Why food companies want consumers to buy more of everything
Subscribe to enjoy similar stories. After years of raising prices, food companies making everything from cookies to snacks and frozen meals say they need to sell more products to post a profit. Price increases have been good for profits, but packaged food and snack company executives see sustained volume growth as the way forward, so they are flooding store aisles with new takes on familiar products, such as frozen bar-b-que loaded chicken patties.
Executives are also shelling out on marketing and scooping up brand names to entice inflation-wary consumers. “If you’re [growing] through price increases, you’re usually just keeping up with your competition," said Anthony Gruber, chief financial officer at Mama’s Creations. “You’re not gaining any more product out on the shelves, and you’re not gaining more consumers." The fresh-deli prepared food maker’s growth primarily comes from volume, which drove around 90% of sales in the three months ended Oct.
31, 2024. Volume growth is even more critical when consumers are stretched, executives say. Discussions about brand, price and package size that historically took place once or twice a year now come up monthly to help adjust based on a product’s performance, said Rob Holston, head of the global and Americas consumer products sector group at EY.
Executives also are rethinking how long they should keep some products on store shelves, hoping limited runs of six to eight months spark excitement and sell more product, Holston said. Recent special store aisle editions include mystery flavor Twinkies and candy cane-shaped tubes filled with Slim Jims. Retailers are also taking closer measures of consumer behavior to determine whether shoppers are more brand or budget conscious.
Read more on livemint.com
