Danone tightens product range to reduce costs
French food giant Danone is cutting the variety of products it sells to retailers to cut costs, Reuters has reported.
Supermarkets and the makers of packaged food are struggling to combat rising costs, and soaring inflation also means shoppers are tightening their belts.Earlier this year, some food stores were forced 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.
“Inflation is a dynamic, particularly in Europe, that we need to start to get used to,” Ayla Ziz, Danone’s global head of sales, said.
The company is cutting back on so-called “stock keeping units” (SKUs), meaning that some supermarkets will have fewer variations of Danone products when it comes to flavours and sizes, she said.
Having fewer SKUs would help cut costs per type of product, she said, adding that Danone was reviewing its “entire portfolio” with every customer to see which SKUs it wants to discontinue.
Consumer companies like Danone make many versions of the same product – from big and small tubs of the same yoghurt to different flavours and value packs.
Simplifying its range means some of these could be sacrificed to make it cheaper for retailers to stock and manage a smaller, less complex inventory.
