Price-pack architecture analysis: compare price and mix

Price pack architecture analysis compares realized selling price, physical volume and contribution across pack sizes and channels. It shows whether the portfolio earns more because customers buy more product, pay more for comparable contents, or move toward a different pack. Start with net sales and costs from your own exports, rather than treating shelf prices as the brand's revenue.

Define the comparison before combining the files

Use one row per SKU, pack format and channel for the same reporting period. Retain customer detail underneath the summary so that deductions and exceptional deals can be traced. Compare equivalent formulations and contents; a different product is a separate commercial proposition.

The minimum fields are SKU, channel, packs sold, contents per pack, net revenue, variable product cost and variable channel cost. Net revenue should already reflect the discounts, returns and allowances in the chosen sales measure. Do not subtract an allowance again as a channel cost.

For this review, contribution means net revenue less the costs that vary with the sales being compared. The SBA's break-even guidance uses selling price minus variable cost as the amount available toward fixed costs. Keep fixed overhead outside this contribution measure, and label any allocated costs separately.

The sales file must use the brand's selling unit consistently. If one channel records cases and another records individual packs, convert both before calculating pack price. Procurement's separate question of comparing incoming supplier offers belongs in supplier price and pack-size comparison.

Build a common-unit view

A fictional US beverage brand reviews September 2026. Every can contains the same beverage and the same physical quantity. Its two formats are a single can and a six-can pack, so a can is a valid common unit.

The input table below is already aggregated from the sales and cost exports. Product cost and channel cost are variable costs assigned to those same sales.

Put these fields in columns A:F, with headers in row 1 and the four records in rows 2:5. Calculate the comparable measures in G:L:

G2 =B2*C2
H2 =D2/C2
I2 =D2/G2
J2 =D2-E2-F2
K2 =J2/G2
L2 =J2/D2

G is cans sold; H is revenue per pack; I is revenue per can; J is contribution; K is contribution per can; L is contribution margin. Copy down. Preserve full precision in the formulas; displayed dollar rates below are rounded to two decimals and margins to one decimal percentage point.

The grocery six-pack earns $2.40 contribution per pack, calculated as 6,000 / 2,500. That sounds stronger than the grocery single's $0.50 until contents are considered: contribution per can is $0.40 versus $0.50. The club six-pack earns the largest total contribution in the table, but the lowest contribution per can.

These are observations about the supplied sales, not proof that changing a pack will change demand. Review customer deductions through price realization by customer before attributing a channel gap to pack design.

Prove the portfolio totals

The common-unit total is 10,000 + 15,000 + 6,000 + 24,000 = 55,000 cans. It also equals the sum of packs multiplied by cans per pack. In Excel:

=SUMPRODUCT(B2:B5,C2:C5)

Microsoft documents SUMPRODUCT as summing products of corresponding arrays. Covirage is not affiliated with Microsoft.

The financial checks are equally direct:

• Net revenue: 18,000 + 24,000 + 13,200 + 31,200 = 86,400.
• Contribution: 86,400 - 54,200 - 8,300 = 23,900.
• Portfolio price per can: 86,400 / 55,000 = $1.57, rounded.
• Portfolio contribution margin: 23,900 / 86,400 = 27.7%, rounded.

Tie revenue to the period's sales report, and tie both cost columns to their agreed source totals. Divide totals for portfolio ratios. Averaging row prices or margins gives each channel equal weight regardless of its sales.

Test a pack shift with an explicit substitution assumption

Suppose the grocery team proposes selling 400 additional six-packs. It expects those purchases to replace 2,400 grocery singles, with existing prices and variable costs unchanged. This holds physical volume constant: 400 multiplied by six equals 2,400 cans.

Added revenue is 400 multiplied by $9.60; added contribution is 400 multiplied by $2.40. Lost revenue is 2,400 multiplied by $1.80; lost contribution is 2,400 multiplied by $0.50. The proposal reduces contribution by $240 under this substitution assumption.

If the extra pack sales are incremental, remove the displaced-single row and reassess capacity and incremental selling costs. Sales must own the demand assumption; finance owns its arithmetic. For a period-to-period explanation across the portfolio, use the separate price, volume and mix bridge. For choosing a review workflow, see price analysis software.

Where it goes wrong

• Different contents called one unit. A can only works when contents are comparable. Normalize to weight or fluid volume when package contents differ.
• Deductions counted twice. Net sales after promotional allowances must not lose those same allowances again in channel cost.
• Pack and channel effects confused. Different customers, terms and service costs can explain a gap between identical packs.
• Contribution called profit. This table excludes fixed expenses, financing and taxes. It does not establish full operating profitability.
• Substitution assumed without evidence. Historical sales do not show how much a new pack will replace another. State and vary the assumption.

Compare your own packs in Covirage

Bring your sales export, pack conversions and consistently scoped cost file to Covirage. Covirage maps the columns, and its tools compute and check price, physical volume and contribution comparisons; the external AI model explains the results with every figure traced to its rows. Create a free Covirage account and bring a sample of your own data.

See Covirage for CPG brands for the industry context.