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The Food Institutes

Food Industry Review, 2009 Edition


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Compiled By:
Corinne Casella, Megan Myers & Henry Mollman

Copyright 2009 by The American Institute of Food Distribution, Inc.

The Food Institutes


Food Industry Review, 2009 Edition
Table of Contents
RETAILING FORMATS.
1- 37
Top Concerns Facing the Industry.. 1
Consumers Top Food Safety Concerns.. 1
Merchandising Strategies Used By Retailers...2
Top Food Retailers and Wholesalers In 2008 3
Availability & Use of Grocery Departments and Services.. 4
Avg. Supermarket Performance Measures. 6
Top 25 Food Retailers .7
In-Store Money Saving Behavior.8
Inside the Market Basket..9
Top Factors in Selecting A Primary Store..10
2008 Supermarket Industry Sales...11
Top 10 Worldwide Food Retailers In 200812
Top Alternative Formats.... 13
Household Penetration, 2002-200714
Supermarket Industry Overview, 2008.. 15
U.S. Retail Food Store Operating Costs 16
Top Grocery Co-Ops .17
Total Membership Club Industry Sales, 200818
Worldwide Membership Club Industry Forecast, 2009 19
Membership Club Industry Sales And Units Forecast, 2008-201319
Membership Club Industry Department Sales Estimates, 2008.19
Membership Club Industry Sales By Region, 2008. 20
Membership Club Industry Forecast, 2008-2012. 20
Membership Club Industry Sales 1998-2008 20
Membership Club Market Share, 2008. 21
Membership Club Volume: Breakdown Between Food And Non-Food Items 21
U.S. Supercenter Industry Sales & Market Share, 2007-2008.. 21
Supercenter Industry Est. Food & Sundries Sales, 200822
Supercenter Industry Food & Non-Food 2008 Estimated Sales 23
Supercenter Industry Forecast 2009 By Company... 23
Supercenter Industry Unit Forecast, 2008-2013... 24
Supercenter Industry Unit Growth, 1999-2008 24
Top 20 Drugstore Chains By Sales 2008... 25
Top Convenience Store Chains 26
Top C-Store Franchise Chains, 2008 27
2008 Top 25 Convenience Store Chains. 28
Top 10 Company-Operated Chains.. 29
Success Rate of New Products. 29
Americas Top 25 Convenience Wholesalers.. 31

Dollar Stores Present and Forecast Market Share. 31


Dollar Stores Growth By Income Dollar % Chg. vs. Year Ago 32
Characteristics of Store Formats 33
Market Share For Grocery & Consumables By Store Format... 34
Anticipated Compound Annual Sales Growth Rate Vs. Inflation: 2008-2013..35
FOOD PROCESSING.37-74
2007 U.S. Food Manufacturing 37
2006 U.S. Food Manufacturing 38
Top 25 Food Processing Companies 2008 39
Department Level Dollar & Unit Sales, % Change Versus Year Ago. 41
Top 10 Growth Categories Unit Sales, % Change 2008 vs. 2007. 42
Largest Price Increases, All Outlets 2008 vs. 2007.. 43
Dollar Sales of Snack Foods By Category 44
Top Food Processors: Snacks, Appetizers, & Side Dishes 46
Top Carbonated Soft Drink Brands.. 48
Top Carbonated Soft Drink Companies 2008... 48
Top 10 Brands of Refrigerated Fruit Drinks, 2008... 49
Top U.S. Liquid Refreshment Beverage Trademarks... 50
U.S. Liquid Refreshment Beverage Market..52
Top Food Processors: Fruits & Vegetables.. 54
Top-Selling Frozen Pizza Brands. 55
Top Ingredient-Related Chains On U.S. Ice Cream Introductions, 2008. 56
Sales of Frozen Desserts... 57
Top U.S. Chicken Processors 58
Top Food Processors: Meat & Poultry. 59
Quarterly Sales of Low Fat and Skim Milk.. 60
Global Dairy Drinks Consumption Growth.. 61
Confectioners Merger & Acquisition Activity 2003-2008... 64
Top 10 Premium Chocolate New Product
Claims.. 65
IRI- Tracked Premium Chocolate Sales by Company. 66
Top Food Processors: Bakery.. 67
Sales of Cookies and Cookie Bars 68
Top Selling Cracker Vendors 69
Top Category Growth Private Label. 71
Top Global Food & Alcohol Brands 72
Top Food Processors: Meals & Entrees 74
PRODUCT LAUNCHES.75-86

PRIVATE LABEL.87-107
Private Label Sales In Supermarkets: Dollar & Unit Volume, 2008
87
Supermarkets & Drug Chains Unit & Dollar Share. 89
Regional Shares of Private Label Products.............. 90

