Where have you gone, Cool Ranch Dori­tos?

Amid pan­demic, pro­duc­ers have been forced to trim cer­tain of­fer­ings

Calgary Herald - - FEATURES - JAKE ED­MIS­TON Fi­nan­cial Post

It was al­most im­pos­si­ble to find a bag of Cool Ranch Dori­tos in Canada for two months this spring.

Lit­tle Short Stop, a chain of 30 con­ve­nience stores in south­west­ern On­tario, didn’t have them. Nei­ther did the big su­per­mar­kets. Nor did #1 Con­ve­nience in Cal­gary: “No­body has those Cool Ranch Dori­tos,” owner Vishal Vashisht said ear­lier this month.

Cool Ranch Dori­tos’ mys­te­ri­ous dis­ap­pear­ance first oc­curred in late March. But even as panic buy­ing faded through April and empty shelves be­came more rare in su­per­mar­kets, the chips some­how stayed miss­ing.

By May, fans of the flavour had grown rest­less. They lodged hun­dreds of com­plaints as to the where­abouts of Cool Ranch with Pepsico Foods Canada, which man­u­fac­tures Dori­tos.

“I’ve been hold­ing this in for weeks, ‘cause it’s not im­por­tant in the grand scheme of things, but I can’t stand it any­more,” Jody Ed­wards, a wa­ter­colour artist in St. Catharines, Ont., wrote in a tweet to the com­pany on May 4. “Where are all of the Cool Ranch Dori­tos?”

The an­swer: nowhere, ex­cept per­haps for a few older bags still mak­ing their way through the sup­ply chain. But Cool Ranch was out of pro­duc­tion, in­def­i­nitely — one of dozens, of prod­ucts tem­po­rar­ily halted in March as man­u­fac­tur­ers strug­gled to keep pace with the bal­loon­ing de­mand for snacks.

What’s clear, though, is that the pan­demic has brought about an end to the era of end­less choice in con­sumer goods, at least tem­po­rar­ily.

And, as it turns out, hav­ing fewer flavours and pack­age sizes is simpler, cheaper and eas­ier to keep stocked if de­mand un­ex­pect­edly jumps.

The ques­tion now is: will re­tail­ers and man­u­fac­tur­ers ever go back?

In mid-march, as mass res­tau­rant clo­sures squeezed all food sales into gro­cery stores, Pepsico had to make a tough de­ci­sion on Dori­tos. It wouldn’t be to meet the de­mand for the chips with its pro­duc­tion lines op­er­at­ing as nor­mal. The way around that was to make more chips by pro­duc­ing fewer flavours.

Switch­ing a Dori­tos’ pro­duc­tion line from one flavour to an­other is com­pli­cated: It has to be cleaned of all pre­vi­ous sea­son­ing, it needs to be re­tooled with new sea­son­ing and new pack­ag­ing, and there are ex­tra clean­ing rules if the prod­uct in­volves an al­ler­gen such as pow­dered cheese. The whole process can take four to 18 hours per changeover.

“We’re talk­ing about thou­sands of pounds per hour,” said Ajay Venu­gopal, vice-pres­i­dent of sup­ply chain at Pepsico Foods Canada. “Ev­ery hour is im­por­tant.”

As a re­sult, a team of Pepsico ex­ec­u­tives and an­a­lysts had to pick which Dori­tos flavours stayed in pro­duc­tion, as well as for its Tos­ti­tos brand.

“We had to make de­ci­sions along the way and make them fast,” said Ian Adler, chief mar­ket­ing of­fi­cer at Pepsico Foods Canada. “Dori­tos is def­i­nitely one that caused a great deal of dis­cus­sion, know­ing that a fan favourite like Cool Ranch could be in jeop­ardy.”

Pepsico could only keep three flavours in pro­duc­tion and Cool Ranch is not a top seller na­tion­ally.

Orig­i­nal Na­cho Cheese Dori­tos is the top flavour in Canada, ac­cord­ing to Nielsen data, fol­lowed by Sweet Chili Heat and Zesty Cheese. Cool Ranch is fourth, out of eight flavours, so it was cut, along with Bold BBQ, Jalapeno & Ched­dar and Spicy Na­cho.

