Faced with rising costs and pickier customers, processed foodmakers find ways to boost their products' appeal—and make price hikes stick.
Having already teased out costs through greater automation, shrinking inventory, and tighter logistics, manufacturers are now looking for new ways to improve, or just preserve, profit margins. Although they have no choice but to pass on higher costs to customers, they are now able to do it in smarter ways—by raising prices on only the least price-sensitive items instead of whole product lines or tailoring prices to various levels of demand in local markets, for example. Foodmakers are also tweaking product presentation and packaging in an effort to boost sales volumes.
