SKU proliferation is rarely the result of poor discipline. It is the natural outcome of growth, innovation, and customer customization. As food manufacturers expand product lines to meet customer requirements, channel demands, private-label programs, and regional assortments, SKU counts grow quickly and often rationally.
The executive risk is not the number of SKUs. It is the declining visibility into how each one contributes to profit and margin control.
How SKU Complexity Obscures Pricing Performance
As SKU counts expand across customers, channels, and regions, pricing outcomes become increasingly uneven. Different pack sizes, formulations, customer-specific items, and channel variations introduce subtle differences in pricing logic and cost treatment.
At scale, these differences are difficult to track. Averages smooth performance across thousands of products, making it appear as though pricing is working overall. In reality, margin is often being subsidized from one SKU to another. A small portion of the portfolio quietly funds the rest, while underperforming SKUs persist without triggering attention.
From an executive perspective, this creates a dangerous illusion. Portfolio-level results look acceptable even as SKU-level margin control deteriorates.
Why Averages Hide Margin Leakage Across the Portfolio
Averaging is not inherently wrong, but it becomes misleading when used as a proxy for control.
When executives rely on blended margin views, they lose sight of where margin is actually created and where it is quietly eroding. Loss-making SKUs are masked by higher performers. Pricing exceptions feel isolated rather than systemic. Margin optimization efforts become blunt instruments applied across the portfolio instead of targeted interventions where they matter most.
Over time, this lack of granularity makes it harder to understand which products support profitable growth and which ones dilute it.
SKU Visibility as a Prerequisite for Margin Optimization
This is not a failure of strategy. It is a failure of visibility.
Without SKU-level clarity, margin optimization and profit optimization become reactive exercises. Pricing changes are applied broadly because the underlying drivers of margin performance are unclear. Growth decisions are made without confidence in how incremental volume will affect profitability.
Executives are then left managing an expanding portfolio without knowing which SKUs truly create value, which ones break even, and which ones quietly destroy margin.
Restoring SKU-level visibility does not mean eliminating complexity. It means understanding it well enough to govern pricing decisions with intent.
How SKU Proliferation Impacts Executive Control
When SKU performance is opaque, executives lose leverage. Pricing decisions become harder to defend. Forecasts feel less reliable. Conversations about margin drift toward explanation rather than control.
By contrast, organizations that regain SKU-level insight can identify underpriced products, correct misaligned pricing logic, and make deliberate choices about where complexity is worth the tradeoff. In many cases, margin opportunities already exist inside the portfolio. They have simply been buried by scale.
Why This Matters Now for Margin Control
Profitable growth does not disappear. It gets buried under complexity.
In today’s environment, food manufacturers cannot afford to manage pricing at the average level while volatility increases and portfolios expand. Executives who restore SKU-level visibility often uncover margin opportunities already inside the business and regain control over pricing decisions that were previously made in the dark.
Margin control starts with knowing which products earn it.
Want to uncover margin opportunities buried across your SKU portfolio? Let’s chat about how Zilliant Pricing Plus helps executives regain pricing control: zilliant.com/contact-us
