Activia owner trims product range to cut costs

French FMCG giant Danone has announced it is cutting the variety of products it sells.

According to a top executive speaking to Reuters, Danone is adapting in a bid to change consumer shopping habits as inflation continues to soar.

The move follows warnings by Big 4 grocer Tesco revealing customers are buying less and switching to cheaper own-brand products due to the cost of living crisis.

However, with all this, paired up with supply chain issues, Danone has to rethink its best-selling products which includes Activia yoghurt and Evian water.

READ MORE: Pepsi poaches Danone’s Katharina Stenholm as new CSO

“Inflation is a dynamic, particularly in Europe, that we need to start to get used to,” Ayla Ziz, Danone’s global head of sales, told Reuters.

She added that the company is also cutting back on the so-called “stock keeping units” (SKUs), meaning some supermarkets would have fewer flavours and packaging sizes of Danone products.

According to Ziz, fewer SKUs could result in helping cut costs per type of product, adding that Danone was reviewing its “entire portfolio” with every customer to see which SKUs it wants to discontinue.

The FMCG giant also added that simplifying products were also on the table, freeing up funds in supermarkets for storing, monitoring and transporting goods. Although, Ziz did not identify which ranges might be targeted, she said: “It’s not a global cut of some products.”

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