Move over Melon, Arugula, and Serrano Ham with Smoked Paprika Dressing, here comes Spam and Eggs. A story in The New York Times notes that production of that rectangular, meatlike object is booming because the times aren’t.

The article quotes a union spokesperson at Hormel’s Austin, MN plant as saying: “Spam seems to do well when hard times hit. We’ll probably see Spam lines instead of soup lines.”

I’ve had a long-standing fascination with Spam, particularly its quirky recipe contest. Who could resist Baked Apples with Spam Strusel (sic), for example? Perhaps the salty, pinkish cubes of “Something Posing As Meat” brings back childhood memories, as it was a reoccurring theme in my mother’s economical kitchen and a must during campouts. I still don’t remember if anyone in the family really liked it, but in those days, liking was not a priority. (To be honest, my mother was and is a fabulous cook, but frugality trumped all.)

Today’s food-dollar distribution is changing, and the days of wretched excess may be numbered. The article cites growth in products like pancake mixes, instant potatoes, rice and beans, macaroni and cheese, Jell-O, and Kool-Aid...and of course, Spam. Not to say that everything we target for the foreseeable future has to taste like a 1950’s church potluck, but right now: thrifty is nifty. So while there’s room for little touches of extravagance, for now, more-economical products speak, and sell, volumes. Maybe Johnny's Spamarama franchises will become the next QSR darling.

Gourmands of the world; don’t despair: SpamWorld has room for you, too. I recommend a 2006 Alamos Selección Pinot Noir with your Romantic Country Salad for Two with Pecan Crusted Spam and Sweet & Sour Dressing.

   –Lynn A. Kuntz

The FDA role in ensuring food safety in the Obama administration will likely expand, according to a recent AP story. A senior campaign advisor is quoted as saying “He (President-elect Barack Obama) thinks this is a fundamental role of government to ensure that people's food is safe, and he has been concerned that we are not in a position to ensure that.”

Among the possibilities: a tracing system for fresh produce to address problems like this year’s tomato/hot pepper/salmonella outbreak, and increased oversight of imported foods, prompted by ongoing problems, particularly with melamine.

This has set off warning bells around the food industry—not only does business find the idea of government regulation distasteful, there’s a strong possibility that part of the new mandate might include industry fees to pay for more FDA inspectors. In this economic environment, the last thing any business wants to do is increase their costs. However, the economy goes both ways, meaning there’s also probably more economic incentive to knowingly or unknowingly cut corners in ways that could affect food safety.

And make no mistake; it’s not an agenda only espoused by those scary “left-wing socialists.” It’s something the American people want according to a new national food safety and labeling poll conducted by ConsumerReportsNationalResearchCenter. The poll finds that a large number of consumers are concerned about food safety, want more frequent government inspections of the food supply more frequently and want the government to publicly disclose where food safety problems arise. Among the findings:

• 73 % currently regard the overall food supply as safe
• 48% said their confidence in the safety of the nation's food supply has decreased
• 54% feel the government is doing all it can to ensure food safety
• 83% are concerned with harmful bacteria or chemicals in food
• 81% are concerned with the safety of imported food
• 81% think the FDA should conduct its inspections of domestic food-processing facilities at least twice a year (vs. the current rate of every 5 to 10 years)
• 82% strongly agree that when food safety problems arise, the FDA should disclose to the public the location of retailers who sold the potentially harmful food,
• 83% want the government to be able to require a recall, quickly and accurately trace food from production to sale

No matter what party holds power, it certainly sounds like a mandate to me.

   –Lynn A. Kuntz

In the food industry, as elsewhere, change may be constant, but a lack of clear communication may cause resistance if not outright rejection. A few words of advice have been offered by Keena D. Lykins, a public relations senior account supervisor at Rhea + Kaiser Marketing Communications, based on her experience with various food and ingredient clients.

   –Lynn A. Kuntz

Chocolate Wars Beg for Communications Best Practices

In September, email loops and chat rooms buzzed with the news that the Hershey Company was using vegetable oil instead of cocoa butter in some of its products. After the news broke, Hershey issued a statement pointing out which products still contained milk chocolate and how the switch improved the flavor of other products. But the information was a little late in coming.