Private Label Sales In Supermarkets: Top 10 Dollar & Unit Gains, 2008.. 91
Private Label Sales In Supermarkets: Top 5 Private Label
Categories by Unit Volume, 2008 91
Private Label Sales In Supermarkets: Five Year Unit Volume Sales Trends.. 92
Regional Combined Channels: Private Label Dollar & Unit Volume. 93
Private Label Sales In Supermarkets: Top 20
Private Label Categories by Unit Volume 94
Private Label Sales In Supermarkets: Dollar & Unit Share.. 95
Top Brands of Novelties 97
Private Label Sales In Supermarkets: Top 10 Dollar & Unit Volume Gains, 2008...98
Top 5 Most Valuable Global Brands... 100
Private Label Sales In Supermarkets: Five Year Market
Share Trends in Dollars and Units.. 103
Private Label Sales In Supermarkets: Five Year Dollar Volume Sales Trends. 104
Private Label Sales In Supermarkets: Top 20
Private Label Categories by Dollar Volume.. 104
Private Label Sales In Drug Chains: Top 10 Categories By Dollar & Unit Volume 105
Private Label Sales In Drug Chains: Top 10 Categories By Dollar & Unit Volume 106
Private Label Sales In Drug Chains: Dollar & Unit Share By Dept.. 107
Private Label Sales In Drug Chains: Dollar & Unit Volume/ Share.. 107
ORGANIC, NATURAL AND SPECIALTY FOODS.108-122
Sales Of Specialty Food By Retail Channel, 2008. 108
Dollar Sales Of Specialty Foods. 110
Unit Sales Of Specialty Foods 112
Total U.S. Retail Specialty Food Dollar Sales, 2008.. 114
Where Do Consumers Shop For Natural, Organic And/Or Health Food 117
Specialty Food Product Introductions, 2008...121
RESTAURANTS & FOODSERVICE.123-145
Restaurant Industry Food-and-Drink Sales Projections For 2009.. 124
2008-2009 Regional/State Eating-Place Sales..125
Top 20 Broadline Distributors. 126
Top 10 Broadliner Percent Sales Increases, 08 vs. 07..127
Top 10 Broadliner Dollar Sales Increases, 08 vs. 07127
Top 20 Full-Service Chains.128
Top 20 Limited-Service Chains128
Top 10 Fast-Casual Chains By Sales Growth.. 129
Chains Ranked By % Increase In Sales...130
Chains Ranked By Increase In Sales Volume..130
Chains Ranked By Increase In Units.. 130
Emerging Full-Service Italian Chains 131
Top Full Service Italian Chains.. 131
Top Full Service Italian Chains Units 132
Top 20 Independent Restaurants, 2008.. 132
Emerging Full-Service Steak Chains... 133

Emerging Full-Service Mexican Chains. 133


Top Full Service Steak Chains.133
Top Full Service Mexican Chains.. 134
Top Full Service Steak Chains Units...135
Emerging Full-Service Varied Menu Chains.. 135
Top Full Service Varied Menu Chains 135
Emerging Limited Service Chicken Chains 136
Top Limited Service Chicken Chains. 136
Top Limited Service Chicken Chains Units 136
Emerging Limited Service Hamburger Chains 137
Top Limited Service Hamburger Chains. 137
Top Limited Service Hamburger Chains Units137
Emerging Limited Service Other Sandwich Chains138
Top Limited Service Other Sandwich Chains. 138
Top Limited Service Other Sandwich Chains Units 138
Top Full Service Varied Menu Chains Units. 139
Emerging Limited Service Bakery Caf Chains. 139
Top Limited Service Bakery Cafe Chains... 139
Top Limited Service Bakery Cafe Chains Units. 140
Emerging Limited Service Beverage Chains... 140
Top Limited Service Beverage Chains 140
Top Limited Service Beverage Chains Units. 141
Emerging Limited Service Mexican Chains 141
Top Limited Service Mexican Chains. 141
Top Full Service Mexican Chains Units. 142
Top Limited Service Mexican Chains Units142
Emerging Limited Service Pizza Chains. 145
Top Limited Service Pizza Chains.. 145
Top Limited Service Pizza Chains Units. 145
VENDING146 153
Categorical Breakdown of Vending Sales, 2008. 146
Food Sales At Vending.. 147
Number of Candy/Snack/Confection Products Introduced To Vending 148
Candy/Snack/Confectionary Products Gaining The Most Distribution In 2008. 148
Top 15 Vended Refrigerated Food Products149
Top 15 Vended Frozen Food Products 149
Vending Sales By Category. 150
Number of Vending Machines By Category.. 151
Candy/Snacks/Confection Sales. 153

DEMOGRAPHICS OF CONSUMER FOOD SPENDING.154-373


Explanations and Definitions154-158
Introductions. 159-164
Average Household Expenditures 1998-2007
Average Household Food Expenditures: Ten Year History 165
Food At-Home vs. Food Away-From-Home... 166
Average Annual Household Food Expenditures. 167
Food At-Home Expenditures .. 168
Food Away-From-Home Expenditures169
Average Household Expenditures 1998-2007
Food At-Home Expenditures: By Category- Pie Chart. 170
Food At-Home Expenditures: By Category- Bar Graph 171
Fruits and Vegetable - By Category 172
Cereal and Bakery Products - By Category 173
Dairy Products - By Category 174
Meats, Poultry, Fish & Eggs.. 175
Average Annual Household Food Expenditures: 2000-2007 176
Meats, Poultry, Fish & Eggs Expenditures 2003-2007.. 177
By Category 178
Fruits and Vegetable Expenditures 2003-2007.. 181
By Category 182
Cereal and Bakery Products Expenditures 2003-2007... 184
By Category 185
Dairy Products Expenditures 2003-2007 186
By Category 187
Other Food At Home Expenditures
2003-2007: Sugar & Sweets 188
Other Food At Home Expenditures 2003-2007: Fats and Oils 189
Other Food At Home Expenditures 2003-2007: Misc. 190
Other Food At Home Expenditures
2003-2007: Non-Alcoholic Beverages 191
Pre-Tax Income
Average Annual Household Food Expenditures 193
Food At-Home vs. Food Away-From-Home.. 194
Income Up To $50,000 195
Distribution of Expenditures... 196
Income Over $50,000.. 197
Distribution of Expenditures 198
Income of Single Consumer 199
Distribution of Expenditures 200
Food Spending As A Percent of Annual Expenditures-Income Up To $50,000. 201
Food Spending As A Percent of Annual Expenditures-Income Over $50,000... 202
Age
Average Annual Household Food Expenditures. 204
By Age Group.. 205

Food At-Home vs. Food Away-From-Home.. 206


Meats, Poultry, Fish & Eggs-By Category.. 207
Fruits & Vegetables-By Category... 210
Cereals & Bakery Products. 212
Dairy Products. 212
Distribution of Food Expenditures.. 213
Food At-Home-Pie Chart. 214
Food At-Home-Bar Graph216
Food Spending As A Percent of Annual Expenditures219
Age & Pre-Tax Income
Average Annual Household Food Expenditures:
Under 25
Average 220
Distribution.. 221
At-Home.. 222
25-34
Average 225
Distribution. 226
At-Home..227
35-44
Average 230
Distribution. 231
At-Home..232
45-54
Average. 235
Distribution 236
At-Home 237
55-64
Average.. 240
Distribution 241
At-Home. 242
65 and up
Average 245
Distribution.. 246
At-Home.. 247
Gender
Average Annual Food Expenditures: Females 252
Average Annual Food Expenditures: Males 253
Gender & Age
Average Annual Household Food Expenditures. 254
Food At-Home vs. Away-From-Home: Females.255
Food At-Home vs. Away-From-Home: Males.256
Distribution of Food At-Home Expenditures: Females... 257
Distribution of Food At-Home Expenditures: Males.. 258
Gender & Pre-Tax Income
Average Annual Food Expenditures: Females 259

