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Food & Beverage

Foodmakers cut offerings

February 16, 2009
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If you want to see how the nation''s foodmakers are weathering the recession, the proof is in the pudding. Kraft Foods Inc., the nation''s largest food maker, will no longer sell Handi-Snacks pudding to retail customers, according to the Associated Press. At the same time they will be pushing new flavors of their more lucrative Jell-O pudding. Food companies from Sara Lee Food Corp. to H.J. Heinz Co. are trimming their offerings to focus marketing dollars on their higher-margin, best-selling brands and retain consumers, who are trading down in the recession. Those top brands are more likely to hold their own, and getting rid of lesser-performing brands helps companies showcase top products as retailers cut inventory. Heinz aims to remove two items for each one it introduces. Sara Lee hopes to cut its offerings 8 percent this fiscal year. It''s all shaping up to mean fewer choices for consumers. But will they mind? Probably not, analysts say, noting that if these products had a big following companies would keep them around. The nation''s grocery shelves could stand some trimming. The trend of cutting SKUs -- or stock-keeping units, the unique identity each product carries -- has caught on the past three or four years. It accelerated last year as companies homed in on their most profitable brands. Some companies are just selling product lines: J.M. Smucker Co. now owns the former Procter & Gamble Co. brands of Folgers coffee, Jif peanut butter and Crisco shortening. Excess sizes, types and flavors of products increase the cost of everything from marketing and production to sales. And, during the recession, it''s particularly important to conserve cash.

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