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As Food Prices Soar, So Do Sales Of Spam
CBSNews ^ | May 28, 2008 | staff reporter

Posted on 05/29/2008 3:20:01 AM PDT by Daffynition

(AP) Love it, hate it or laugh at it - at least it's inexpensive.

Sales of Spam - that much maligned meat - are rising as consumers are turning more to lunch meats and other lower-cost foods to extend their already stretched food budgets.

What was once cheeky, silly and the subject of a musical (as Monty Python mocked the meat in a can), is now back on the table as people turn to the once-snubbed meat as costs rise, analysts say.

Food prices are increasing faster than they've risen since 1990, at 4 percent in the U.S. last year, according to the Agriculture Department. Many staples are rising even faster, with white bread up 13 percent last year, bacon up 7 percent and peanut butter up 9 percent.

There's no sign of a slowdown. Food inflation is running at an annualized rate of 6.1 percent as of April, according to the Bureau of Labor Statistics.

The price of Spam is up too, with the average 12 oz. can costing about $2.62. That's an increase of 17 cents, or nearly 7 percent, from the same time last year. But it's not stopping sales, as the pork meat in a can seems like a good alternative to consumers.

Kimberly Quan, a stay-at-home mom of three who lives just outside San Francisco, has been feeding her family more Spam in the last six months as she tries to make her food budget go further.

She cooks meals like Spam fried rice and Spam sandwiches two or three times a month, up from once a month previously.

Pulling Spam from the shelf prevents last-minute grocery store trips and overspending, said Quan, 38, of Pleasanton, Calif.

"It's canned meat and it's in the cupboard and if everything else is gone from the fridge, it's there," she said.

Spam's maker, Hormel Foods Corp., reported last week that it saw strong sales of Spam in the second quarter, helping push up its profits 14 percent. According to sales information coming from Hormel, provided by The Nielsen Co., Spam sales were up 10.6 percent in the 12-week period ending May 3, compared to last year. In the last 24 weeks, sales were up nearly 9 percent.

The Austin, Minn.-based company, also known for the Jennie-O Turkey Store, has embarked on its first national advertising campaign for the 71-year-old brand in several years. They've credited the sales increase to that, along with new products like individually packaged "Spam Singles" slices. Also helping sales, executives said in an earnings conference call, was the fact that people looking to save money are skipping restaurant meals and eating more at home.

Spam sales are reaching across all spectrums, young and old and rich and poor, said Swen Neufeldt, Hormel's group product manager for the area that includes Spam. Many of the eaters are new to Spam, which was created in 1937 and gained fame as the meat that fed Allied troops during World War II.

"We have significantly increased our household penetration," Neufeldt said. "I think it's a lot of folks that are coming into the brand perhaps for the first time and coming back to the brand."

Fast Fact

According to the U.S. Agriculture Department, prices of staple foods are rising at extremely high rates. White bread is up 13 percent, bacon is up 7 percent and peanut butter is up 9 percent. Hormel began its national advertising campaign, including print and television, for Spam in January. Neufeldt said such campaigns are planned in advance and it wasn't tied to perceived weakness in the economy.

Consumers are quick to realize that meats like Spam and other processed foods can be substituted for costlier cuts as a way of controlling costs, said Marcia Mogelonsky, senior research analyst with Mintel International in Chicago.

These products have protein and decent nutritional value, and they provide some variety to consumers who may be bored because they're eating more at home, she said.

"They might not have Spam at every single meal, but they might supplement a couple of meals," she said.

Consumers are also using more coupons and paying more attention to sales, doing anything they can to save money, she said. You may be able to cut back on your driving due to high gas prices, but you're not going to stop eating because of high food prices, she said.

Quan just bought a couple more cans of Spam on sale and some ramen, the instant noodle dish long a staple on college campuses. Her food and gas budgets are together, so she's had to cut back on food spending while the cost of gas increases. Her favorite Spam meal? Spam and macaroni and cheese. She doesn't skimp on nutrition, though. Quan serves her husband and three children - ranging in age from 4 to 11 - organic vegetables like salads, broccoli and carrots.

"It balances out," she said.

Other companies are seeing similar boosts in their lunch meats. Kraft Foods Inc. reported last month that subsidiary Oscar Mayer, which makes hot dogs, bacon and cold cuts, saw double-digit revenue growth in the previous quarter in its Deli Fresh cold cuts. The company, based in Madison, Wis., has recently introduced new products including family sized deli-meat packs and deli carved, which offers thicker slices of meat.

April Smith has been changing the way she feeds her family in Broken Arrow, Okla., to keep up with rising costs. This summer the 33-year-old administrative assistant will feed her two boys, ages 11 and 8, more ramen for lunch. Normally they eat the noodle soup on Saturdays, but since ramen costs about a dime per pack, they'll get it twice a week. Smith says she'll throw in some leftover frozen vegetables to make it more nutritious.

"Since it's cheap and easy, I figure why not let them eat it twice a week instead of once a week," Smith said.

TOPICS: Business/Economy; Food
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To: Daffynition

Seems the central precept is that by paying more for a canned meat product, they will spend less because there will be no least minute trips to the store for fresh food.

That it is not true is of little consequence because the real message here is “Republican President = SPAM for Dinner.”

21 posted on 05/29/2008 5:06:49 AM PDT by IamConservative (Character: What you do when no one is looking.)
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To: doodad
And unusually lazy at that. I do have to laugh at the spam nigiri sushi they have in Hawaii. MMMMMM.

A favorite of mine.

Now that I think of it, potted meat would probably also make for an interesting sushi. ;-)

22 posted on 05/29/2008 5:09:06 AM PDT by snowsislander
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To: doodad
I cook (and freeze) in bulk, too. I make sauce, chili, soup, goulash base, potroast, chicken....

