In yesterday's blog, I highlighted an article from Facts, Figures and the Future that discussed how thousands of new offerings in 2008 resulted in added revenues for food and other consumer product companies. However, AP Food Industry Writer, Emily Fredix, recently pointed out that major food companies may be cutting the number of products they offer in 2009.
The 80/20 rule — that 80% of profits can be linked to 20% of products — applies to the food industry as much as it applies to other industries. In the case of food makers such as Kraft, Heinz, and Lance, marketing dollars will be applied more heavily to fewer products — the ones that generate the highest profits.
Even with these new strategies to cut down on the number of products, giant food makers still face a challenge this year. While sales of private-label food increased 10% in 2008, branded food sales increased only 2.8%.
All of this turmoil should lead you to maintain a close relationship with your clients and be prepared to adjust marketing plans as quickly as they adjust product offerings.[Sources: Laart, Martin, Adamy. Consumers Cut Food Spending Sharply. Wall Street Journal. 2.13.09; Fredix, Emily. Proof is in the pudding.., 2.16.09]