Food Cos Push More Ready Meals, Stay Steady On Pricing
2009年2月18日 - 7:18AM
Dow Jones News
Food companies at the largest consumer products conference of
the year highlighted their plans to market more frozen meals and
ready meals to cash-strapped consumers, but said that any
large-scale reduction in product prices was unlikely.
Speaking to investors at the Consumer Analyst Group of New York,
some of the nations largest food companies emphasized the benefits
they are seeing from consumers eating at home. While their
businesses are for the most part holding up well, the large
packaged-food companies were far more cautious than just a year
ago, acknowledging the pressures that are coming from cheaper
retail brands and from weaker consumer spending.
Ahead of the conference, some analysts had speculated that
cereal giant General Mills Inc. (GIS) might raise its guidance for
the year. The company instead stuck to its previous forecast,
saying only that it was on track for a good year in 2009 and that
margins would expand in its fiscal fourth quarter as commodity
prices decline.
Speaking to reporters, General Mills executives said they
weren't planning to roll back prices, partly because the company
has been raising prices at a much slower pace than commodity
inflation. "We never priced to the peak," said Ian Friendly, the
company's chief operating officer for its U.S. retail business.
General Mills is instead focused on driving growth in brands
like its Savorings appetizers and its easy-to-make meals such as
Hamburger Helper.
Like General Mills, ConAgra Foods Inc. (CAG) reaffirmed its
fiscal 2009 earnings guidance of slightly above $1.50 a share. The
company highlighted its efforts to redevelop its Banquet frozen
meals brand to help drive sales among consumers on the lookout for
a bargain. The Banquet meals sell for a suggested retail price of
$1 each. To keep the price at those levels even as commodity prices
rose, the company reworked the product, changing components to keep
the price the same.
Kraft Foods Inc. (KFT) said it expects volume in the first
quarter to fall as much as 5%. In an interview, Chief Executive
Irene Rosenfeld said that some of the decline was caused by recent
price increases. But the company said it expects volume to improve
for the rest of 2009. It has recently cut some prices for its
cheese products, but Rosenfeld said she is in general comfortable
with where its prices currently stand.
Along a similar vein, Sara Lee Corp. (SLE) Chief Executive
Brenda Barnes said the company wasn't planning any wide "rollback
of prices." The company has been pushing frozen meals such as its
Jimmy Dean breakfast bowls. Consumers likely will see fewer price
increases from the food industry gong forward. Sara Lee also said
that given where commodities currently are it doesn't expect major
price increases for the rest of the fiscal year.
Consumers weren't the only ones being frugal this year. The
recession was reflected not only in company comments, but also in
attendance at the annual conference, which gathers together Wall
Street analysts and investors from across the country. Registration
fell to 485 this year from 600 a year ago.
-By Anjali Cordeiro, Dow Jones Newswires; 201-938-2408;
anjali.cordeiro@dowjones.com