Average Annual Food Expenditures: Males 260


Food At-Home vs. Food Away-From-Home.. 261
Distribution of Food At-Home Expenditures: Females.. 262
Distribution of Food At-Home Expenditures: Males.. 263
Race & Ethnicity
Race
Average Annual Household Food Expenditures. 266
Average Annual Food Expenditures... 267
Distribution of Food Expenditures.. 268
Distribution of At-Home Food Expenditures.. 269
Food Spending As A Percent of Annual Expenditures270
Ethnicity
Average Annual Household Food Expenditures. 271
Food At-Home vs. Food-Away-From-Home.. 272
Distribution of Food Expenditures.. 273
Distribution of At-Home Food Expenditures.. 274
Food Spending As A Percent of Annual Expenditures275
Region
Average Annual Household Food Expenditures 278
Total Food Expenditures Bar Graph 279
Food At-Home vs. Food-Away-From-Home. 280
Distribution of Food Expenditures.. 281
Distribution of At-Home Food Expenditures.. 282
Food Spending As A Percent of Annual Expenditures283
Food Spending By Age 284
Region & Age
Average Annual Household Food Expenditures:
Under 25
Average 285
At-Home vs. Away-From-Home 286
Distribution. 287
25-34
Average 288
At-Home vs. Away-From-Home 289
Distribution. 290
35-44
Average 291
At-Home vs. Away-From-Home 292
Distribution 293
45-54
Average.. 294
At-Home vs. Away-From-Home... 295
Distribution 296
55-64
Average.. 297
At-Home vs. Away-From-Home 298

Distribution 299
65-74
Average 300
At-Home vs. Away-From-Home 301
Distribution . 302
75 & Up
Average 303
At-Home vs. Away-From-Home 304
Distribution . 305
Region & Income
Average Annual Household Food Expenditures
Northeast 306
Food At-Home vs. Away-From-Home 307
Distribution of At-Home Expenditures ...308
Midwest309
Food At-Home vs. Away-From-Home 310
Distribution of At-Home Expenditures... 311
South ................................................................... 312
Food At-Home vs. Away-From-Home 313
Distribution of At-Home Expenditures ....314
West .....................................................................315
Food At-Home vs. Away-From-Home 316
Distribution of At-Home Expenditures .. 317
Metro Areas
Average Annual Household Food Expenditures
Northeast.. 320
Food At-Home vs. Away-From-Home 321
Midwest ...............................................................................322
Food At-Home vs. Away-From-Home.323
South............................................................................ 324
Food At-Home vs. Away-From-Home 325
West ................................................................................ 326
Food At-Home vs. Away-From-Home................ 327
Metro Area Maps
Annual Food At-Home Expenditures . 328
Annual Food-Away-From-Home Expenditures . 329
Urban Distribution
Average, Distribution of Annual Expenditures330
Distribution of Annual At-Home Food Spending331
Career of Head of Household
Average Annual Household Food Expenditures..334
Food At-Home vs. Food Away-From-Home... 335
Food Spending As A Percent of Annual Expenditures336
Food At-Home vs. Food Away-From-Home:
Wage & Salary Workers . 337

Food Spending As A Percent of Annual Expenditures:


Wage & Salary Workers.. 338
Distribution on Food Expenditures.................................. 339
Distribution of At-Home Food Expenditures ..340
Meats, Poultry, Fish & Eggs - By Category 341
Fruits and Vegetable- By Category..342
Cereal and Bakery Products................................. 343
Other Food At-Home . 344
Food Spending As A Percent
of Annual Expenditures .. 345
Composition of Household
Average Annual Household Food Expenditures..348
At Home Food Expenditures .. 349
Distribution of Food Expenditures...350
Food Spending As A Percent of Annual Expenditures351
Education of Head of Household
Average Annual Household Food Expenditures..354
At-Home Food Expenditures .. 355
Distribution of Food Expenditures...356
Food Spending As A Percent of Annual Expenditures357
Size of Household
Average Annual Household Food Expenditures..360
Food At-Home vs. Food Away-From-Home... 361
At-Home Food Expenditures .. 362
Distribution of At-Home Food Spending ...363
Distribution of Food Expenditures...365
Earners in Household
Average Annual Household Food Expenditures. 368
Distribution of At-Home Food Spending 369
Distribution of Food Expenditures...371
Food Spending As A Percent of Annual Expenditures372
Population
Total. 374
Females ... 375
Males ... 376

CONSUMER PRICE INDEX .. 377-442


All Items.. 377
Food & Beverages378
Food. 379
Food-At-Home. 380
Food Away-From-Home. 381
Nonalcoholic Beverages.. 384
Alcoholic Beverages ... 389

Cereal & Bakery . 394


Meat. 402
Fish.. 413
Eggs. 416
Dairy ... 417
Fruit & Vegetables.. 420
Other Foods. 431
PRODUCER PRICE INDEX 443-583
Farm Products. 443
Processed Food & Feeds.. 444
Grains... 445
Cereal & Bakery.. 453
Meat 458
Poultry. 465
Fish . 468
Eggs (Farm) 478
Eggs (Processed). 482
Dairy 483
Milk. 495
Fruit (Farm) 497
Fruit & Vegetables (Processed)... 514
Vegetables (Farm)525
Nuts.. 544
Sugar & Confectionary Products 548
Beverages 555
Fats & Oils.. 567
Sauces, Spreads & Condiments... 571
Canned Food 575
Frozen Foods .. 578
Miscellaneous Products... 580

