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TEA BREAK
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Italian time, this is a noval way of telling the time. And the computer, its gender is revealed
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Wales’ diverse range of food a drink products will be on show to the world next month at one of the world’s largest trade events, SIAL (October 19-23).
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ARCHIVE
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Issue 58
September 17, 2008
Vol. 1
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Issue 57
September 10, 2008
Vol. 1
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Issue56
September 3, 2008
Vol. 1
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Issue 55
August 27, 2008
Vol. 1
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Issue 54
August 20, 2008
Vol. 1
Issue 28
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Issue 53
August 13, 2008
Vol. 1
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Issue 52
August 6, 2008
Vol. 1
Issue 26
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Issue 51
July 30, 2008
Vol. 1
Issue 25
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Issue 50
July 23, 2008
Vol. 1
Issue 24
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Issue 49
July 16, 2008
Vol. 1
Issue 23
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[MORE]
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Package Foods Sales Soar
The same thing happened in the [recessions of] the '70s and '80s
Campbell Soup's sales rose 13% in the most recent quarter, a phenomenon CEO Douglas Conant said was aided partly by strapped consumers embracing condensed soup as an inexpensive meal alternative. Kellogg Co.'s second-quarter sales climbed 11% to £1.77 bn, a rise CEO David Mackay told analysts was due to "a reduction [by consumers] in out-of-home consumption." General Mills saw U.S. sales increase 14% in its most recent quarter, reported last week, and Kraft Foods, which replaced American International Group on the Dow last week, reported a second-quarter sales jump of 21% to £6.bn. "The fact that people are eating at home more is certainly a positive," said CEO Irene Rosenfeld. The average grocery bill has risen 5% from a year ago, according to the Food Marketing Institute. Asda Survey Shows Families in the UK are nearly £600 A Year Worse Off
Of course, there's a bit of a catch: Package-foods companies' sales increases can also be credited to their hiking prices to offset swinging ingredient costs. And that's taking a toll on profits. Despite its sales gains, General Mills' first-quarter net income declined 4% due to commodity hedging. Some ingredient prices fell sharply during the quarter.
Volume declines
But package-food companies have been raising prices all year, and ingredient costs remain historically high. "Nearly every branded package-food company saw volume declines worsen as a result of higher pricing," Credit Suisse analyst Robert Moskow wrote, analyzing ACNielsen data for the 12 weeks ended Sept. 6. "Sales growth for the large-cap package-foods companies was 2.2%, driven by 7.5% pricing and offset by a 4.9% decline in volume." He noted that Sara Lee, General Mills and Heinz were all up in volume, while Kraft and Campbell were slightly down. Wachovia analyst Jonathan Feeney, however, predicted that as commodity prices stabilize, margins will grow. Tim Hammonds, FMI president, said consumers are eating at home more but are not showing a renewed interest in cooking, which is why a lot of products seeing the biggest bump are the easiest to prepare: cereal, sandwiches, ramen, and macaroni and cheese.
Jeff Harmening, president of General Mills'said "People are eating more meals at home today, and cereal is a quick, convenient option for them," he said. Ms. Rosenfeld said sales of Kraft's Macaroni & Cheese, which she described as "our icon of value-oriented meal solutions," grew 20% in the most recent quarter. The same thing happened in the [recessions of] the '70s and '80s, And whilepeople seem to be less able to afford dinner out, it looks like restaurant breakfast and lunch are starting to weaken as well. "Breakfast away from home is slowing, and restaurant breakfast traffic was flat in the June quarter for the first time since 2004," said UBS analyst David Palmer said. Mr. Palmer added: "As job losses deepen, we wonder if lunch and breakfast occasions could be next -- further bolstering breakfast businesses at General Mills and Kellogg."
[PRINTER FRIENDLY VERSION]
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