Food is a basic human need, but we have choices like what kind of food will we buy, where will we get it and at what price. Some of these choices are made by the consumer himself, however many times they are made by the producers and the shops.
These choices and product variety have changed dramatically over the last three years. So what happens when the chocolate candy you enjoy once a week disappears from all the shelves?
At the beginning of the pandemic, they were observed shortages in product stocks (especially on toilet paper, flour and antiseptics) due to the wave of panic shopping. This wave may not have had a long life, but stock shortages seem to have come to stay. Two years after the onset of the pandemic, they are more common than ever.
Now, another phenomenon is observed more. There are not so many product shortages, but there are fewer varieties. For example, you can find many different brands of milk chocolate, but only one or no chocolate with banana filling.
This is what in English is called SKU (stock-keeping unit) rationalization. This is the golden ratio between products that will please consumers and increase sales, while reducing operating costs and supply chain problems.
It’s the complex decision that retailers have to make to maximize their profits as producers try to find ways to reduce shortages due to pandemic or war.
One thing is for sure: the product choices in a store are no longer unlimited and the number of unique products is decreasing.
According to 210 Analytics data, the number of types of refrigerator products is steadily declining from 2019. However, the number of options a consumer has in front of him varies by product category – and the pandemic has laid its foundation here.
For example, there are now many different options for iced teas and coffee drinks, due to the fact that people stayed and worked longer at home and did not go out to get coffee. The same goes for sweets and cheese, as research has shown that junk food consumption increased during the pandemic.
On the other hand, the pandemic is not to blame for everything. Yogurt exploded when the famous Greek yogurt entered the US market around 2008. Since then, however, yogurt products have begun to decline due to trends in society and the economy. Now, as many consumers are vegan or go on a dairy-free diet, lactose-free or milk-free products have begun to gain ground.
In short, the delicate balance of what consumers want to see on the shelves has changed dramatically in recent years – and will continue to change as supermarket owners want to keep their consumers happy, at a reduced cost for themselves.
The problem with producers
But there is another problem: the more producers are hit by a pandemic and geopolitical developments, the less retailers can control what products they have – and this is something that is expected to take root.
The pandemic has caused disturbances affecting workers in manufacturing companies. As workers either get sick more often or need to be less because of social alienation, fewer people are on the production line and so it is more expensive to produce the same amount of goods.
Consumers may want to try new products, but this too is complicated: it needs a different design, more frequent cleaning during production, more frequent machine changes.
So, one strategy of the producers to withstand this complex situation created by the pandemic is to simplify the workflow.
This means that the varieties produced are reduced, for example either in flavors or in packaging options. You will have your favorite ketchup, but you will not have the extra hot red sauce with chili peppers.
In conclusion, empty shelves and fewer product choices are a hallmark of the pandemic economy, and it seems that the factors that caused it will remain, even when the coronavirus threat ceases to be so immediate.
Unfortunately, the challenges of the pandemic to producers and logistics will continue to affect what is possible, not just what is desired. The era of abundance and endless choices in the supermarket has probably come to an end.
Money Review
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