I recently found Klondike Donut bars. They look like regular Klondike bars, with a hole in the middle.
The price was the same as regular ones.
This made me think…why would they cut a hole in the middle? Donuts have a hole to increase consistency of cooking.
Was it to reduce costs, and they’re selling it as a ‘new experience’? Was it to improve the user experience, and the increased profits are a nice benefit?
Reducing COGS (ice cream) by ~20% instantly creates a higher profit margin on this line.
The tradeoff is that Klondike now has to manage more SKUs, so overhead, tooling, and inventory costs are higher.
I see product innovation everywhere.
Have a great day!
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