Reactions from friends in the blogosphere already ranged from horror to renouncing all Hershey products as any candy under that brand was now suspect. The latter may seem a bit extreme to some, but for people who ration a daily chocolate allowance, it was a logical step.

These self-professed chocoholics were quite passionate and opinionated. The conversations ranged from the optimal cacao content, the merits of milk chocolate and which manufacturer would now become their preferred source.

Given the enthusiasm many people have for chocolate, Hershey’s ingredients switch without fully disclosing its decision to customers and consumers provides an opportunity to remind everyone (not just Hershey’s) of a few guidelines straight from communications 101:

• Be transparent: Tell your customers about the change. What drove much of the discussion was the feeling of being duped, not that the change had happened.

• Be clear and concise: Know what you need to say, why you need to say it and who needs to hear it. Messages should always be truthful, clear and unwavering.

• Be consistent: Customers will remember what you said last year and won’t be afraid to remind you of it.

• Don’t forget the blogosphere: Remember that people talk, and with the Web readily available to most of us, these conversations range far beyond the front stoop. All aspects of the food industry, like most macro topics, are discussed ad infinitum on the Internet. Vet Web sites and blogs, as needed, to identify credible Web sites and consider developing an interactive communications strategy to address these audiences.

At the end of the day, too, remember that sometimes it isn’t about the message but the product. People who are passionate about a product—whether it’s chocolate, computers or cars—are your repeat customers and the ones most likely to notice change. Being proactive and following the guidelines above are ways to soften the reaction for decisions made and retain customer loyalty.

   –Keena D. Lykins

Despite the fall in fuel prices, the financial effects of U.S. biofuels policy still sends destructive waves surging throughout the food industry. Sherrie Rosenblatt, vice president of marketing and communications, National Turkey Federation, makes a case why current government ethanol policy and the planned bailout for ethanol plants is harmful to the food industry, consumers and the nation.

   —Lynn A. Kuntz

For 30 years the ethanol industry has received subsidies from the American taxpayer. It is an industry that has always been dependent on government largesse for its existence. Perhaps, then, last Friday’s (Oct. 24) announcement by Agriculture Secretary Ed Schafer that the government is considering offering a bailout for distressed ethanol plants shouldn’t have come as a surprise.

Schafer’s remarks are the latest in a long-running debate about appropriate government policy toward ethanol. We simply believe that while ethanol may have a place in the energy landscape, it is high time for the so-called “fuel of the future” to stand on its own two feet without government subsidies or mandates so that the marketplace can work.

For those in the food-producing industries, particularly animal agriculture, the debate couldn’t be more urgent. Today, taxpayers fork over more than $4 billion a year in subsidies to the ethanol industry, while government mandates push about one third of all U.S. corn into ethanol production. This naturally drives up corn prices. For industries like the poultry industry that rely on corn for feed, this price spike means increased operating costs. Turkey production is a corn-intensive process with nearly 70% of the cost of raising a bird tied up in the feed. The results are grim: billions in financial losses and thousands of eliminated jobs in the sorts of rural communities USDA is supposed to be protecting.

But while animal agriculture is riding the rough waves of corn price spikes, USDA is saying that it wants to bail-out the ethanol industry from the impacts of the very price fluctuations for which it is largely responsible. It is just another example of a philosophy that says ethanol gets a generous safety net—other industries are on their own.

Forget the fact that such an approach is manifestly unfair. It is also just plain bad policy. We have already begun to see the food price inflation that comes from higher input costs. There hasn’t been a worse period of food price increases since the early 1980s. Moreover, with all of the money the United States has spent on boosting ethanol production, we’ve offset just four percent of its fuel needs.

Perhaps this is why Secretary Schafer’s comments have been the cause of so much concern. When an investment fails, the conventional wisdom says to not throw good money after bad. But that is exactly what Mr. Schafer indicated he wants to do. In fairness, USDA seemed to be walking back from this position, saying that perhaps these loan guarantees could be made available to others besides just the ethanol industry. Mr. Schafer’s own words speak volumes, when he said supporting corn-ethanol is “Important public policy for the country...we are going to continue to support [the ethanol industry] as much as we can.”

