There are a couple of stories that you typically hear from grocery buyers when the subject of food manufacturers cutting back on their products comes up.
The first goes that (fill in the blank) company is great when it comes to delisting products - their competitor's, that is.
The second is that a rep from (fill in the blank) company recently announced that, based on scanning data, it had decided to cut four items from its lineup. And now that this part of the business had been taken care of, the rep had seven new items that were surefire bets to grow the category.
Jokes poked at food manufacturers aside, The Associated Press (AP) reports that Kraft Foods, Procter & Gamble, Heinz and Sara Lee are getting rid of slower moving lines in favor of promoting top sellers in light of today's economic realities.
Kraft, for example, is discontinuing its Handi-Snacks pudding line to focus on building its Jell-O pudding brand. The company also cut roughly a dozen South Beach Living frozen entrees last fall.
Procter & Gamble has sold off lines including Crisco, Folgers and Jif.
Mark Gottfredson, head of the global Performance Improvement practice at Bain & Company, said that companies cutting SKUs has picked up in recent years.
Heinz is looking to cut up to 20 percent of its SKUs over the next three years. The company cut its SKUs in half between 2002 and 2006.
Scott O'Hara, who oversees Heinz's global supply chain, told the AP, "The more we can simplify, while clearly meeting our customers' needs, the better off we are and the more cost we can drive out of business."
Mr. Gottfredson said, "You have to be very thoughtful. You've got to be really good at the customer research. If you do it well, it will drive your sales."
Discussion Questions: Do you think branded food manufacturers are making a wise decision in cutting product lines in the current economy? Is less really more when it comes to SKUs produced and marketed at retail?