hope you have all enjoyed the summer and look forward to connecting soon!

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MARK TARCHETTI 

Co-Founder, Alchemy-Rx