CHICAGO Dec 22 Reddi-wip, the top-selling U.S.
ready-made whipped cream, is going into hiding for the holidays.
ConAgra Brands, 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,"
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.
Connolly declined to say how much ConAgra may lose in sales
because of the shortage. On Thursday, the company reported
better-than-expected profits for the quarter ended Nov. 27.
"We continue to try to make sure we get every bit of nitrous
that we can get our hands on," Connolly said.
Aaron "Bunny" Lapin, an inventor from St. Louis, created
Reddi-wip in 1948, and milkmen initially delivered it door to
door, according to the company's website.
In 2016, the U.S. market for products such as ready-made
whipped cream was expected to reach $505.3 million, up from
$407.2 million in 2011, according to market research firm
ConAgra has previously said that a full supply of Reddi-wip
should be available by February.
"We're not losing sleep over it," Connolly said of the
shortage. "It too shall pass."
(Reporting by Tom Polansek; Editing by Dan Grebler)