R.I.P: Rest in Pringles
Product downsizing trends increasing
European retailer tags meat
Paper canister holds cat food medley
Olive packer moves from glass to plastic
by Pan Demetrakakes
Executive Editor
The rising price of food continues to have implications for consumer behavior-and for the strategies of food manufacturers and retailers.
Wal-Mart and Costco both reported higher-than-expected sales gains for the first quarter. Costco posted an overall sales gain of 8%, while Wal-Mart reported same-store sales up 3.2%. Analysts attributed the two chains’ good fortunes to customers, squeezed by inflation in both food and fuel, seeking bargains, especially in bulk purchases.
Analyst Britt Beemer toldBloombergthat retailers probably will have to keep up promotions to drive sales. “If you didn't have a sale, you didn't have customers,” Beemer said in a telephone interview. “Consumers are having a hard time dealing with inflation in both food and fuel.”
Paradoxically, bad economic times also are inspiring just the opposite type of consumer behavior: buying smaller portions.
TheCincinnati Enquirerreported that some consumers are “trying to control their food bills by buying smaller-size items as they grapple with soaring prices.” Kroger is trying to tap into the trend by offering milk in 96-ounce jugs, as an alternative to standard gallons (128 ounces). The per-ounce price comes out the same if shoppers take advantage of weekly specials, a Kroger spokesperson says. Ironically, this taps into a trend by some food manufacturers to downsize product portions while maintaining prices. (See “Product downsizing trends increasing” below.)
One of the major effects of increasing prices is a downturn in sales for organics, which typically carry a premium of 20% to 100% over their conventional counterparts. According to a recent survey by the Food Marketing Institute, four in 10 Americans have bought at least one organic product in the last six months. But among those who tried organics only once and never went back, 70% said the reason was excessive prices.
Top Developments
R.I.P: Rest in PringlesThe unusual but fitting request of the Pringles potato chip can inventor to be buried in his own creation was met last week. Frederic Baur, who died May 4 at Vitas Hospice in Cincinnati, was cremated, and a portion of the retired Procter & Gamble employee’s cremains was placed inside one of the signature tubular paperboard potato chip canisters. The container was interred along with an urn containing the remainder of his cremains.
Product downsizing trends increasing
The current economic state is leading some food manufacturers to shrink the amount of product in some packages, but maintain or even increase the price. Manufacturers such as General Mills, Wrigley, Coca-Cola, PepsiCo, Shamrock Farms and Kroger Co. already have instituted such product reductions. For example, Wrigley released its new “Slim Pack,” which holds 15 instead of 17 sticks of gum, and General Mills is putting 1.5 ounces less cereal in its boxes while the price went up. Some consumers are responding with comparative shopping, while others aren’t changing spending habits, saying they don’t have the time to make price and product weight comparisons.
European retailer tags meat
European retailer Metro Group is using model AD-222 radio frequency identification (RFID) inlays fromAvery Dennison RFIDon foam meat trays. The implementation of the devices, which meet Metro Group’s food labeling safety requirements and are readable when stacked, should strengthen product flow, save restocking time and cut costs. Avery Dennison RFID worked with its Fasson Roll Materials Europe division to provide food contact compliant adhesive for the inlays.
New Products
Paper canister holds cat food medleyA promotional container that holds several different kinds of cat food is made of recycled paperboard in a stackable format with a handle. Meow Mix cat food from Del Monte Pet Products put out a Combo Medley for display at end caps in Wal-Mart, comprising 3.15 pounds of dry cat food, four 2.75-ounce cups of wet cat food, and a 4.25-ounce pouch of treats.Sonocodesigned the overall package, trade-named Dorpak, which consists of 100% recycled paperboard with a vinyl lid and riveted plastic handle.
The world’s leading processor of table olives has switched to a multilayer plastic container for foodservice packages of olives, condiments and other products. Grupo Angel Camacho, located in Spain near Seville, is using a 2.4-liter retortable jar fromRPC Containersas an alternative to glass. The jar, trade-named Thermic Ultra, has inner and outer layers of polypropylene with a middle layer of ethylene vinyl alcohol. Ribs allow the side walls to expand during retorting.
