French food giant Danone (DANO.PA) is cutting the variety of products it sells to retailers to reduce costs. However,This means yoghurt fans may miss out on the exact flavour or pot-size Danone product they’re used to.
Supermarkets and the makers of packaged food are struggling to combat rising costs, with products like crude oil, and paper packaging becoming expensive. This is because of a protracted pandemic-led shipping crunch and Russia’s invasion of Ukraine.
Soaring inflation also means shoppers are tightening their belts. Tesco warned Britons are buying less, switching to cheaper, own-brand products and shopping more often as they try to cope with the cost-of-living crisis. Earlier this year, they forced food stores to take products off shelves because they could no longer afford to sell them. Those factors are prompting one of the world’s top food manufacturers to rethink how it sells its best-selling products, which range from Activia yoghurt and Evian water.
Ayla Ziz, Danone’s global head of sales, urges that we need to get used to the dynamism of inflation. The company is cutting back on so-called “stock-keeping units” (SKUs). This means that some supermarkets will have fewer variations of Danone products in different sizes and flavours.
Consumer companies like Danone make many versions of the same product. Could be from big and small tubs of the same yoghurt to different flavours and value packs. It’s not pulling an entire product line from the market, but simplifying its range. This means sacrificing to make it cheaper for retailers to stock and manage a smaller, less complex inventory.