Both Kraft Foods and Sara Lee confirmed today (17 February) that they are increasingly focusing on more profitable products and brands in a bid to boost margins.
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Speaking to just-food this afternoon, a spokesperson for Sara Lee said that the US food major is continually evaluating its product portfolio and trimming unprofitable lines.
“Streamlining the business to become more profitable is a process we started a couple of years ago…. One measure we are introducing is to reduce complexity, including reducing the number of products we offer,” the spokesperson revealed.
Sara Lee has not published specific reduction targets, however, the spokesperson said current trading conditions have increased the necessity of these cuts.
“The economic downturn adds an element of urgency to the efficiency gains we were already working towards,” the spokesperson said.
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By GlobalDataMeanwhile, Kraft, the world’s second-largest food group, has confirmed that it too is discontinuing under performing products.
“From time to time, we discontinue brands for a variety of reasons including declining sales or limited distribution,” a spokesperson for the company admitted.
For example, in December, Kraft discontinued shelf-stable, ready-to-eat Handi-Snacks puddings and Kool-Aid gels for retail sale in the US.
“The business has been declining in the US for several years. In fact, the business has declined by more than one-third since 2005. It was the right financial and strategic decision for the business,” the spokesperson said.
However, the spokesperson was quick to emphasise Kraft’s commitment to developing new categories.
“We continually launch new products and review our portfolio of brands regularly to ensure they are best meeting consumer needs.
“We will focus our resources in other areas on the Jell-O business such as our two new puddings – Boston Crème Pie and Cinnamon Roll – and gelatins – Raspberry Goji and Strawberry Acai with antioxidants,” the spokesperson added.
In the first quarter of 2009, Kraft plans to launch 20 products in about 60 different varieties, the company revealed.