That sort of blind determination to push corn-ethanol at all costs has already cost us plenty. It’s soaking taxpayers, pushing up costs for consumers, hammering animal agriculture and all that for questionable energy and environmental benefit. It’s time for our policy makers to lose the rose-tinted lenses when it comes to corn-ethanol. Let’s analyze the costs and benefits of this policy with some rationality and reason—and maybe restore basic fairness in our agricultural policy.

   —Sherrie Rosenblatt

Warren Buffett wisely said, “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently.” That’s particularly true in the area of food safety, as a new study released today by New York–based Deloitte LLC confirms.

The survey, “Food and Product Safety and Its Effect on Consumer Buying Habits,” finds that, more than half (58%) of consumers changed their buying habits in response to news about product safety and/or quality problems by avoiding such products for more than nine months, on average. This in turn increases the probability they would discontinue using the product or brand entirely. Nearly half (49%) said they were extremely concerned about safety of fresh food and packaged foods and beverages and more than half (54%)were more concerned about the safety of fresh food products than just a year ago. Foreign products are looked on with suspicion by approximately three-quarters of the respondents, with 73% extremely concerned about the safety of products produced in China, and half concerned about the safety of products from Southeast Asia and Mexico.

Since food consumption is universal and modern bulk processing leads to widespread effects, food is front and center in consumers' minds—and their loyalty—when it comes to accidental contamination or intentional adulteration. The food industry can’t afford to relax their vigilance because the stakes are so high...in lives, in profit and in a company’s reputation.

–Lynn A. Kuntz

Once you wade past the 101 incarnations of salsa and jam, the specialty foods segment is a fertile field for new product inspiration. While the numbers are likely to drift with the tides of economy (“2008 is a bit of a challenging year,” admits the National Association for the Specialty Food Trade, NASFT), sales of specialty food products to 2007 from 2005 rose 19% vs. 5.4% for all foods across the board and account for 12.5% of all retail sales according to NASFT. The group’s Fancy Food Show—which unfortunately has taken a hiatus from the Chicago area—has also been one of my favorites for scoping out the trendy, upscale and sometimes bizarre products hitting the retail shelves. After all, with affordable luxuries like Mushroom Profiteroles, Good Wives, Inc., or Robert Lambert’s Dark Cherries Preserved in Merlot Syrup, how can you resist a little indulgence now and then?

A webcast last week, “Today's Specialty Food Consumer 2008,” presented by NASFT, Mintel, and the Food Institute, discussed the typical specialty foods consumer: The largest demographic being 18- to 34-year-olds, raised on these products, comprising an impressive 69% of specialty food consumers (who in turn account for 56% of all consumers), and who are most likely to buy cold beverages, hot tea and prepared meals. Those 65 years and over are least likely to purchase specialty foods, due to well-established food tastes and high likelihood of fixed incomes that make higher-priced specialty items a luxury.

As with the growing popularity of ethnic foods and beverages, the growth is fueled by a well-traveled, global savvy populace looking for something different. The marketplace responded by introducing 700 new beverages, 550 new sauces and seasonings and 525 new bakery products in 2007.

Whether niche or portal to the next biggest thing, these kinds of products make a delicious diversion.

   –Lynn A. Kuntz

As food and beverage manufacturers and retailers search for growth areas during uncertain economic times, they are taking a closer look at private label products. For some, private label raises the hideous specter of those unappetizing black-and-white-labeled bargain brands of the early ‘80s. Depending on how the economy sorts itself out, these plain Jane products may yet make a comeback, but the current buzz involves more trendy, upscale products, such as Safeway’s Eating Right and O Organics brands, and Target’s Archer Farms and Choxie selections.

According to the Private Label Manufacturers Association (PLMA),  “Store brands now account for one of every five items sold in U.S. supermarkets, drug chains and mass merchandisers. They represent more than $65 billion of current business at retail and are achieving new levels of growth every year.”

U.S. private label consumer packaged goods show dollar sales up by 10.1%, or $80.3 billion in sales for the year ended September 2008, says a new report by Nielsen; but unit sales growth was only 0.4%. Nielsen suggests private label growth may be “driven more by higher unit pricing than shoppers switching away from traditional brands.” But these numbers might also be due in part to more spending on upscale, higher margin products.

No one likes to give up on all their indulgences and everyone loves a bargain, especially now. Combining a lower price tag with higher quality sounds like a winning combination that many stores are adding to the mix.

   –Lynn A. Kuntz