Where's the Reddi-wip? ConAgra lowers product profile during shortage

Thu Dec 22, 2016 4:58pm EST
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By Tom Polansek

CHICAGO (Reuters) - Reddi-wip, the top-selling U.S. ready-made whipped cream, is going into hiding for the holidays.

ConAgra Brands (CAG.N: Quote), maker of Reddi-wip, is scaling back on promotions and merchandising as the nation faces a shortage of ready-made whipped cream, Chief Executive Sean Connolly said in an interview on Thursday.

The short supply is due to an August explosion at an Airgas Inc facility in Florida that killed one worker and disrupted the supply of nitrous oxide, the gas used to propel whipped cream from containers and keep it airy and light.

"What we have to do when we have supply constraints like this is back off some of those merchandising activities," Connolly said. "You don't want to have an ad in the grocery store flyer and then not have product on display."

ConAgra, contrary to its usual preference, also wants retailers to place whatever supplies of Reddi-wip they have in less-visible parts of grocery stores.

"There are refrigerators that are really in high-traffic, high-visibility places. You don't want to put them there," Connolly said.

If Reddi-wip occupied prime store space, that could push demand to "exceed supply and then you'll have out-of-stocks, and that's not an efficient use of the customer's shelf," he added.

The disruption in nitrous oxide supplies comes at a bad time for makers of ready-made whipped cream because sales typically rise during the holidays as consumers use it to top hot chocolate, pies and cakes.   Continued...

ConAgra Foods production facility is seen in Oakdale, California, December 18, 2015.  REUTERS/Fred Greaves/File Photo