Skip to comments.As Food Prices Soar, So Do Sales Of Spam
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."
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.
Not gonna touch that!
Some people are just ahead of the times.
According to the article, Spam costs an average of $3.50 a pound. I dont know about the people they interviewed, but I can certainly find a lot more variety of tastier meats for less money than that.
My grocery store had sausage chubs, a dollar a pound last week- fry it up with some taco seasoning, add a tin of refried beans and diced tomatos, top it with forty cents worth of cornbread batter, youve got a meal for four almost as cheap as a pound of spam, and a heckuva lot tastier.
Who needs spam when we get all the fresh meat we need here. Raccoon, possum, armadillo, gator, snake, they’re all there, ya just gotta go pick’em up off the road and save a bundle of cash.
I've heard more and more people are stocking up for economic/muslim attack/natural disasters. I wonder how much of the increased sales are due to this reason?
I’m tellin’ ya, SJ is a trend setter!
Somehow, Spam and organic produce just don't seem to go together for me.
Somehow, Spam and organic produce just don't seem to go together for me.
I always keep a can of Spam for emergencies.
Occasionally, we don’t get to the store in time for a weekend breakfast.
Simple to cut it up in small chunks, saute in garlic and pepper oil and add to scrambled eggs.
Throw in a little onion, green pepper and bingo, a fairly good breakfast.
LOL ... now that you mention it, I haven’t seen it featured in my Whole Foods Market. ;)
I was born in the Philippines and they LOVE Spam over there.
I think it does have something to do with WWII. Things that the military ate became treats to the citizens because they would be given them as gifts or rewards, or as rations. Anything American was very highly esteemed. Up to this day Filipinos love processed cheese and canned corned beef too. My grandfather worked underground for the Americans in some kind of radio operator capacity (we never knew exactly what he did - he died about 5 years after the end of WWII and he never talked about the details with his family). My mom remembers him bringing home Spam and cheese every once in a while.
The BEST crockpot recipe books are by Lynn Alley.
Beans and spam...Camp food...
Spam is part of the Y2K stash, but is not part of the diet as yet.
(...Hormel opened a processing plant in China.)
You just ruined Hormel Chili for me forever.
I was forced to swig down a Dirty Martini without puking out of repect for the person who bought it for me once.
Holding down a Spamtini? Forget about it!!!