– Supply Chain Insight –

SKU proliferation, headaches and… spaghetti sauce?

“You have been looking for the perfect Pepsi.  You’re wrong.  You should be looking for the perfect Pepsis”

This quote represented one of the biggest revelations in food science and also would become the source of many headaches for supply chain professionals for years to come.

We live in quite a unique time where even the most seemingly inconsequential consumer products are data-driven and highly engineered.  It’s also a time when consumer choice is in abundance.

If you’ve ever walked through the infamous grocery cereal aisle or tried to decide between 6-7 different recipes of Pepsi, you get what I mean

In the following TED talk, best-selling author, Malcom Gladwell discusses Howard Moskowitz and his role in modernizing food science in the early 1980s.  Working with clients such as Pepsi, Vlasic Pickles, and Campbell Soup, where he did his most notable work with Prego spaghetti sauce, Howard Moskowitz based his work around not looking for the perfect recipe that the majority of consumers enjoyed, which was the conventional wisdom at the time for many brands but looking for the perfect recipes to cater to multiple subsets of consumer tastes.

After Howard’s research led to the invention and subsequent sale of extra-chunky Prego spaghetti sauce – a product that quickly took over the market to the tune of $600 million in sales – a lot of other brands began to catch on to the formula.  Brands stopped asking the consumer what they wanted and, subsequently, horizontal segmentation was born.

What does this all mean?  For those in grocery, next time you’re wondering why you’re shipping 70 different kinds of olive oil or why your SKU variety keeps growing, you know who to thank.

Enjoy the TED talk!

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