Prices are going up on almost everything. Here's whyOctober 9, 2021
New York (CNN Business)If you walked into a grocery store last year, you may have made some unfortunate discoveries: No reduced-fat Jif peanut butter on shelves. Less Progresso soup. Fewer varieties of Smucker’s Uncrustables sandwiches available.
All are examples of food that consumer goods manufacturers stopped making in 2020. So unless there was an old jar or can left over, these items and others disappeared from the store. And while it was generally lesser-loved fare that evaporated, depending on how big a fan you were, you may have been sorely disappointed to leave empty-handed.
The good news is that many items that went away are back. The average number of different products sold in grocery stores tracked by Nielsen increased 2.5% to 19,285 items during the 13 weeks ending July 31 compared to the same stretch last year. During that period in 2020, the average number of items at stores declined 4.5% from 2019, according to Nielsen.
At the height of the pandemic last year with restaurants closed and grocery demand soaring, consumer goods manufacturers simplified their supply chains by paring down product offerings and speeding up production lines on their most popular items. This improved companies’ ability to meet demand on key goods but meant that consumers had fewer choices on the shelves when they rushed in to stock up on groceries.
Now, companies have shifted back to expanding their variety again to drive sales. “The death of variety that everyone was predicting didn’t happen. It has come back in full force,” said Krishnakumar Davey, president of IRI’s strategic analytics practice. “People are sick and tired of seeing the same products.”
Hot sauce and sardines: What’s new and what’s made a comeback
In order to meet the surge in demand last year, spice maker McCormick “temporarily suspended production of many secondary products to ensure availability of top selling [items],” a spokesperson for the company said in an email.
McCormick (MKC) has since reinstated all of the items it pulled back on, although it did not say which, and added new lines of Frank’s hot sauces, Cholula wing sauces and Grill Mates seasoning blends.
J.M. Smucker (SJM) last year “temporarily scaled back production” on peanut butter varieties, such as Simply Jif, Reduced Fat and Omega 3. It also cut back on flavors for Smucker Uncrustables — a line of frozen sandwiches and pockets — such as hazelnut, honey, peanut butter and reduced sugar flavors. The company also paused planned product launches.
But Smucker has resumed normal production levels and added those products back. It’s now focusing again on product launches, such as recent introductions of Jif Natural Squeeze peanut butter and Smucker’s Uncrustables’ kids snacks.
Early in the pandemic, General Mills (GIS) chose to prioritize “producing and maintaining inventory of our most popular flavors while withdrawing items that are important for variety, but would have added short term complexity,” said Kelsey Roemhildt, a spokesperson for the company. For its Progresso Soup line, for example, the company minimized the variety from 90 different items to 50. It has since reintroduced those items back to the market, she said.
Some of that has to do with increased demand for packaged food with more people working from home instead of offices.
“It’s important that we deliver additional solutions for lunchtime and away-from-home snacking,” she said.
Dan Hofmeister, senior vice president of brand marketing at tuna-maker Bumble Bee, said in an email that its item count has grown 36% to 307 different items since cutting down to a low of 225 last year.
“As demand begin to normalize, we began phasing in temporarily suspended” items, Hofmeister said. Bumble Bee has recently launched new lines of tuna snacks and bowls, as well as white Albacore in olive oil and new sardine lines.
Grocery stores also say they are receiving more options from manufacturers to stock their shelves.
“Manufacturers are starting to dial up again with innovation and product assortments,” Lauren DeVol, a spokesperson for SpartanNash (SPTN), which owns Family Fare, Martin’s and other supermarket chains in the Midwest, said in an email.
The company is seeing the most variety expansion in baking, dairy, frozen meals and salty snacks and candy, DeVol said.
“Increased snacking at home is driving the need for innovation as consumers want to try new snacks and treats,” she said.
Other new items that are getting rolled out: PepsiCo (PEP) recently added Mtn Dew Rise, a caffeinated energy drink the company says is intended for morning consumers, while General Mills has introduced Trix and Cocoa Puff oatmeal cereal and Nature Valley muffins. Bumble Bee launched 3 Quick Catch Tuna Bowls blending tuna, rice, and veggies, and spice-maker McCormick debuted Frank’s frozen appetizers and Frank’s garlic and mild wing sauces. Danone (DANOY) added Evian+ sparkling water.
All in all, the variety for many staples at the grocery store has expanded.
The average number of salty snacks at stores grew 10.9% during the three months ending July 11 compared to the same period last year, according to the latest data from IRI. The selection of energy drinks increased 11.5%, pre-mixed cocktails jumped 79.2%, and pastry items gained 14.8% during the stretch.
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