September 22, 2008 in Links
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September 22, 2008 · Links

When the economy goes down, packaged food sales go up

During economic bad times, interesting things happen. Package food sales go up, for instance. According to Advertising Age, it’s been [...]

During economic bad times, interesting things happen. Package food sales go up, for instance. According to Advertising Age, it’s been a “banner year”:

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 $3.3 billion, a rise CEO David Mackay told analysts was due to “a reduction [by consumers] in out-of-home consumption.

Just standard operating procedure for the company that makes Ramen noodles (sales are up possibly as high as 40%):

“It’s because of the economy,” said VP-Marketing Rick Kester. “The same thing happened in the [recessions of] the ’70s and ’80s,” despite the company’s spending only “a couple of million dollars” on marketing each year.

For investors, could this be the hedging strategy they’re looking for?

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.”

 

This entry was written by Andrew Louis on September 22, 2008 and posted in Links. It's tagged with , , .