MERGERS.. 584-650
Overview. 584
Food Industry Merger & Acquisition Activity 20032008. 585
Merger & Acquisition Activity By Category
Restaurants 591
Merger & Acquisition Activity 2003-2008..591
Deals Closed in 2008 593-614
Deals Announced But Not Closed in 2008.. 615-618
Supermarkets 619
Merger & Acquisition Activity 2003-2008..619
Deals Closed in 2008 620-626
Deals Announced But Not Closed in 2008.. 627-628

Convenience Stores 629


Merger & Acquisition Activity 2003-2008..629
Deals Closed in 2008 630-642
Deals Announced But Not Closed in 2008.. 643-645
Other Retailers... 646
Merger & Acquisition Activity 2003-2008..646
Deals Closed in 2008 647-650
Deals Announced But Not Closed in 2008.. 650

2009 Food Industry Review


FOREWORD
As retail sales in the U.S. fell in 2008 for the first time since the government began keeping
records 40 years ago, food-based retailers took a bigger share of all retail trade. Foodbased retailers accounted for 23.6% of all retail trade in 2008 well above the 22.4% share
held in 2007 and 22.2% in 2006. The reverberating impact of consumers cutting back on retail expenditures and the highest food price inflation in 28 years contributed to the change.
Food price inflation during 2008, for all food, both at-home and away-from home, hit 5.5%
during the year. Meanwhile, the recession forced consumers to more closely watch their
budgets, and food expenditures was a primary area where they could exercise significant
control. As a result, food and beverage store sales accounted for 1.3% of all retail sales in
2008 up sharply from the 9.8% level of the prior two years. Foodservice and drinking place
sales, meanwhile, took a 10.3% piece of the retail pie, compared to 12.6% in 2007 and
12.4% in 2006.

Food-Based Retailing Accounts


For
23.6% Of Retail Trade
Warehouse
Clubs &
Supercenters
8.0%

Motor Vehicles
& Parts Dealers
18.0%

Furniture &
Home Furnishing
Stores
4.9%

Foodservice &
Drinking Places
10.3%

Food &
Beverage Stores
13.3%
Building &
Garden
Supplies
7.3%

All Other
5.5%

Other General
Merchandise
9.0%

Electronics/
Appliance
Stores
2.5%

Clothing Stores
4.9%

Gasoline
Stations
10.9%

Health &
Personal Care
Stores
5.6%

Since 1985, The Food Institute has scoured thousands of information sources, and hundreds of periodicals in print and online, association reports, government data and industry
studies, all of which are digested into the Food Industry Review. This is a direct extension of
the Food Institute Report, which has been produced each week since 1928 following the
same concept. As always, the 2009 edition is chock full of information on supermarkets,
warehouse clubs, c-stores and foodservice operators. And with the plethora of information
now available online, it has never been more important to have access to information in one
place on the entire food industry, from farm to fork.

RETAILING FORMATS

... The weak economy is weighing heavily on consumer minds as well as their spending, and
food retailers need to continue to offer new and innovative private label products and keep
abreast of new technologies and trends to solidify consumer loyalty. Non-traditional store
formats are gaining ground on traditional supermarkets, but both traditional and non-traditional designs need to carry the strategies learned during the economic downturn into the
future to ensure success.
FMI SPEAKS: STRONG SALES INCREASE OFFSET BY INFLATION
Supermarket industry sales increased 5.2% in 2008, and identical-store sales rose 4.5%, but
these gains were offset by the 5.7% food-at-home inflation rate last year, according to the
2009 Food Retailing Industry Speaks: Annual State of the Industry Review released by the
Food Marketing
TOP CONCERNS FACING THE INDUSTRY
Institute (FMI).
(Source: The Food Marketing Institute's Food Retailing Industry Speaks 2009)
Adjusted for inImpact in
Impact in
Anticipated Impact
flation, sales
2007
2008
2009-2010
Factor
declined 0.5%
(On a 10-Point Scale)
and identicalLocal and National Economy
5.9
7.8
8.7
store sales fell
7.3
7.4
8.0
1.2%. Overall in- Competition From Other Retailers
7.4
7.2
7.6
dustry net prof- Healthcare Costs
Credit/Debit Card Interchange Costs
7.0
7.1
7.4
its decreased to
Food Safety
6.7
6.8
7.1
1.43%, from
Local, State & Fed. Gov't Regulations
5.3
5.9
7.1
1.82%, due to
7.5
7.2
6.9
the impact from Energy Costs
Consumer Obesity/Health & Wellness Trend
5.1
5.4
5.8
the weakened
Technology Investments
5.7
5.4
5.8
economy. IndeTrade Relations Between Manufacturer and
pendent retail5.7
5.4
5.7
Retailer/Wholesaler
ers (defined as
companies with between one and 10 stores) posted the highest net profits and identicalstore sales increases at 1.9% and 5.11%, respectively.
Regarding the future, retailers reported increasing concern over the impact of numerous issues, notably the economy. The impact of issues, measured on a one-to-10 scale with 10
being the highest, increased for almost every issue, comparing the rating in 2008 with the
expected impact in 2009/2010. For the first time in the six years FMI tracked concern levels, retailers rated the impact of
Consumers' Top Food Safety Concerns
two, competition and the econ(Source: FMI's U.S. Grocery Shopper Trends 2009)
omy, at eight or more. The econ53% omy received the highest rating
Bacteria/Germ Contamination
by a large margin at 8.7. The
economy registered a 5.9 rating
47%
BSE (Mad Cow Disease)
as recently as 2007. In response
to consumer demand for lower45%
Product Tampering
cost foods, supermarkets are responding three ways. Some 78%
43%
Pesticide & Herbicide Residues
of companies are increasingly emphasizing low prices, up from
69% in 2008. Retailers are also
41%
Terrorist Tampering
featuring private brands more
1

MERCHANDISING STRATEGIES
USED BY RETAILERS IN 2008
(Source: FMI's Food Retailing Industry Speaks 2009)

