A number of food products will disappear from the shelves in the coming period because producers can no longer support the high production costs, but they also cannot afford to make them more expensive.
A number of food products will disappear from the shelves in the coming period
Major consumer companies including Kraft Heinz and Conagra Brands are shedding product lines to combat rapidly rising costs and declining consumer demand, executives said this week.
Many companies began to reduce their offerings during the pandemic and are aggressively renewing those efforts, eliminating less popular items to focus on products that can more easily increase prices amid prolonged food inflation.
Executives at Nestle and Unilever have said they have made billions in savings after ditching underperforming products in their product portfolios.
Conagra recently discontinued a Marie Callender chocolate chip cookie cream pie to make way for what the US food company hopes will be a faster-selling apple pie with no added sugar.
”No one will have a perfect average. The key is to have more winners than losersCEO Sean Connolly said in an interview.
Heinz mayonnaise, withdrawn from the market
The elimination of less popular products is part of a “complexity reduction program” underway at Kraft Heinz, its executives said at the Consumer Analyst Group Conference in New York this week.
The company recently discontinued Heinz Real Mayonnaise.
Mondelez International CEO Dirk Van de Put told Wall Street analysts at the conference that the Oreo maker has clear rules on replacing old products with new ones.
Martin Renaud, a top marketing director at Mondelez, told Reuters the chocolate maker has “too many flavors”.
”Sometimes we tend to release a lot of things because they are interesting, but we have to be very rigorousRenaud said.
As Mondelez adds products at different price points, it adds complexity, he added.
Smaller size products, but at a “discount”
Companies are reducing product offerings to make way for new ones, such as smaller versions for discount stores or larger versions for warehouse chains like Costco, said Justin Cook, consumer product research leader at Deloitte. .
Shoppers on tighter budgets are more likely to look for bargains at both types of retailers.
”It is more expensive to make a lower volume product. Unless it’s a high-performance item that people absolutely must have, companies feel it’s harder to raise the priceCook said.
Nestle said the product drop generated savings of 1 billion Swiss francs ($1.06 billion) last year, while Unilever said the practice saved $2 billion.
Retailers are also demanding new, fast-selling products to boost their own weak sales.
The products most likely to be removed are those with a niche or limited popularity.
Heinz Real Mayonnaise has a small share of the global market, according to research firm Euromonitor.
Some consumers are bothered that they can no longer find the products on the shelf
For some consumers, such discounts can be upsetting.
Vinh Banh said in an email that he has long used Heinz Real Mayonnaise for sandwiches and eggs. He was disappointed to discover this month that Kraft had scrapped the product it had launched in 2018.
Banh, 34, of Garland, Texas, said he’s looking for any remaining jars he can find.
Kellogg has dropped its line of Special K protein shakes and Nestle has dropped Lean Cuisine Nestle paninis, Sweet Earth Benevolent frozen bacon and Sweet Earth Vegan hot dogs, company spokespeople confirmed.
Walmart told Reuters it is asking for more data from suppliers to justify prices and is pushing for more creative ways to cover costs and absorb price increases for consumers.
„We recognize that price concerns are higher at the moment, but this is where we can support ourselves and have data-driven negotiations with our suppliers.”said Chief Financial Officer John David Rainey.
„We have seen a big reduction in stock purchases this year,” Kelly Pedersen, partner at PwC, said at the National Retail Federation conference in January. “Everybody is bracing for a slowdown.”
Fewer varieties of ice cream on the market
Unilever, which makes Magnum and Ben & Jerry’s, is reducing the variety of ice cream it sells, chief financial officer Graeme Pitkethly said on an earnings call this month.
The company has been using artificial intelligence in its “Polaris” program for over two years to help manage its assortment. He credited Polaris with reducing its product variety by about 20 percent.
Unilever also cut about 5,000 types of products in the personal care category.
Food manufacturers tend to sacrifice products without much fuss. At the consumer products conference they highlighted new offerings, many of them increasingly popular handheld foods that people can eat while scrolling through their phones.
That’s not to say consumers don’t notice when a beloved item disappears from the shelf.
John Finn, 35, runs a Twitter page called “Discontinued Foods” with more than 23,000 followers.
„You would be shocked by the loyalty and the personal connections people have to food,” he said.
