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Spam sales soar as buyers seek value
By Jonathan Birchall in New York
Published: May 22 2009 02:15 | Last updated: May 22 2009 02:15
Spam luncheon meat and canned chilli have joined Kraft macaroni and cheese, Jell-O desserts and Kool-Aid powdered drinks as the recessionary foods of choice as the global downturn grips US households.
Hormel, the meat products company that launched Spam in 1937, said on Thursday it had seen double-digit increases in sales of the canned meat during the quarter ending on April 26, continuing a trend that started late last year.
Sales of its Hormel Chili canned beef – another product that dates back to the Great Depression – and of Dinty-Moore brand canned stews also grew by double digits.
“These products created strong consumer demand because of their great value proposition,” the company said.
A 12-ounce can of Spam sells for about $2.50, and a 15-ounce can of Hormel Chili sells for $1.50.
The surge in demand for lower-priced products led Hormel to decide late last year to switch part of the production of a new processing plant in Iowa to canned meats, as well as the microwave meals it had previously been focused on.
“That wasn’t the trend we were on before,” Jeffrey Ettinger, chief executive, said on Thursday of the surge in demand for Spam.
He argued that the company had also supported growth with recently introduced products such as Spam Singles – a single-serve product – and a “gourmet” version of its Hormel Chili.
Mr Ettinger also noted that some of the company’s more expensive products, such as its “party tray” packages of meat, cheese and crackers that sell for around $10, were also seeing double digit sales increases.
“Value is in the eye of the consumer,” he said.
The strong grocery meat sales and lower commodity prices helped Hormel to achieve better-than-expected results in the first half of its fiscal year, despite weaker sales of its refrigerated meals and food to restaurants.
The company said it had seen a fall off in pork product sales as fears over the swine flu virus peaked in early May, but that sales had subsequently recovered.
Its second-quarter earnings were up 3 per cent at $80.4m, or 59 cents per share, while revenue was little changed at $1.60bn.
It guided Wall Street to the upper end of its full-year earnings forecast of $2.15 to $2.25 per share.
Spam sales soar as buyers seek value
By Jonathan Birchall in New York
Published: May 22 2009 02:15 | Last updated: May 22 2009 02:15
Spam luncheon meat and canned chilli have joined Kraft macaroni and cheese, Jell-O desserts and Kool-Aid powdered drinks as the recessionary foods of choice as the global downturn grips US households.
Hormel, the meat products company that launched Spam in 1937, said on Thursday it had seen double-digit increases in sales of the canned meat during the quarter ending on April 26, continuing a trend that started late last year.
Sales of its Hormel Chili canned beef – another product that dates back to the Great Depression – and of Dinty-Moore brand canned stews also grew by double digits.
“These products created strong consumer demand because of their great value proposition,” the company said.
A 12-ounce can of Spam sells for about $2.50, and a 15-ounce can of Hormel Chili sells for $1.50.
The surge in demand for lower-priced products led Hormel to decide late last year to switch part of the production of a new processing plant in Iowa to canned meats, as well as the microwave meals it had previously been focused on.
“That wasn’t the trend we were on before,” Jeffrey Ettinger, chief executive, said on Thursday of the surge in demand for Spam.
He argued that the company had also supported growth with recently introduced products such as Spam Singles – a single-serve product – and a “gourmet” version of its Hormel Chili.
Mr Ettinger also noted that some of the company’s more expensive products, such as its “party tray” packages of meat, cheese and crackers that sell for around $10, were also seeing double digit sales increases.
“Value is in the eye of the consumer,” he said.
The strong grocery meat sales and lower commodity prices helped Hormel to achieve better-than-expected results in the first half of its fiscal year, despite weaker sales of its refrigerated meals and food to restaurants.
The company said it had seen a fall off in pork product sales as fears over the swine flu virus peaked in early May, but that sales had subsequently recovered.
Its second-quarter earnings were up 3 per cent at $80.4m, or 59 cents per share, while revenue was little changed at $1.60bn.
It guided Wall Street to the upper end of its full-year earnings forecast of $2.15 to $2.25 per share.