Cheers to Some Economic Bright Spots

beer

Without a crystal ball, it’s impossible to know just when the food industry will recover from economic stress.  As of right now, there are a few promising signs of a turnaround.  According to the Foodservice Equipment & Supplies website, in December 2009, “the National Restaurant Association’s comprehensive index of restaurant activity rose to its highest level in 22 months”.

But according to various news reports, there are a few industries that have done pretty well despite the general economic stress.  Some of them just make sense:

Food Processing

  • Includes companies such as General Mills and Hershey
  • Provides jobs for 14 million workers
  • Adds over $1 trillion to US economy
  • More people are eating and cooking at home,
  • Companies are making their products more affordable to appeal to consumers

(Information courtesy of article by Mark Crawford for AreaDevelopment.com)

Agriculture

  • Trade surplus for the past 47 years
  • “Shores up food supply while ensuring a safe, plentiful food supply”
  • “There will always be a demand for food grown and packaged here in America”

(Information courtesy of article by Lynn Finnerty for NaturalResourceReport.com)

MastiffLickingCaseDallas

…But others might surprise you:

Beer Industry

  • Provides “95,000 quality jobs with solid wages and great benefits in every state and congressional district across the country”
  • Transparent and accountable industry, promote safe and responsible policies
  • Contributes approximately $200 billion to US economy
  • Generates “more than $25 billion in economic activity in agricultures and manufacturing sectors

(Information courtesy of Flex-News-Food.com)

Pet Food and Grooming

  • Pet spas and bakeries experiencing growth
  • “The shift in people’s values about pets has created a market that is relatively recession-proof” (Rottersman, Florida Weekly)
  • Loyal pet owners want to give their furry friends the food to which they’ve become accustomed
  • According to Deb Dempsey, owner of Mouthfuls dog treats and toy shop in Denver, “”We have so many customers who say they’d eat macaroni and cheese before they’d cut back on their dogs” (Migoya, Denver Post)

I guess with man’s best friend by your side and an ice-cold brew in your hand, the American dream is that much more real, and the recession is that much easier to bear.

In US Food Industry, Cheap Can Be Tricky

Grocery Shopping
Any American can tell you that competition is key in a strained economy – for jobs, for the lowest prices, etc.  The claws are out as people across the country go to extremes to make and save money.  It’s not just the individuals who are competing, but the American businesses, as well.

Recently, competitive juices have been poisoning the ethics of the food industry.  The issue of “food fraud” is on the rise as aggressive strategies turn to deceit.  Food fraud is when food items are sold under false claims.  A number of reputable publications including the Washington Post and Newsweek have explored the aggravation of the issue during the recession.  An eye-opening article by Lyndsey Layton in the Washington Post highlights a few sneaky examples:

“The expensive ‘sheep’s milk’ cheese in a Manhattan market was really made from cow’s milk. And a jar of ‘Sturgeon caviar’ was, in fact, Mississippi paddlefish. Some honey makers dilute their honey with sugar beets or corn syrup, their competitors say, but still market it as 100 percent pure at a premium price.”

(image courtesy of http://www.dreamstime.com/royalty-free-stock-photo-gourmet-food-collage-image3333785)
(image courtesy of http://www.dreamstime.com/royalty-free-stock-photo-gourmet-food-collage-image3333785)

According to Helena Bottemiller of Food Safety News, Food scammers have tricked not only shoppers, and but also big distribution companies like Heinz USA.  According to Brandon Glenn of Med City News, an estimated 5 to 7 percent of US food supply is involved in food fraud.

Fast-paced global trade and the growing demand for cheaper food have intensified the problem, and the FDA is feeling the heat as American urge them to crackdown on product labeling and authentification.  This is where technology comes in: advanced DNA testing allows scientists to compare products to a database of samples to prove their legitimacy.  Unfortunately, Newsweek reports, the FDA doesn’t have the resources to inspect the majority of the foods in the American supply.  Looks like we as consumers have to stay on our toes.

So don’t let your bargain obsession impair your judgment – if that sweet deal for gourmet treats looks too good to be true, it probably is.

Fast Food Banks on Cheap and Fun

Fast food is famous for being quick and cheap.  And these days, cheap is chic.  So fast food companies like Burger King and Taco Bell are rolling out the bargains and highlighting these money-saving specials any way that they can.  Taco Bell called in Charles Barkley in their recent “Five Buck Box” commercials to entice consumers to try out their meal deal:

[kml_flashembed movie="http://www.youtube.com/v/Jf5KfRaZShs" width="425" height="350" wmode="transparent" /]

While fast food companies initially saw profits in the economic downturn, they are now facing sales dips in conjunction with higher unemployment rates.  As Ron Paul, the president of consulting firm Technomic explains to USA Today, people are getting more food from grocery stores and choosing to cook at home.