% of Companies
Offering

Strategy
Private label/Store brands

97.5%

Deli

94.1%

Fresh, Prepared Food For Takeout

94.0%

Reusable Bags

90.5%

Fresh Seafood

88.1%

Ethnic Foods

87.1%

Butcher Available to Cut Meat to Order

83.5%

Floral/Plant Shop

83.5%

Expanded Specialty Cheese Section

82.1%

Natural/Organic Section

76.2%

Multiple Tiers of Private Brands

75.9%

Scratch/Bake-off Bakery

74.1%

Fresh, Prepared Foods to Consume In-Store

73.8%

Private Label Organic Products

71.1%

Gift Cards To Other Retailers

71.1%

Health/Nutrition Information

70.2%

Coffee Bar

63.1%

In-Store Pharmacy

61.9%

Catering

58.3%

Sushi Station

54.8%

Space For Cooking Demonstrations

46.4%

Quick Stop Area for "Tonight's Dinner"

43.4%

Frequent Shopper Program

42.9%

Online Shopping

42.9%

Gas Pumps

38.8%

prominently. Private brand products now


comprise 9% of the items carried in a typical
store, an increase from 8% in 2008 and 7%
in 2007. About 93% of retailers plan to increase the number of these products.
Private label now accounts for 15% of supermarket sales, up from 14% in 2008 and
11.5% in 2007. Private brand sales increased
10.8% in 2008, more than twice the industrys overall growth rate and well above the
2.5 growth rate for manufacturer brands.
Lastly, about half of all supermarkets offer
savings through frequent shopper or loyalty
card programs, and rate their success at
7.3, up from 6.4. Some 69% of consumers
claim the recession is affecting their grocery
shopping, according to FMIs 2009 U.S. Grocery Shopper Trends report. The typical
company added 2,000 new products to
store shelves and removed the same
amount. About 25% of food retailers added
and removed at least twice as many items,
changing the mix of more than 20% of the
products carried in their stores. However,
supermarkets are looking to be competitive
in ways besides price.

Nearly all (97%) emphasize perishables to


gain a competitive advantage and give it the
Cooking Classes
37.3%
highest success rating at 8.1, although this
Wireless Internet for Shoppers
31.3%
figure is down from 8.4 in 2008. In addition, 68.4% are focusing on consumer wellness and family health as a competitive strategy,
rating its effectiveness at 5.6. Retailers continued efforts to spend their ad dollars more effectively, relying less on the mass media and more on targeted campaigns. In fact, newspaper advertising fell below half of ad spending to 48.6%, from 52.2% the previous year.
... In order to survive the current and ongoing recession, food companies need to take into
account the importance of bringing in and keeping consumers using the tactics outlined in
the previous two reports.
TOP 10 COMPANIES SALES VOLUME REMAINS STEADY IN 2008
The 75 largest food retailers and wholesalers in the U.S. and Canada combined to produce
$893.1 billion in revenues in 2008, up 7.6% from the preceding year, according to Supermarket News Top 75 list. The sales volume includes revenues from both food and nonfood merchandise for the companies current or recently ended fiscal years. The volume increase
reflects both the high levels of food inflation, estimated at about 5% to 6% for the year, combined with traffic growth at the chains on the list. The 10 largest companies on the list accounted for about 68.7% of the total volume on the list, the same proportion as a year ago.
2

Those 10 largest food retailers had combined revenues of $613.2 billion, up 7.5%, or $42.9 billion, over year-ago levels. They accounted for about two-thirds of the increase in volume among
the entire Top 75. The top 20 companies on this years list had revenues of $732.9 billion, up
about 7.6% over year-ago volume levels. Those 20 largest operators accounted for 82.1% of the
total volume among the Top 75, almost exactly the same as a year ago.

Top Food Retailers and Wholesalers In 2008


(Source: Supermarket News' Top 75)

Rank Company
1

Wal-Mart Stores

Corporate Stores Owned


3,395

Sales in $ Billions
$258.5 (est.)

Volume total represents combined sales of Wal-Mart Supercenters, Sams Clubs, Neighborhood Markets and Marketside
stores in the U.S. and Canada. Wal-Mart operates 2,601 supercenters in the U.S. and 39 in Canada, plus 146
Neighborhood Markets and four Marketside stores in the U.S., accounting for approximately $211 billion (82%) of the
companys volume in North America; and 599 Sams Clubs in the U.S. and six in Canada, accounting for approximately
$47.5 billion (18%) of the North America total. Wal-Marts annual sales in 2008 are estimated at $405 billion,
encompassing $258.5 billion, or 64%, from supercenters, clubs, Neighborhood Markets and Marketside stores; $44.5
billion, or 11%, from 1,164 discount stores (899 in the U.S. and 265 in Canada); and approximately $102 billion, or 25%,
from 2,970 stores outside North America.

Kroger Co.

4397

$77.2 (est.)

Krogers store base includes 2,477 supermarkets and multi-department stores; 778 convenience stores; 750 supermarket
fuel centers; and 392 fine jewelry stores. Sales from convenience stores account for approximately 5% of total volume,
and sales from fine jewelry stores account for less than 1% of total volume.

Costco Wholesale Corp.

544

72.5 (act.)

Revenues include sales of $71 billion and membership fees of $1.5 billion. Groceries, encompassing food, sundries and
fresh products, plus pharmacy and gasoline, account for 63% of the sales total, or $44.7 billion. Of the companys total
sales, 78% comes from 398 warehouses in the U.S. and Puerto Rico; 15% from 75 warehouses in Canada; and 7% from 39
warehouses in the UK, Japan, South Korea and Taiwan.

Supervalu

2491

$45.0 (est.)

Sales from 1,596 corporate stores encompassing 1,279 conventional supermarkets and 317 Save-A-Lots account for 75% of
total revenues; the company also licenses 863 Save-A-Lots and 32 Cub Foods stores. Supervalus supply side division accounts for
25% of total revenues.

Safeway

1,743

$44.8 (est.)

Loblaw Cos.

1036

$31.5 (U.S. est.)

