Large processors are cutting back on their SKUs to meet increased for demand during the pandemic for their core products.
Companies that deal in center-store products found themselves faced with increased demand for their more mainstream SKUs as nervous consumers began hoarding, according to CNN. To meet that demand, many of them pared back production of more recent or outlying flavors or package sizes.
Coca-Cola, for instance, is concentrating on Coke, Coke Zero, Simply and Minute Maid. Mondelēz is making fewer varieties of Oreo cookies. The Frito-Lay unit of PepsiCo cut back on SKUs like Lay’s Lightly Salted and Tostitos Multigrain Scoops. J.M. Smucker has scaled back on producing reduced-fat and omega-3 versions of its Jif peanut butter, and General Mills is reducing the SKUs for its Progresso soups.
A General Mills spokesperson explained to CNN, “Right now, our consumers and our retailers likely don't need the flavor variations so we're minimizing the variety we are making.”
Some processors, like Frito-Lay are ramping production of outlying SKUs back up. But others, like Kellogg CEO Steve Callihane, believe that next year, “grocery stores [and] retail outlets will probably have less [items] than they had going into the pandemic.”