http://www.washingtonpost.com/news/business/wp/2015/02/13/your-healthy-eating-habits-are-pummeling-the-packaged-foods-industry/
Since 2015 began, two major producers of packaged food, Kellogg and ConAgra, have downgraded their economic outlook. Last year, Kellogg's profits fell by 62% and Kraft saw a 6.6% fall in purchases in the fourth quarter. This trend is a result of people's changing eating habits over the last few years. People have began to eat less processed and more fresh food, while also paying close attention to ingredients. The rise of the organic revolution has caused a lot of problems for US food producers. These companies are going to have to figure out if they are going to continue producing processed food or switch and produce organic. Obviously for most producers of processed food, the costs will be too great to switch to organic, so those companies must advertise to the section of the population that cannot afford to buy expensive organic food. The organic revolution will be a growing problem for the entire US food industry as more people pay attention to what they eat.
7 comments:
Many of the many processed food companies are losing to newly rising companies that specialize in healthy foods. There are many new products on the shelves that provide low-calorie, low sugar, gluten-free snacks. These products appeal to the shift in our now health conscious society. In order to survive, companies like Kellogg and ConAgra also need to cater more of their products. The competition keeps on increasing. I wonder if Kelloggs and ConAgra will be able to stand with the rise of smaller companies.
I think it is a good news to see that American is heading toward eating healthy. However it's a bad news for packaged fast food company like kraft, and kellogg. With the consumer becoming more educated about dieting, fast food companies are better come up with healthier food options, or make food products with shorter shelf life.
I am also glad to read that United States is more nutritionally aware. However, most packaged food is cheap. Less wealthy families depend on those low prices in order to eat. If more companies turn over to organic foods, then less people will be able to afford that kind of food.
Most of the international food giants make similar products for European markets that are more natural, if not healthier, compared to the same brands and products offered here.
This is interesting to see how our food consumption habits have affected the packaged food industry. It is good to see that Americans are becoming more concerned about their health. However, it will be interesting to see how packaged food companies change their business models to adapt to this shift for food habits in our society. Personally, I think these companies will focus more on targeting people who are not really able to afford the higher prices of organic foods.
This is fascinating to see the capitalist market and their buyers reform what sellers are producing. This is the concept for the capitalist market being the "midwife" and the "undertaker". I do not think that it is too the point that the firms of process food will die but as of right now, if they do not make many changes, that is where they are on their way too.
Most of the international food giants make food for Europe that is more natural (if not healthier) compared to the same products offered here in America - but until now, Americans were relatively unaffected. The profit margins on chemical food are likely much higher.
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