Recession watch: It's Mac & Cheese

07 May 2009

PHILADELPHIA: Sales of Kraft's macaroni cheese dinners Mac & Cheese, which can feed two or more for less than a $1 a head, soared 10% in the first quarter of 2009 as US households turned to cheaper food. Mac & Cheese is a steady performer in recessions, performing strongly in the last major downturn in 1990.

The company's other brands including ready-to-eat frozen pizza brands DiGiorno and Jack's also did well as an alternative to more expensive takeaway food.

Kraft's net sales fell 6.5% to $9.4bn (€7bn, £6.3bn) on currency movements, but the company increased its net profit 10% to $664m. Overall the company has benefited from families choosing to eat at home rather than in restaurants.

Its first quarter profits were hit by a $17m charge for the costs of a precautionary recall of pistachio nuts in the US, which hit sales of its Planters and Back to Nature snacks.

Kraft has been putting extra marketing effort behind ‘value' brands like Mac & Cheese, Kool-Aid and Jell-O, all of which deliver relatively high margins. Its Oscar Mayer cold meats business has also done well as more Americans take a packed lunch to work.

The company said it welcomed recent data showing renewed consumer confidence in the US but said that so far this had not affected sales of its value products.

Data sourced from Financial Times; additional content by WARC staff.