Many people think of food manufacturers as recession-proof, but a report out today from Mintel Reports shows that some food categories are recession-fueled.
"Over the past year, we've seen people trying to save money on food by either dining out less, cutting supermarket bills, or both," said Bill Patterson, a senior analyst at the market researcher.
"More people cook at home now, but they still want healthy, convenient, tasty food and drink for their dollar. As consumers spend less and stay in more, certain food markets are benefiting," he says.
So what are people buying? Think inside the brown bag:
Convenience has been a major trend in American eating habits for many years. In more prosperous times, this might have meant dining out. Consumers now may have less to spend, but they are still as time-pressed as ever. So how do you get food on the table quickly and easily? The solution:
One noteworthy trend inside the "side dish" trend, it's sales of comfort foods such as mac and cheese that's driving the growth.
Need to wash down all that food?
It should come as no surprise that folks aren't splurging on $4 lattes like they used to, but for many people coffee is not a luxury item. What's the impact from all those home brews? Mintel expects to see an increase of 6 percent in retail coffee sales in 2008. That's higher than its original forecast of 2.4 percent.
Mintel expects coffee's growth to continue to be brisk, but one factor that could slow it down a bit is a push toward less expensive coffee drinks at Dunkin' Donuts and McDonald's (NYSE: mcd).
Mintel doesn't get into which food companies are best positioned in this climate, but we've already seen some phenomenal growth from companies like Green Mountain Coffee Roasters (: gmc), which saw sales in its fiscal first quarter surge 56 percent to $197 million from year-ago levels, while J.M. Smuckers (NYSE: sjm) saw an 84 percent jump in its earnings in its fiscal third quarter.
Smuckers may truly be in the sweet spot of this trend. The company not only makes Smuckers jellies and Jif peanut butter, but it recently bought Folgers coffee, which Smuckers says, could double its annual sales.
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