Nestle SA has reduced the number of product variations it offers by a fifth in an efficiency drive announced late last year that will continue in 2023.
(Bloomberg) — Nestle SA has reduced the number of product variations it offers by a fifth in an efficiency drive announced late last year that will continue in 2023.
Consumer goods groups typically stock thousands of variations of sizes and flavors of different products, which are known as “stock-keeping units” or SKUs. Nestle, Danone and Unilever have all been trimming SKUs to simplify operation as they struggle to pass on higher input costs to consumers.
Nestle’s reductions come from both cutting and harmonizing the portfolio, Chief Executive Mark Schneider said in comments published Monday. “You may have ended up with 10 or 15 SKUs where the differences were minute and then what you’re trying to do is collapse it into just one or two,” Schneider said in an interview with a Barclays analyst. Schneider said expects there’s probably about another 10% of products to be cut this year.
Read more: Unilever, Nestle Scrap Product Lines as Consumers Cut Back
In November, Nestle said it had more than 100,000 SKUs and a third of them account for just 1% of sales.
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