The AI Arms Race in CPG Pricing Has Already Begun

Revenue Growth Management (RGM) isn’t new. Every major CPG has been running pricing, promo, and portfolio strategies for decades.

But as Michael Healy—Head of RGM at BAT and former RGM leader at PepsiCo, AB InBev, and Reynolds—explains in this episode of Reimagine With AI, the game has changed.

What was once limited by manpower and Excel models is now being supercharged by compute power, AI algorithms, and real-time execution in the trade.

Here are the big shifts reshaping RGM:

 Data Infrastructure Is Now an Arms Race

AI doesn’t magically solve RGM. Without modern data infrastructure, algorithms can’t deliver value. Healy calls this the “arms race”—whoever organizes and scales their data fastest will win the next decade of CPG.

Why it matters: Leaders must treat data as a strategic asset, not just an operational necessity.

 AI Is Making Store-Level Optimization Possible

Traditionally, RGM meant market-level strategies. Now, AI can equip sales reps to optimize pricing and assortment at the store level—something impossible to scale with human-only teams.

Why it matters: Imagine running 100,000 RGM studies simultaneously. That’s what AI makes possible.

Price Optimization Isn’t Plug-and-Play

The biggest misconception? That AI pricing is quick, easy, or turnkey. Healy is blunt: it’s not. It requires clean data, strong algorithms, and sales teams trained to act on outputs.

Why it matters: The tech exists, but execution depends on disciplined processes and commercial buy-in.

Promotions Can Strengthen Retailer Relationships

AI promo modeling doesn’t weaken partnerships—it strengthens them. Healy shared how category-wide promo calendars, optimized by AI, can help retailers win market share against competitors like Circle K or 7-Eleven.

Why it matters: AI shifts promo conversations from “what we need” to “how we can help you grow.”

Human Judgment Still Matters

AI can recommend lowering prices, raising them, or running infinite scenario tests. But in regulated industries like tobacco, guardrails—brand equity, compliance, affordability—must be built in.

Why it matters: The future is AI + human in the loop, not AI alone.

My Reflection

Michael’s message is clear: AI in RGM isn’t a silver bullet. It’s an amplifier.

If your data infrastructure, sales enablement, and organizational discipline aren’t in place, AI will only expose the cracks. But for companies ready to invest, the payoff is massive—precision pricing, promo efficiency, and retailer partnerships that grow categories, not just brands.

🎧 Watch or listen to the full conversation with Michael Healy here:

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See you next week.

Imteaz & the Applied Intelligence team