NEW YORK (AdAge.com) -- It turns out there's no recession in eating, though consumers keep looking for more bang for their buck by attempting to produce restaurant-quality results at home.
Opportunities for the marketing and media industries in an otherwise bleak year
Other premium grocery sectors have remained unfazed by consumer trade-down. One is specialty frozen pizza, an area where some scrimping might be expected, but which continues to boom. Here's a look at some at-home hot spots.
She said that not only are more people starting to bake, but those who baked before are baking more. The baking category has grown 15% in the past year, and household penetration for overall baking products, which has been stagnant at 81% for three years, is up 1% for the year and up 5% since June. Ms. Van Velsor pointed to the economy as the reason for growth. "It's a better value to bake at home than buy bakery-priced goods," she said. Besides, "during tough economic times, people want to connect." And baking at home ties into an emotional need.
Moreover, it's not just mixes benefiting from the boom. This baking surge appears to be spurring the woebegone from-scratch baking category as well. General Mills reported sales of its Bisquick and Gold Medal flours up 20% during fiscal-year 2009.
Procter & Gamble sold its Folger's coffee brand to J.M. Smucker last summer, and under new management, co-CEO Timothy Smucker said, the iconic brand experienced "significant sales growth" in March and April. He added that the category as a whole grew double digits in April.
Though double-digit gains in such a mature category may be hard to replicate, he said, "this quarter's result in coffee solidifies our belief in the transaction and provides evidence that our ownership of Folgers will provide significant opportunities."
Two years ago, when Kraft CEO Irene Rosenfeld was beginning her turnaround plan, analysts and shareholders were clamoring for a Maxwell House divestiture. But Ms. Rosenfeld held firm, and promised that a reformulation, restaging and repackaging would do the trick. Looks like she was right: During last week's second-quarter earnings call, she said "solid performance in response to our quality improvements" had resulted in double-digit sales growth for the "Good to the last drop" brand. IRI shows Maxwell House sales up 3% to $346 million.
Kraft also holds licensing rights to California Pizza Kitchen pizzas, and Ms. Rosenfeld noted in last week's earnings call that the company's frozen-pizza division is riding seven consecutive quarters of double-digit sales gains. DiGiorno alone grew 20% in the last quarter.
According to IRI, frozen-pizza sales are up 5%. IRI showed DiGiorno and CPK sales up 12% and 10%, respectively, though, once again, the data exclude Walmart and club stores.
Sarah Grover, chief marketing officer at California Pizza Kitchen, said in an interview that sales and traffic have been problematic for the chain's 200 stores during the recession. And CPK generally fares better than its casual-dining peers. At times like these, she said, her company is particularly glad to partner with Kraft. "People are cooking at home and buying frozen products," she said. Fortunately, she added, "we have products at the grocery store."