“Now, as the U.S. unemployment rate remains uncomfortably high, chains are struggling to keep Americans eating out at all.”
– Ben Steverman, BusinessWeek

Mac Snack Wrap

But the fast food leaders aren’t giving up.  Research from Consumer and Market Demand Network Papers proves that when fast food businesses promote low prices, demand increases, so these guys are persistent.  McDonald’s recently premiered their new Mac Snack Wrap for $1.59 to appeal to Big Mac Lovers.  They converted the famous sandwich into a tortilla form and made it cheaper.  Yum!

bkdouble

Burger King is also playing up the deals with their vast array of choices on the $1 Value Menu which includes the BK Double Cheeseburger and Crown-Shaped Chicken Tenders (yes, they went there).  I decided to check out the BK website to see how the company is promoting these tasty treats and stumbled upon their unique promotional tools.  For instance, BK is hosting the “$1 Talent Show” in which they ask consumers to upload videos of their $1 party tricks to receive Virtual Gift Cards for items off of the Value Menu.  They also have a homepage feature that allows users to customize their experience on the site through three different controls: Fun, Food, and King.  You can adjust the levels of each so if you want more food information than interactive games and contests, you can “have it your way.”  The company is having a blast with convergence and interactivity by getting consumers to play on their website and, hopefully, pay for their grub.

Billboard’s just don’t cut it anymore.  Digital is delicious.

For US Consumers, Coupon Cutting is Cool

coupons

Everybody needs to get food and groceries.  There’s simply no way around it.  But a number of recent articles show that people are cutting back on groceries and stressing out about saving some money on those mandatory grocery runs.

In November 2009, Caroline Scott-Thomas of Food Navigator USA.com published an article about current grocery shopping habits.  Interestingly enough, she cites a recent survey that found that while consumers are generally less concerned about the overall state of the economy, they are more concerned about the cost of groceries.  More and more Americans are hunting for coupons and purchasing more store brand food products to save a few bucks.  The survey results also show that even people in higher income groups are using these money-saving tactics in the grocery store: about half of the people polled with household incomes of over $75,000 a year say they cut coupons.

These survey findings match up with Todd Hale’s assessment of Consumer Goods Spending for nielsen.com.  Bargain hunting is the new fad for the majority of Americans given the struggling US economy.  People are choosing to buy cheaper proteins like chicken and turkey as opposed to beef and seafood, and they’re preparing more meals at home to avoid those expensive dinners out on the town.

Laura Harders, creator of the blog "Frugal Friends in Northern Virginia"
Laura Harders, creator of the blog "Frugal Friends in Northern Virginia"

Online deals also make grocery bargains more accessible to the average consumer.  There are online groups and websites devoted to sharing coupons and deals, such as Laura Harders’ blog “Frugal Friends in Northern Virginia.” Food manufacturing companies also cater to the coupon trend by posting coupons on the company’s official website.  While consumers used to obtain coupons from print media like newspapers and magazines, now Google can pinpoint a plethora of coupons – and even coupon communities – in just one click.

Coupon cutting isn’t just for persnickety people with too much time on their hands.  Today, coupon cutting is the thing to do.

Food: Wal-Mart For Dinner!

Americans are gripping their wallets with tight fists as they wade out the current recession.  But Americans aren’t just concerned about saving money.  American adults have to work as many hours as possible to pay the bills and afford the necessities, so time is more valuable than ever.  Leisure time is particularly precious during such a stressful time, so people do not want to spend it running errands in all sorts of different stores.

This behavior is reflected in the food industry.  Over the past few years, food sales have been dropping in traditional grocery stores and increasing in stores like Wal-Mart and Costco.  Americans can’t resist the wholesale bargains.  As Sarah Skidmore of abcnews.com explains,

“Wholesale clubs have been one of the stronger performers during the economic downturn as they used their size and low-cost format to deliver deals that appealed to cost-concious consumers.”

Not only do these stores lure penny pinching Americans with their lower prices, but they also have the “one-stop-shop” appeal – you can get your groceries, your clothes, and your school supplies all in one place.  And Wal-Mart is about to become even more enticing as the Food Institute confirms that the corporation’s COO, Bill Simon, is making significant price cuts to merchandise.

Wal-Mart has honed in on this lethal combo of saving time and money in their advertising techniques.  Check out this recent television commercial that features a mom boasting about how she got food and all other party essentials at Wal-Mart (WARNING: May disturb those with clown phobias).

Family party goes cheap...and scary.
(Image courtesy of http://adweek.blogs.com/adfreak/wal-mart/)