Loblaw operates 628 corporate stores under a variety of banners and supplies 408 franchised stores that also operate
under a variety of banners; it also supplies product and banners to 399 associated stores that it does not own or lease.

Publix Super Markets

990

$24.0 (est.)

Publix acquired 49 stores from Albertsons LLC in mid-2008, 24 of which reopened during fiscal 2008; of the remaining 25,
most are expected to reopen this year, although the company had not decided by the end of 2008 whether to reopen
all locations.

Ahold USA

704

$21.8 (act.)

Ahold USA, the U.S. division of Amsterdam-based Ahold, encompasses 376 units of Stop & Shop, Quincy, MA; 180 Giant
Foods of Landover, MD; and 148 Giant Foods of Carlisle, PA. Ahold USA accounts for approximately 57% of the parent
companys total sales.

Delhaize America

1581

$19.2 (est.)

Delhaize America, the U.S. division of Brussels-based Delhaize Group, encompasses 1,148 Food Lions, 167 Hannaford
Bros. Markets, 108 Sweetbay Supermarkets, 69 Harveys Supermarkets, 61 Bloom units and 28 Bottom Dollar Food stores.
Delhaize America accounts for approximately 69% of the parent companys total sales.

10

C&S Wholesale Grocers

$19.0 (est.)

As 2008 ended, C&S purchased the wholesale business of Penn Traffic Co., amounting to about $210 million. C&S
volume does not include sales from two retail subsidiaries: GU Family Markets, which operates 30 locations in the
Northeast; and Southern Family Markets, which operates 41 supermarkets and 10 liquor stores in the Southeast under the
Southern Family and Piggly Wiggly banners. During 2008, C&S supplied products to 12 companies on the Top 75 list,
whose volume is reflected in the sales total for C&S as well as for each of those companies individually.
3

... The reason that the top 10 companies have remained fairly steady over the past few years
is that they have learned to listen to what consumers are asking for, and deliver it. Food retailers face a tough situation in the future, and introducing new company policies, technologies and improving overall efficiency will help ensure that there will be a future.
RETAILERS INTRODUCE NEW TECHNOLOGIES
Many retailers are using new technologies aimed at improving consumer shopping experiences, adding convenience and improving business practices. Two unnamed U.S. grocerystore chains are testing an electronic shelf label (ESL) system in several of their stores on
the East and West coasts, reported RFID Journal (Mar. 30). The ESL system created by Altierre comprises of radio frequency identification (RFID)-based technology and LCD display
screens that attach to store shelves in order to identify products and their prices. Each ESL
includes an RFID chip, which stores the products stock-keeping unit (SKU). Pricing updates
for these items are received electronically via an internet connection. Employees who utilize
a handheld interrogator can also manage the system. On average, consumers purchase
around 10% more during
every visit and increase the
Availability & Use of Grocery
frequency of their visits by
another 10% when using the
Departments and Services In 2008
scanners, stated Paul Schaut,
(Source: FMI Grocery Shopper Trends 2009)
Modiv Media Inc.s chairman
%
Use
At
Least
%
Primary
Store
Product / Service
and chief executive officer.
Once a Week
Provides
Mr. Schaut also claimed that
Savings Club/Frequent Shopper Prog.
59%
42%
about 10% of consumers
Private Label/Store Brands
42%
92%
Health & Nutrition Information
29%
71%
choose to use the scanners
Reusable Shopping Bags Available
28%
75%
when they are available.
Locally Grown Products
Exciting Store Environment
Self-Checkout
Fresh-Food Deli
Gas Pumps
Dietitian / Nutritionist
In-Store Bakery
Natural/Organic Food
In-Store Health Clinics
In-Store Recipe Kiosks
Selection of Ready-To-Eat/
Heat-and-Eat Foods
Home Delivery
Butcher Available
Coffee Bar
Drive-Up Pharmacy
Fresh Seafood
Gourmet/Specialty Food
Olive Bar
Made-To-Order Sandwiches/Pizza
Expanded Gourmet Cheese Sect.
In-Store Pharmacy
Online Ordering
Sushi station
Expanded Houseware Section
Gift Cards to Other Stores
Sit-Down Eating Areas

27%
26%
22%
19%
19%
15%
14%
13%
12%
11%

50%
62%
52%
90%
31%
6%
85%
81%
8%
27%

11%

83%

10%
7%
7%
7%
7%
7%
7%
6%
5%
5%
5%
5%
4%
4%
3%

15%
63%
29%
14%
73%
69%
22%
56%
55%
70%
31%
19%
41%
64%
46%

% based on the # of respondents whose primary store provides the product or feature
4

Stores just cant keep up


with fast price changes, according to Sunit Saxena, Altierres chairman and CEO.
With the ESL system, a store
can update product information displayed on 10,000
items in less than an hour.
Stores that use the system
typically install two RFID
readers capable of controlling 25,000 shelf labels
across a sales floor measuring 50,000-sq. ft. Altogether,
RFID technology allows retailers to eliminate millions of
paper labels a year.
Aholds Stop & Shop introduced Modiv Media Inc.s
Scan It! hand-held scanning
devices in several of its Con-

