Covid-19 is eliminating many comfort consumer brands

4 months ago 24
google news

Pity the legion of vegan fans who crave Amy’s Roasted Vegetable Pizza.

The frozen, cheese-free product disappeared from supermarket shelves after Amy’s Kitchen determined it couldn’t make it while maintaining social distancing in its factories. Loyal customers erupted in near-panic, flooding Amy’s service reps with calls and messages.

The pandemic has, of course, been a boon for well-known, comfort consumer brands, from Oscar Mayer hot dogs to Frosted Flakes cereal. But there are hundreds, maybe thousands, of other items that have gone by the wayside. Many have been axed by manufacturers’ need to focus on making only the most popular and fastest-moving items; others sacrificed for the realities of Covid-19. It’s known as “SKU rationalization,” an industry term for the whittling down of lines, or stock-keeping units. Many will eventually return to the shelves, as the vegetable pizza did, but others might not see the florescent light of a grocery store again.

General Mills Inc., maker of Cheerios and Progresso soups, has pared its roster of about 90 soups nearly in half, focusing on the 50 top sellers. Rival cereal maker Kellogg Co. is “focusing on core SKUs,” Chief Executive Officer Steven Cahillane said April 30. ConAgra Brands Inc., maker of Banquet frozen meals, and Campbell Soup Co. have done the same. Meanwhile, organic food maker Amy’s Kitchen had to reduce its offering to just 71 products, down from 228 before the pandemic.

“Clearly there’s a move to focus on fewer, high-velocity SKUs,” Alexia Howard, an analyst at Bernstein, said on a call with investors. “But pruning those products can be a massive battle because retailers get ticked off if they get rid of it.”

Consumer-product giants have long jettisoned some items, while adding others, in response to sales trends and changing customer tastes. It also addresses what some consumer psychologists call “The Paradox of Choice,” where shoppers are paralysed when encountered with 60 different types of toothpaste. Limited-assortment retailers like Trader Joe’s and Aldi often carry only a handful of products per category, and sometimes only one, to simplify supply chains.

Reducing product choice can be risky, though. In 2009, Walmart Inc. tried to remove thousands of items from its shelves to reduce clutter in its cavernous supercenters. The strategy, called “Project Impact,” was a flop, as many shoppers, unable to find their favorite jar of salsa, simply went elsewhere for all their shopping, costing Walmart sales and market share. A few years later, Walmart reversed the decision.

But the coronavirus has left manufacturers with few options if they want to keep supermarket shelves stocked with products in the heaviest demand. With shoppers making unprecedented runs on some goods, companies have increased output of the most popular items to keep up. In other instances, social distancing rules have required a rethink of some items. That’s produced shoppers pining for their dearly-departed favourite product, with no recourse but to moan on social media or call harried consumer hotlines.

Amy’s Kitchen had to walk that line with its vegetable pizza. The product, along with organic soups and other good-for-you frozen meals, have helped Amy’s go from a niche player sold only in natural-food stores to a mainstream brand, generating more than $500 million in annual sales and found on the shelves of Walmart Inc. and Costco Wholesale Corp. Amid the pandemic, frozen pizza has become nearly as sought after as toilet paper, hand sanitizer and booze.

Amy’s makes the veggie pizza in its Medford, Oregon, facility -- dubbed a “kitchen” -- by spreading caramelized onions over a hand-stretched crust, then topping the base with a mix of marinated organic shiitake mushrooms, roasted red peppers and artichoke hearts. The toppings are normally placed by different workers on a conveyor line, but the way it’s done didn’t allow for social distancing. So Amy’s had to stop making the pizza for about eight weeks, as it frantically tried to fashion a workaround.

“Was it an easy decision? Of course not,” said Amy’s President Xavier Unkovic. “We were not sure if we were doing the right thing or not. But we knew it was right for our people.”

Amy’s customers at first weren’t so understanding. One wrote on Twitter that he hit seven different grocery stores in search of the pizza, to no avail. Calls and tweets directed at Amy’s customer-service reps have almost quadrupled since March compared with the same time last year. They’re not just writing about the pizza -- Amy’s Thai coconut soup and Santa Fe enchilada bowls were also unavailable.

Hope Nelson, who lives in Alexandria, Virginia, often kept more than a dozen of Amy’s gluten-free tofu breakfast burritos in her freezer, but couldn’t find any in several trips to her local organic grocer.

“This cannot stand!” Nelson recalls thinking, though she soon accepted that her favourite products might not return under the circumstances. “I would be sad but my heart would go on,” she says.

That won’t be necessary, according to Unkovic. Amy’s chefs figured out a way to preassemble some of the pizza toppings so it could be made safely. It can be found, albeit sporadically, on shelves once again.

(This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.)

Follow more stories on Facebook and Twitter

  1. Homepage
  2. Lifestyle