It seems like an easy call, but the na­tional rank­ing doesn’t show how pref­er­ences swing wildly from re­gion to re­gion. For ex­am­ple, Cool Ranch is last in Que­bec, but has a huge fol­low­ing in On­tario, pass­ing Zesty Cheese for third place.

“It’s a pretty sim­ple busi­ness when you re­ally think about it, but it’s wildly com­plex,” Adler said. “We knew that we would hear from con­sumers.”

They did. Pepsico re­ceived about 400 in­quires by phone, email and so­cial me­dia in the two months af­ter Cool Ranch dropped out of pro­duc­tion in late March.

“Half of them are from On­tario,” Adler said.

Most big food man­u­fac­tur­ers are fac­ing sim­i­lar tough choices.

At Kraft-heinz Co.’s pro­duc­tion plant in Mon­treal, lines are still run­ning 24 hours a day to pro­duce cer­tain shelf-sta­ble prod­ucts that have had sales gains of between 50 and 80 per cent com­pared to last year, in­clud­ing Kraft Din­ner and peanut but­ter.

But the Kraft Din­ner line has been cut to just eight flavours and pack­age sizes, from a total of 16. The line is de­voted to only turn­ing out orig­i­nal KD, and ex­tra creamy, at a pace of 400 boxes a minute. The Sharp Ched­dar flavour is out of pro­duc­tion, as is Cheese and Tomato, and the ver­sions with al­pha­bet pasta or spi­ral pasta in­stead of mac­a­roni.

On the peanut but­ter side, Kraft was mak­ing Smooth, as well as All Nat­u­ral, Crunchy and Smooth Light. Among those cut were Ex­tra Creamy, Ex­tra Roasted, Whipped, and Unsweet­ened Un­salted.

Kraft made those de­ci­sions based on a con­sumer in­sights con­cept known as “sub­sti­tutabil­ity,” said Peter Hall, se­nior vice-pres­i­dent of sales at Kraft-heinz Canada. Sub­sti­tutabil­ity is about pre­dict­ing what con­sumers will do if a prod­uct is miss­ing from a shelf.

Hall said they will usu­ally do one of three things: in sce­nario A, cus­tomers don’t buy the prod­uct at all, or buy it from a com­peti­tor; in sce­nario B, they leave the store and look for the prod­uct some­where else; in sce­nario C, they sub­sti­tute an­other type of the prod­uct within the same brand.

In pick­ing what prod­uct flavours to hold back, Kraft wanted “C” to hap­pen. For ex­am­ple, in the case of Kraft Ex­tra Creamy peanut but­ter, cus­tomers are likely to set­tle for Smooth.

“They’re say­ing, ‘OK, I might not have the ab­so­lute one I love,” Hall said. “I might not have Ex­tra Creamy, but I’ve still got Smooth and I’ve got enough Smooth for me to do ev­ery­thing I want to do. I can have Smooth four times a day ev­ery day and I’m fine. I can go out and buy one ev­ery week.”

As Kraft-heinz grad­u­ally rein­tro­duces some flavours into pro­duc­tion in the com­ing weeks, Hall said it will start with the prod­ucts that don’t have easy sub­sti­tutes.

But with de­mand in some cat­e­gories still well above nor­mal lev­els, the in­dus­try is likely months away from a re­turn to nor­mal, if it ever does, ac­cord­ing to Food and Con­sumer Prod­ucts of Canada (FCPC), the largest in­dus­try as­so­ci­a­tion of man­u­fac­tur­ers of food, bev­er­ages and con­sumer goods sold in Cana­dian gro­cery stores.

MARK LEN­NI­HAN/THE AS­SO­CI­ATED PRESS FILES

Cool Ranch Dori­tos are out of pro­duc­tion, one of dozens, of prod­ucts tem­po­rar­ily halted in March as man­u­fac­tur­ers strug­gled to keep pace with the de­mand for snacks.

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