necticut stores in early 2009, reported the Hartford Courant (Apr. 12). As consumers walk
down the aisles, the devices enable them to keep a running total of the groceries they scan
and bag. Customers then pay at a self-service station at the end of their shopping trip without having to take anything out of their shopping carts. Further, the scanner alerts consumers of manufacturer discounts, some of which are offered exclusively via the scanner
program. Walgreen Co. made its in-store promotional displays more effective by using the
Goliath system, a marketing intelligence system that tracks display execution at store level,
reported Chain Drug Review (Apr. 6). Using long-range RFID technology, Goliath determines
the location of specially tagged displays and tracks their movement and removal throughout
each 24-hour period. With this system, retailers can remedy incorrectly executed displays
and determine optimum placement for future displays. The results have been impressive,
stated Walgreen vice president of purchasing David Van Howe. Over the past year our instore execution has grown to nearly double the industry average.
MAJOR OPPORTUNITIES ABOUND IN SUSTAINABLITY PROGRAMS
Reducing waste, limiting carbon emissions and developing sustainable agriculture are the
three pillars food retailers should build on in creating programs to address consumers
growing environmental concerns in 2009 and beyond, claims a Coca-Cola Retailing Research
Council Global Retail Perspective, Sustainability in Retailing. At the same time, such programs can improve retailers customer service, operating efficiencies, profitability, and reputations. Indeed, food retailers should view environmentally friendly policies as an
opportunity to cement customer relations in a highly effective way, while also benefiting
from efficiencies.
For example, many efficiencies flow from reducing waste. Retailer participation opportunities depend largely on cooperation with suppliers, especially in terms of supply chain collaboration relative to such initiatives as eliminating or reducing packaging, rethinking interim
packaging required for store delivery, redesigning store delivery of bulk items, and downsizing materials needed for shelf displays. The report cites as a success story the reusable
green trays pioneered by Tesco nearly a decade ago and subsequently adopted by many retailers to replace packaging. The green trays made 222 million trips globally in 2007, saving
an estimated 130,000 metric tons of cardboard. Eliminating or reducing packaging is an important focus. For example, H-E-B turned reusable bags into a top seller with prominent
checkstand displays.
Reducing carbon output by reducing fuel/energy consumption is a significant environmental
opportunity that is simultaneously a huge financial benefit. Retailers of all sizes are capturing lighting and refrigeration savings, frequently in cooperation with power providers.
Stores are being designed and constructed to use less energy. Supervalu included energy efficiency in a 180 remodel. Lighting, refrigeration, and mechanical equipment were all reviewed for savings prior to scoping and design. Truck fleets are benefiting from a host of
logistic management programs, truck designs, and fleet upgrades. Winn-Dixie, for example,
upgraded its fleet in 2008 with computer-shifted transmissions, fairing to reduced wind resistance, low profile tires, and trailer refrigeration units with greater capacity and efficiency.
Of the three pillars, developing sustainable agriculture has the greatest potential, but tends
to be new territory for food retailers. However, retailers, producers and suppliers are beginning to collaborate in promoting farming techniques that protect soil fertility and preserve
dwindling clean water supplies. Tesco, for example, has a code of practice, Natures Choice,
5

that emphasizes water assessment and management. Balls


(Source: Progressive Grocer's Annual Report of the Grocery Industry)
Hen House created a program
2008
2007
2006 '08 vs. '06
that brought farmers market
Sales Volume ($ Millions)
$15.46
$15.31
$14.68
5.3%
products into the store, made
Selling Area (Sq. Ft.)
33,250
33,300
33,398
-0.4%
weekly bundles of seasonal food
# of Checkouts
69
72
70
-1.4%
products available to customers
Avg. Weekly Sales
for the entire growing season at
$ Per Store
$297,308 $294,423 $282,368
5.3% a fixed price, and initiated a
$ Per Sq. Ft.
$8.94
$8.84
$8.45
5.8%
farm-to-school lunch program.
$ Per Checkout
$30,970
$31,658
$30,362
2.0%
Key to the program was the set
$ Per Household
$92.25
$91.98
$89.26
3.3%
of relationships with farmers. It
is important, suggests the report, that the retail industry take a strong leadership role, especially in engaging the consumer, in developing next steps. Retailers will need to be able
to effectively measure impacts, review all aspects of their operations, and use technology as
effectively as possible to not only satisfy customer concerns and needs, but to also reap
productivity gains and help maintain a sustainable planet.

Avg. Supermarket Performance Measures

RETAILERS CUT VARIETY TO INCREASE EFFICIENCY


The retail industry is enacting wide-reaching changes, influenced by the varied repercussions of the 2008-2009 recession. A multitude of factors are forcing food retailers to make
adjustments to their philosophy just as consumers adjust their own purchasing considerations, possibly permanently. Supermarkets and other food retail outlets are re-evaluating
everything from large-scale expansion plans down to the products that fill store shelves in
an attempt to maximize efficiency. Some of the largest retailers, including Wal-Mart Stores
Inc. and Kroger Co., were expected by industry executives and analysts to reduce product
assortment by at least 15% in 2009, according to The Wall Street Journal (June 26). By devoting more resources to a limited amount of goods and brands that occupy the same
space, retailers hope to benefit through addition by subtraction. Although the prospect of
reducing variety in supermarkets is not particularly new, the retail environment changed
since retailers added more items in an attempt to compete with Wal-Mart and Costco Wholesale Corp. in the 1990s. Nearly 47,000 distinct products filled a typical food retailers
shelves by 2008, an increase of over 50% from 1996, according to data from the Food Marketing Institute. Reacting to the need for more products, Mintel data found that producers
in the packaged goods industry launched 47,113 new products in 2008, more than double
the amount introduced in 1998.
Today, consumers are shopping with slimmer budgets and investors are responding more
to sales growth in existing stores than to new store expansion. Retailers are also having an
easier time identifying which products are worth keeping and which are not through the implementation of customer information databases containing sales and individual shopping
behavior. Technological improvements, combined with the advent of loyalty cards and customer membership programs, made this information more accessible than ever before. Not
only does the information in the databases predict surges in demand and prevent items
from going out-of-stock, they also grant leverage in negotiations with distributors, retailers
claim.
Another change in the contemporary retail environment is the success of private label and
house brands. With the perception of quality of private label brands approaching that of na6

