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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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1 posted on 05/29/2008 3:20:01 AM PDT by Daffynition
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To: Daffynition

I used to eat SPAM but I don’t eat pork anymore. I did always enjoy the strange consistency of the product when it was cold and a nice fried SPAM w/ mustard sandwich.

2 posted on 05/29/2008 3:24:36 AM PDT by brwnsuga (Proud, Black, Sexy Conservative!!!)
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To: Daffynition

Great for camping....But at home, I’d make a tuna casserole first. People will go back to “pot” cooking...stew, chili, meatloaf...Milk and juice instead of soda..

3 posted on 05/29/2008 3:25:32 AM PDT by Sacajaweau ("The Cracker" will be renamed "The Crapper")
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To: Daffynition
Well,as “Frank” observed in “Slingblade” you just never know what you're gonna find in that “potted meat”.
4 posted on 05/29/2008 3:26:31 AM PDT by SayNoToDems (Will the dancing Hitlers please wait in the wings? We're only seeing singing Hitlers.)
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To: Daffynition

Hmmmmm, fired spam. Good stuff!
According to their price, it works out to about $3.49 a pound. You can buy better cuts of meat for that price.

5 posted on 05/29/2008 3:27:52 AM PDT by caver (Yes, I did crawl out of a hole in the ground.)
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To: Daffynition

For some reason or other SPAM has always been a popular food item in Hawaii ... go figure.

6 posted on 05/29/2008 3:28:53 AM PDT by BluH2o
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To: caver

Wow you can get chuck steak or lean ground beef for $3.49 a pound. I still see good sausages for half that.

I never realized SPAM was such a rip-off, in addition to its more obvious faults.

7 posted on 05/29/2008 3:30:12 AM PDT by underground
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To: brwnsuga
I did always enjoy ... a nice fried SPAM w/ mustard sandwich.

Just the way I like it too! My father never would eat SPAM because he got it every day in the Philippines during WWII.

8 posted on 05/29/2008 3:32:08 AM PDT by JoeGar
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To: caver

That is exactly what I was thinking. Heck, I can get hanger steak for that price. And make a great meal.

I usually buy large cuts, break them down and work out continuous meals with the cuts and leftovers down to stock or soup from the bones or carcass.

People just don’t know how to cook, that’s all.

9 posted on 05/29/2008 3:33:22 AM PDT by doodad
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To: underground; doodad

Yes a lot of people don’t know how to cook. Opening up a can of spam for dinner is usually just being lazy.

10 posted on 05/29/2008 3:39:05 AM PDT by caver (Yes, I did crawl out of a hole in the ground.)
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To: caver

And unusually lazy at that. I do have to laugh at the spam nigiri sushi they have in Hawaii. MMMMMM.

11 posted on 05/29/2008 3:42:01 AM PDT by doodad
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To: All

12 posted on 05/29/2008 4:12:06 AM PDT by WakeUpAndVote (Huh?)
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To: caver
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.

My husband would choose that meal over a steak any day. Not me though.

13 posted on 05/29/2008 4:19:39 AM PDT by Coldwater Creek
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To: Daffynition

Rather eat road-kill. Least you know what it is.

14 posted on 05/29/2008 4:20:55 AM PDT by wolfcreek (I see miles and miles of Texas....let's keep it that way.)
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To: Coldwater Creek

I’m sure that your grandmother is not lazy.

15 posted on 05/29/2008 4:28:09 AM PDT by caver (Yes, I did crawl out of a hole in the ground.)
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To: BluH2o

The convenience stores in Hawaii sell Spam sushi. It’s a slice of Spam on a lump of sushi rice. Hawaiians are also fond of serving Hormel chili over rice. The weirdest combination I saw was called “Loco Moco.” Rice, topped by a hamburger steak and two fried eggs smothered in chili. Had it for breakfast one morning.

16 posted on 05/29/2008 4:34:57 AM PDT by CholeraJoe (Skirting the line between rakishly charming and frighteningly maniacal.)
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To: CholeraJoe

Spam Musubi!

17 posted on 05/29/2008 4:40:47 AM PDT by stayathomemom
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To: silent_jonny; retrokitten; Netizen

Ping to you. Does this thread sound familiar for some reason? ;)

18 posted on 05/29/2008 4:42:02 AM PDT by EmilyGeiger
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To: Daffynition

I don’t think SPAM is all that cheap. For the price of 3 cans, I can buy a large chicken and a bag of potatoes and have roast chicken, taters, gravy and sides/vegs on Sunday, for 4 of us. Then during the week we’ll have hot roast chicken sandwiches, a casserole or fricassee or tetrazzini, a soup or pot pie or dumplings, enchiladas or chicken spaghetti, with whatever staples that are on hand. And all those include leftovers that are taken to work for lunch.

Once when our son was little and things were tight, someone gave us a turkey and I managed to make it last 8 days (until payday), with a different, good meal every night.

19 posted on 05/29/2008 4:55:40 AM PDT by ktscarlett66 (Face it girls....I'm older and I have more insurance....)
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To: Sacajaweau
What drive me crazy at times is that public schools should make mandatory at the high school level a course in basic food cooking.

If you know how to cook and use kitchen appliances, you can make some amazing meals with really cheap food--including doing it from scratch. That's why I premake a lot of my meals in bulk, put them in small plastic containers, and dump them in the freezer for use later (gawd, the bill for all those Rubbermaid brand containers is getting ridiculous... ).

20 posted on 05/29/2008 4:59:26 AM PDT by RayChuang88
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