Danone cuts costs by shrinking product range

Trying to cope with rising prices, Danone is reducing its product range. Fewer different flavours and packages should help to reduce costs, but no product lines would be cut completely (for the time being).

Less of the same

Danone will offer fewer product variations in an attempt. The number of different references will be cut back considerably, head of global sales Ayla Ziz told Reuters. For instance, the FMCG manufacturer will produce fewer different pack sizes or flavours of some products.

As transport, oil and packaging are getting ever more expensive because of the war in Ukraine and the ongoing pandemic measures in China, Danone wants to save on production costs by offering a smaller, simpler range. Supermarkets can also make savings, the FMCG giant says, as they need to provide less storage and shelf space, transport and stock management.

“Inflation is a dynamic, particularly in Europe, that we need to start to get used to”, Ziz explains. The reduction in variants would not be the same everywhere, but following an analysis that could vary by region and by retailer. Danone’s entire portfolio will be reviewed with each retail customer, according to Ziz. The FMCG giant will also invest in software to more accurately price products and keep them in line with consumer expectations.