The French food group Danone announced that it is reducing the range of products it sells, as its top executive pointed out, in order to adapt to the changing shopping habits of consumers in Europe and beyond, as inflation hits household spending.
Supermarkets and packaged food companies are struggling to cope with rising costs, with products ranging from petroleum to packaging paper becoming more expensive due to the protracted transport crisis (due to a pandemic) and the Russian invasion of Ukraine.
Rising inflation also means consumers are cutting back on spending. On Friday, Tesco warned that Britons are buying less, turning to cheaper products and buying more often as they try to tackle the crisis precisely.
Some grocery stores were forced to take the products off the shelves earlier because they could no longer afford to sell them.
These factors are pushing one of the world’s leading food producers to reconsider how it sells the best-selling products, ranging from Activia yogurt to Evian water.
“Inflation is a dynamic, especially in Europe, that we need to get used to,” Ayla Ziz, Danone’s head of sales, told Reuters.
Danone is reducing its so-called “storage units” (SKUs), which means that some supermarkets will have fewer flavors and packaging sizes for Daone products.
Fewer SKUs will help reduce costs per product type, he said, adding that Danone is reviewing “its entire portfolio” with each customer to see which SKUs they want to discontinue.
Source: Capital
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