Pricing Strategy Framework for CPG Brands

Your price is more than a number—it's a signal.

Whether you're building a local food brand or trying to scale into national distribution, pricing strategy can unlock margin, velocity, brand perception, and consumer loyalty. But too many CPG brands price by instinct or margin stacking, not strategy.

This guide is built to help you shift from “just covering costs” to building a pricing engine that fuels sustainable growth and supports your brand position in the market.

What Is a Pricing Strategy?

A pricing strategy is the intentional structure behind how you set, position, and adjust your product’s price based on:

  • Customer psychology

  • Cost to serve (not just produce)

  • Sales channel and logistics

  • Competitive benchmarks

  • Brand stage and perception

It’s not just “how much should I charge”—it’s “how do I structure my pricing to support both my growth and profitability?” Strategy is how you get to a place where you can adapt to changing customer demands as they happen, and not react after the fact. The key to a smart organization that grows is strategy, and implementing that strategy without delay.

Value-Based Pricing (Not Cost-Plus)

What it is: You price based on perceived customer value, not just a markup on cost.

This works when:

  • Your product has clear differentiation (ingredient quality, taste, mission)

  • There’s a story behind the brand or category

  • You want to signal premium positioning

Example: A local jam made with heirloom fruit in small batches shouldn't compete on price with Smucker's. Instead, it competes on quality, origin, and story.

Pro tip: Your packaging and marketing must reinforce that value. You can't charge $9.99 for peanut butter in a generic jar with a budget label.

Framing: Control the Comparison

What it is: The context you give customers for evaluating your product's price.

Why it matters: People don’t judge prices in isolation—they compare. You can control that comparison.

Framing techniques:

  • “Compared to what?”: Sit your $6 bone broth next to a $3.50 boxed broth? Tough sell. But next to $8 collagen drinks? Suddenly it’s a value.

  • Anchor pricing: Introduce a premium version to make the standard version feel affordable. Think: $9.99 premium sauce makes your $6.99 core SKU look like a deal.

  • Retail trick: Having three tiers (low, mid, premium) in your own line helps steer most people to the middle one—the “value” tier.

Pro tip: Use this in your sell-in strategy too. Show buyers your “value ladder” to help them understand your price points and upsell potential.

Tiered Pricing for Different Channels

What it is: Offering different price-per-ounce or unit economics depending on where and how the product is sold.

Where it works:

  • Club stores: Larger packs, lower per-unit cost

  • DTC: Smaller packs, higher AOV through bundling or subscriptions

  • Retail: Price designed to compete on shelf and still cover trade spend

Example:

  • DTC: 2-pack of sauces at $22 with free shipping

  • Retail: Same sauces sold individually at $7.99 each

  • Club: 3-pack for $19.99

Each version supports different margins, cost structures, and customer expectations.

Bring It Together: Build a System, Not Just a Price

Great pricing strategy is not just about margin—it’s about control. Control over perception. Control over growth. Control over your path to profitability.

Done well, pricing becomes a strategic lever that:

  • Protects your margins

  • Builds trust with customers

  • Drives reorder behavior

  • Prepares you for channel growth

Bundling Theory: Creating Margin Through Perceived Value

What it is: Selling products in a set—either as a value pack (3-pack of sauces) or cross-product bundles (snack mix + dip).

Why it works:

  • Increases basket size

  • Lowers shipping cost per unit for DTC

  • Moves lower-velocity SKUs

  • Creates a reason to try multiple products

Psychology behind it: People are terrible at breaking down individual prices in a bundle, especially if they perceive a “deal.” You control the perceived value.

Example:

  • Individual dip: $5.99

  • Chips: $4.99

  • Bundle: $9.99 (instead of $10.98)
    You gained a $0.98 margin while presenting a “discount.”

Pro tip: Build a bundle with a mix of high-margin and lower-margin SKUs to protect profit. Bundle-specific packaging can also reinforce premium positioning.

Downsizing: Less Product, Same Price—More Profit

What it is: Reducing the size of your product without reducing the price.

Why it's powerful:

  • Increases margin per unit sold

  • Drives repeat purchases without raising the shelf price

  • Allows price consistency in inflationary environments

Real-world logic:

  • If your 24oz salad dressing costs $1.10 to make and you sell for $4.99, you get ~$3.89 gross.

  • Cut it to 16oz, cost drops to ~$0.80, still sell for $4.99 = ~$4.19 margin.
    Now you get more purchases to cover the same 24oz, with higher margin and higher velocity.

Same principle:
Bars switched from 12oz bottles to 16oz drafts. Why? Higher perceived value and more turns from the same keg. And the customer drinks two pints instead of one bottle.

Pro tip: Downsizing should be paired with messaging around sustainability, portion control, or convenience—not cost cutting. Otherwise, customers may feel cheated.

Evolving Your Pricing Strategy as You Grow

Your pricing strategy shouldn’t be static. What works for a launch won’t necessarily work when you're in 200 stores—and definitely not when you're pitching a national distributor. As your business grows, your pricing needs to evolve with it.

At launch, pricing is about getting product into hands. That might mean offering introductory prices, loss leaders, or limited-time promos to encourage trial. Just be sure you’re treating this as a marketing investment—not your actual price structure. Too many founders get stuck at those early price points and then struggle to step up later.

The step-up strategy is essential. From day one, know your long-term target price—the one that supports your full cost to serve, trade spend, distributor margin, and a healthy net margin. Then, if you need to discount at launch, do it with a plan to gradually move toward your real price. Use coupons, DTC promotions, or limited-time shelf pricing to manage this progression without alienating early buyers.

As your brand grows, you’ll hit inflection points where you need to rethink price. Expanding into new regions? Costs will shift. Adding co-manufacturers or distributors? You’ll need to bake in their margins. Building a DTC channel? You’ll want higher AOV to offset fulfillment costs, likely through bundling or subscriptions.

The key is to stay ahead of your pricing—not to chase margin after it disappears. A flexible pricing strategy that evolves as you scale is what separates brands that stall at $500K in revenue from those that make it to $10M.