It’s easy to think of market share as nothing more than a measure of who’s “winning” in the market, but it’s actually so much more than that. Market share gives you a clear picture of how your business is performing compared to competitors, how the market landscape is shifting, and where there could be untapped opportunities to grow. In this post, we’ll explore how you can use market share to shape your business strategies.
Putting your data to work
Let’s start with the basics. Market share measures a company’s sales in relation to the total market, and as you may have seen in consumer reports, it’s typically expressed in two ways: unit market share (that is, the percentage of total market unit sales) and revenue market share (in other words, the percentage of total market sales revenue). At first glance, it might seem like just another number. Yet, when you look closer, this metric can reveal your business’s position in the market and help you uncover opportunities for growth.
For businesses in food and hospitality, market share data helps you answer key questions like: Where are the major players dominating? Where do you have room to grow? Which competitor could you outpace with the right strategy? With thoughtful analysis, this data becomes the foundation for creating strategic sales and marketing plans. It allows you to protect your position, refine your approach, and drive your business forward with a clear north star.
The power of market share in action
Imagine you work for a big food company. In Q1 of last year, you noticed that two medium-sized competitors in the non-dairy creams category held a modest 9% market share. At first glance, they didn’t raise any flags. However, when you looked closely, you noticed their year-to-date (YTD) trends told a more complex story. One competitor had grown 21%, while the other had declined by 26%.
By digging deeper into the numbers and consulting with sales teams, you discovered that the declining competitor was dealing with sourcing issues, while the growing competitor had successfully launched a new product line with technology which reduced costs. With this critical information, you shaped our priorities for the year: on one side, you focused on safeguarding our market share through stronger client relationships and, on the other, you worked with the new product development (NPD) team to innovate offerings that addressed emerging needs, ensuring to stay competitive in this evolving space.
Dos and Don’ts
As we previously explored, market share data is an essential measure for businesses, but it’s easy to get lost in the numbers. To make it work effectively, here are some do’s and don’ts to keep in mind:
- Do look at trends over time. A competitor’s rapid growth or decline can reveal opportunities or threats you might otherwise miss.
- Don’t ignore smaller players. Rapid growth from a niche competitor can shake up the market.
- Do segment your analysis. Break down market share by region, product line, or customer segment to uncover specific insights.
- Don’t rely on market share alone. Instead, be sure to pair it with customer feedback and market penetration data for a well-rounded view.
Final Thoughts
Market share data is one of the most powerful tools food businesses can use to inform their business strategies. It provides a window into your competitive position, highlights where you’re succeeding, and uncovers areas that need attention. But data alone isn’t enough—it’s how you use it that matters. And, to get the most of it, it’s key to be creative with your data and pay close attention to detail!
