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Forget cereal for dinner, SPAM is here to save the day for customers looking to save cash in an inflation-hit economy. <\/p>\n
The CEO of Hormel Foods<\/a>, the owner of the tinned meat brand, was optimistic about the future having posted strong Q1 2024 earnings results which sent share prices<\/a> spiking 15%. <\/p>\n Jim Snee, who also acts as Hormel\u2019s president and chairman, later told CNBC<\/a> he expects strong results in the coming year courtesy of the business\u2019s \u201cprotein portfolio\u201d spanning meat-free alternatives and affordable options. <\/p>\n And in an economy where consumers are facing down \u2018shrinkflation\u2019<\/a> and spiraling food costs<\/a>, this affordable option may prove all the more important. <\/p>\n \u201cThe SPAM brand continues to resonate with consumers,\u201d Snee told Jim Cramer in an interview Thursday. \u201c[SPAM] is a great, affordable source of protein that is meeting all of the consumer\u2019s needs.\u201d <\/p>\n SPAM, which became something of a delicacy during the Second World War and currently retails for around $3.50, was noted multiple times during Hornel\u2019s earnings call<\/a> this week as an area with strong consumer loyalty and space for growth in the coming months. <\/p>\n On the call Snee noted consumer analysts Circana had highlighted \u201cseveral positives for the quarter as we gained or maintained share across many of our products in key categories, including the SPAM family of products.\u201d <\/p>\n He added: \u201cWe expect net sales increases in our International business to be driven by the branded export business led by refrigerated items, Skippy and SPAM and the retail and foodservice channels in China.\u201d<\/p>\n Snee, who joined the business in 1989, isn\u2019t the only food boss pushing his product as a lower-cost alternative for families looking to tighten the purse strings<\/a>. Food is getting more expensive month-to-month, and is expected to tick higher. <\/p>\n The CPI for all food items increased 0.6%<\/a> from December 2023 to January 2024 and was 1.2% higher than January last year. Restaurant prices are up 5.1% compared to the same time last year. <\/p>\n These figures have prompted the likes of Kellogg\u2019s CEO, Gary Pilnick, to suggest that families struggling financially should turn to the likes of cornflakes for dinner<\/a>. He told CNBC<\/a>: \u201cConsumers are under pressure\u2026 so we\u2019re advertising about cereal for dinner, if you think about the cost of cereal for a family versus what they might otherwise do, that\u2019s going to be much more affordable\u2026<\/p>\n \u201cIn general, the cereal category is a place that a lot of folks might come to, because the price of a bowl of cereal with milk and with fruit is less than a dollar. So you can imagine why a consumer under pressure might find that to be a good place to go.\u201d<\/p>\n PepsiCo<\/a> is also asking consumers to get creative with their carbs. At an industry conference in Florida last week, CEO Ramon Laguarta said he hoped consumers would use salty snacks, such as Doritos and Rold Gold pretzels, as \u201cside dishes and ingredients<\/a>\u201d in meals, extending their purpose beyond a midday or late-night munchie.<\/p>\n Where Pilnick was blasted on social media for being out of touch with reality, Snee positioned Hormel Food\u2019s range as being a central component of a wider, healthy diet. <\/p>\n With this in mind the New Mexico State University alumni said he\u2019s similarly not losing sleep over increasing public interest in weight-loss drugs like Ozempic. Lars Fruergaard J\u00f8rgensen, CEO of the creator of the appetite suppressant Novo Nordisk<\/a>, has even said panicked food retail bosses have called him<\/a> seeking assurances about the company\u2019s plans to rollout the product. <\/p>\n \u201cA couple of CEOs from, say, food companies have been calling me,\u201d J\u00f8rgensen told Bloomberg<\/a>.\u00a0\u201cThey are scared about it.\u201d<\/p>\n Although J\u00f8rgensen didn\u2019t name any individuals executives at some businesses have been open about a potential shift in customer behavior. Walmart\u2019s U.S. boss, John Furner<\/a>, said in October that the company was already beginning to see a material impact on its sales thanks to its Ozempic-using customers.\u00a0<\/p>\n \u201cWe definitely do see a slight change compared to the total population; we do see a slight pullback in overall basket,\u201d Furner said. \u201cJust less units, slightly less calories.\u201d<\/p>\n \u00a0By contrast, Snee said Hormel\u2019s offering could answer to medical concerns over frailty<\/a> in those eating smaller amounts of food: \u201cWe are so well positioned with this protein portfolio \u2026 one of the things we are very intentional about is balance. We think about affordable protein, we think about indulgent protein, we think about natural and organic protein, we\u2019ve got meat and non-meat protein. <\/p>\n \u201cNo matter how you think about our portfolio you\u2019re going to encounter protein which is a really important part of any diet program, especially with these new weight-loss drugs that are all the rage.\u201d <\/p>\n<\/div>\nRising food prices<\/h2>\n
The Ozempic effect<\/h2>\n
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