The chicken...I make and cold. Gravy in the jar is great now.

I call all these...My 5 minute dinners. In's soup (Ramens @ 11 cents) and sandwich.

NO SNACK FOOD....excepting...dunking graham crackers, ginger snaps, cereal....

Grape juice and milk!! No Soda!!

23 posted on 05/29/2008 5:10:22 AM PDT by Sacajaweau ("The Cracker" will be renamed "The Crapper")
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To: Sacajaweau
"People will go back to “pot” cooking..."

My crock pot is my best friend! Cut up some meat and vegies in the AM while waiting for the coffee maker to do its thing, dump 'em in and throw the switch....dinner's done!

24 posted on 05/29/2008 5:14:40 AM PDT by Roccus (The "P" in Democrat stands for Patriotism!)
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To: Daffynition

When I learned that Hormel opened a processing plant in China,I stopped buying Spam. I buy Armour canned meat. Taste just like Spam and states. “MADE IN THE USA” right on the can.

25 posted on 05/29/2008 5:17:20 AM PDT by 4yearlurker (I miss Ronnie!!!!!)
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To: snowsislander

Let’s go full upscale and make pate sushi!

I always kid my daughter that SPAM is pate du spam. It’s even served in a terrine.

26 posted on 05/29/2008 5:21:37 AM PDT by doodad
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To: Daffynition
UGH! Spam is hurricane supplies, emergency food (Y2K). It can sit on the shelf without refrigeration for years until you need it, that is about the most I can say for it.
27 posted on 05/29/2008 5:27:29 AM PDT by Ditter
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To: Daffynition

This is ridiculous. I like Spam sandwiches—but at $2.72 for 12 oz. I can’t afford it.

Instead I bought a seven pound ham this week for .99 per pound. Yes, that’s right, less than a buck a pound for the real stuff.

Last week I bought chicken breasts on sale for $1.00 per pound.

It’s too bad I can’t afford my childhood favorite any more, but there are still food bargains out there.

28 posted on 05/29/2008 5:43:40 AM PDT by wildbill
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To: Coldwater Creek
My grandmother made a Spam dish that was good and she certainly not lazy. Fried in butter, and then simmered in brown sugar and pineapple chunks.

That's exactly how I fixed it for the kids when they were little. It was their favorite meat. We had a freezer full of steaks--home grown--but the treat for them was SPAM fried in butter and brown sugar. They could take or leave the pineapple.

29 posted on 05/29/2008 5:44:14 AM PDT by Pure Country
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To: brwnsuga
Now that you mention it, a Katz Deli pastrami sandwich would taste great right now!

30 posted on 05/29/2008 5:46:53 AM PDT by Daffynition (The quieter you become, the more you are able to hear.)
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To: BluH2o
Yeah? Well, I've seen how the people in Hawaii eat ...

31 posted on 05/29/2008 5:50:04 AM PDT by Daffynition (The quieter you become, the more you are able to hear.)
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To: ktscarlett66

There is no way that one chicken would last that long with 4 people eating. A meal, then hot sandwiches, then a casserole? You have GOT to be kidding—from one chicken. Must have been fed growth hormones to make it the size of a turkey!

32 posted on 05/29/2008 5:50:08 AM PDT by Pure Country
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To: EmilyGeiger; retrokitten; Netizen; Wolfstar; sirchtruth
I have plenty of leftovers :)

Who wants a Spam biscuit with a Spam martini? Breakfast of champions :)

33 posted on 05/29/2008 6:00:51 AM PDT by silent_jonny (Part of me is intrigued and the other part is disgusted at the part that is intrigued.)
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To: Daffynition
Yeah? Well, I've seen how the people in Hawaii eat ...

Hard to tell by the picture but I'm sure there's SPAM being served in some fashion or form.

34 posted on 05/29/2008 6:16:42 AM PDT by BluH2o
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To: silent_jonny; EmilyGeiger; Netizen; Wolfstar; sirchtruth
I have plenty of leftovers :)

Really, I can't imagine why that would be? ;-)

I gotta tell ya, the Spamtini really makes me want to barf.

35 posted on 05/29/2008 6:30:26 AM PDT by retrokitten (Never let someone be your priority while allowing yourself to be their option.)
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To: Daffynition

The daughter of a friend wrote a paper for her high school assignment “Write about the national dish of any country you want to choose.”

She wrote about Spam being the National Dish of Guam.

Teecher in the Publik Skool flunked her.

Mom told Teecher:
1. Daughter IS a native Guamanian (born on base).
2. National dish IS Spam, thanks to WW II.

Daughter got her usual “A”.

36 posted on 05/29/2008 6:53:45 AM PDT by GladesGuru (In a society predicated upon freedom, it is essential to examine principles,)
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To: Roccus

Would that make you a “Pot Hugger”??

37 posted on 05/29/2008 7:15:57 AM PDT by Sacajaweau ("The Cracker" will be renamed "The Crapper")
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To: Daffynition
I guess one day only the uber-rich will be able to afford the delicacies of souse, liver cheese, and rag bologna! Sardines, potted meat, and Vienna sausages for holidays of course!
38 posted on 05/29/2008 7:25:31 AM PDT by Sybeck1 (Ronald Reagan Fought Regulation, John McCain Brought Regulation...)
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To: WakeUpAndVote

I don't like Spam!

39 posted on 05/29/2008 7:29:51 AM PDT by al_c (Avoid the consequences of erudite vernacular utilized irrespective of necessity)
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To: Daffynition

I do miss my Houston St. runs....and Patsy’s pizza in Harlem.

40 posted on 05/29/2008 7:32:34 AM PDT by Roccus (The "P" in Democrat stands for Patriotism!)
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