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Big-Name Food Brands Lose Battle of the Grocery Aisle - WSJ
By Annie Gasparro
Updated April 30, 2017

America’s packaged-food giants are losing the battle for retailers’ shelf space, complicating their efforts to break out of a yearslong slump. Instead of promoting canned soup, cereal and cookies from companies like Kraft Heinz Co. Kellogg Co., and Mondelez International Inc., grocery stores are choosing to give better play to fresh food, prepared hot meals, and items from local upstarts more in favor with increasingly health-conscious consumers. [Grocery stores] are seeking ways to... maximize return on our shelf space,..........[Grocery stores] like other retailers, aren’t giving up on big brands. But finding new ways to entice people to walk through the center aisles again is tricky.

Some brands are seeking ways to get their products into the fresh and prepared foods section of the store. But, Mr. Fitzgerald says: “If we overrun perishables with all the big packaged brands, we lose our competitive edge.”

Instead, retailers such as Wal-Mart Stores Inc. are pressuring big brands to lower their prices as a way to attract customers..........Companies like Hershey and PepsiCo Inc. said they are working with retailers to be creative. “That’s a conversation we’ve been having with some of the retailers, to say ‘how can we help you rethink the center store so that we can bring growth back,” said Pepsi Chief Indra Nooyi on a conference call last week, when it reported declines in its Quaker Foods division. “Our hope is that with the rejuvenation of the center store, our categories will grow, too.”.......Big brands are increasingly focusing on improving profitability through cost-cutting and consolidation. Kraft and Heinz combined two years ago as slow growth spurred a need for savings. Kraft Heinz Co. has been able to cut more than $1 billion from the two predecessor companies’ budgets. Some analysts say Kraft Heinz’s sights could be set on Mondelez, which unsuccessfully attempted to buy Hershey last year... Kraft and Mondelez used to be part of the same conglomerate until 2012, when it was split in two.
grocery  supermarkets  brands  retailers  CPG  Kraft_Heinz  shelf_space  Kellog  Mondelez  Hershey  PepsiCo  prepared_meals  perishables  fresh_produce 
may 2017 by jerryking
From Diaper to Soda Makers, Big Brands Feel the Pinch of a Consumer Pullback - WSJ
By Sharon Terlep, Jennifer Maloney and Annie Gasparro
April 26, 2017

Some blamed the weak start of the year on higher gas prices, bad weather and other external factors, while other executives pointed to shifting consumer tastes. Analysts say some big brands, such as Gillette and Yoplait, are losing ground to upstarts. Overall purchases of consumer packaged goods in the U.S. declined 2.5% in unit terms in the first quarter, according to Nielsen.....consumers are cutting back purchases, aggressively seeking deals and drawing down supplies at home. At the same time, he said, a growing affinity for beards has played a big part in driving down razor sales, which contributed to a 6% organic sales decline for P&G’s grooming unit....PepsiCo, like big food rivals Kraft Heinz Co. and Nestlé, is struggling as consumers shift away from diet sodas and processed foods to fresher and healthier options. It has launched new products, such as a premium bottled water brand, to adjust to the shift.....For food and nonfood staples, big brands are struggling more than the overall industry. The 20 largest consumer packaged goods companies last year had flat sales while smaller ones posted sales growth of 2.4%, according to Nielsen.

Wal-Mart Stores Inc., meantime, has been reducing inventories and slashing prices as it fights to compete with Amazon.com Inc. and European discounters moving into the U.S. Those cuts are eating into its own profit and, in turn, leading the world’s biggest retailer to put pressure on its vendors.........The dynamics are driving tough choices for companies as they are forced to decide between reducing prices and ceding market share. PepsiCo and Coca-Cola Co. have been shrinking packages and raising prices.
brands  hard_choices  large_companies  volatility  P&G  Gillette  Yoplait  CPG  PepsiCo  healthy_lifestyles  Kraft_Heinz  Nestlé  Wal-Mart  Coca-Cola  price-cutting  price_hikes  Fortune_500  upstarts  supply_chain_squeeze  shifting_tastes  Amazon  Big_Food 
april 2017 by jerryking

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