tional brands in
Top 25 Food Retailers
the minds of con(Source: STORES Top 100 Retailers)
sumers, shelf
'08 Revenue
% Y/Y '08 Earnings
% Y/Y
No. of
% Y/Y
space is occupied Rank Company
($ Billions)
Chg.
($ Billions)
Chg.
Stores
Chg.
1
Wal-Mart
$405.6
7.2%
$13.4
7,873
8.4%
5.3%
by house brands
2
Kroger
$76.0
8.2%
$1.3
3,654
-0.2%
5.8%
more often. Wal3
Costco
$72.5
12.6%
$1.3
544
5.0%
18.5%
Mart re-launched
5
Target
$64.9
2.5%
$2.2
1,682
5.7%
-22.3%
its 5,000-item
6
Walgreen
$59.0
9.8%
$2.2
6,934
15.6%
5.7%
Great Value
7
CVS Caremark
6,981
10.8%
$48.9
8.7%
N/A
N/A
11 SUPERVALU
$44.6
1.2%
($2.9)
2,421
-2.1%
brand, while TarN/A
12
Safeway
$44.1
4.3%
$0.9
1,739
-0.2%
8.7%
get is reformulat13 Rite Aid
$26.3
8.1%
($2.9)
4,901
-2.5%
N/A
ing its
15 Publix
$23.9
4.0%
$1.1
1,044
7.4%
-8.0%
private-label
16 McDonald's
$23.5
3.2%
$4.3
31,967
1.9%
80.1%
household goods
17 Ahold USA
711
0.9%
$21.8
4.0%
N/A
N/A
18 Delhaize America
$19.2
5.9%
N/A
1,594
1.5%
line. Private label
N/A
$19.2
29.2%
$0.6
N/A
N/A
35.5%
goods will occupy 19 Amazon.com
6,320
1.7%
22 7-Eleven
$16.7
14.9%
N/A
N/A
a larger portion of
23 Pilot Travel Centers
$16.5
32.0%
N/A
342
5.9%
N/A
those big-box re25 Alimentation Couche-Tard
$15.6
1.4%
N/A
5,480
7.1%
N/A
tailers shelves,
26 H.E.B.
$14.6
8.5%
N/A
322
3.5%
N/A
and inevitably, na- 28 Meijer
186
2.8%
$14.3
3.2%
N/A
N/A
33
Yum!
Brands
$11.3
8.3%
$0.9
36,292
2.7%
6.1%
tional brands will
35 Dollar General
$10.5
10.1%
$0.1
8,362
2.1%
N/A
be removed to
36 Starbucks
$10.4
10.3%
$0.3
16,680
11.1%
-53.1%
make room for
38 BJ's Wholesale Club
$10.0
11.2%
$0.1
180
1.7%
9.5%
the higher mar40 A & P
$9.5
48.7%
($0.1)
436
-2.5%
N/A
gins possible with 42 The Pantry
$8.9
30.2%
$0.0
1,653
0.5%
18.9%
house brands.
The viability of private labels is allowing retailers to be more selective with inventory decisions and provides power for retailers to wield over distributors and manufacturers.
Retailers are now working to decrease the number of items offered, appealing to bargainseeking customers who want to simplify their shopping trips and return to what is familiar.
Customers can be confused by the large number of products available, often making product selection more difficult than is necessary. Catherine Lindner, Walgreens divisional vice
president for marketing development, stated that the constant addition of more items to
shelves only left customers feeling bombarded. Over the past 10 years, the number of items
in a Walgreen store rose more than 19%, but the number purchased per trip increased only
2% as customers end up buying nothing when forced to select from such an assortment, Ms.
Lindner claimed. Research conducted by Wal-Mart found that customers spent an average
of 22 minutes in a Wal-Mart store and suggested that wide product variety decreased the
number of items a customer placed in their shopping baskets.
... The reason retailers need to keep up-to-date on consumer trends, desires and needs because there is too much competition to risk losing a dedicated customer. Consumers have
come to the point that loyalty to one store does not override the fact that money may be
tight. Proper aggressive pricing is fundamental to keeping a store relevant in the eyes of
the value-minded consumer.
CHANNEL MIGRATION: CONSUMERS SEARCH FOR VALUE
In the face of recession, more consumers are visiting multiple consumer product goods
7

(CPG) channels
to meet their
(Source: FMI's U.S. Grocery Shopper Trends, 2009)
shopping
needs. Some
53%
56% of 2009s
46%
consumers
claim to shop
40%
39%
in five or more
36%
35%
retail channels
30%
28%
26%
in order to
26%
25%
25%
meet their
22%
22%
21%
needs, with
17%
59% of consumers shopping at
multiple stores
in search of the
Make a
Look For
Participate in
Look For
Buy
Compare
Stock Up
Use Coupons
Shopping List
Grocery
Savings Club Coupons In Store/Private
Prices At
When An
Received In
lowest price,
Specials
Program
Newspapers
Brands
Different
Item Is On
Store
according to InStores
Sale
formation ReAlmost Every Time
Never
source, Inc.s
Times and
Trends Channel Migration: The Blurring of Shopper Loyalty Report (August). These channel
migration patterns reinforce the notion that the need for value remains strong and consumers are willing to shop wherever they can to attain that value. Benefiting the most from
this shopper influx is the supercenter channel, with 65.9% of households shopping the
channel. Dollar stores are also seeing the benefit, with 53.8% of households claiming to regularly shop the channel.

In-Store Money Saving Behavior In 2008

Consumers are also making more trips for goods. As the price of gasoline dropped in 2009,
average purchase occasions per household across all shopping channels increased 3.5%
over 2008. Dollar stores benefited the most from this increase, with average purchase occasions per household increasing 10% versus 2008. With trip frequency again making positive
strides, average per-trip expenditures moderated slightly. Though down from 2008, when
CPG prices were especially high, average basket size is growing at a reasonable rate. Opportunity to grow basket size still remains but is dependent on the ability to tie marketing
strategies to key shopper needs. For example, dollar store basket size increased 5% versus
last year. Much of that growth stems from center store categories such as spaghetti sauce,
rice and salad dressing. While supercenters continue to gain share across departments,
other channels are also demonstrating gains in select departments. Mass merchandisers
gained a 0.1-point change in the frozen foods category in 2009, the most of any channel,
where as club stores experienced a 0.3-point gain in the fresh/perishable foods category in
2009. As meal-away-from home prices were expected to increase 3.5% to 4.5% in 2009,
meals eaten at home wete also expected to rise. For retailers of food and beverages, this allowed for significant growth.
Amidst changes in consumer shopping behavior, grocery club and dollar store retailers are
holding onto and even growing share among top channel shoppers. Grocers loyal shoppers, in particular, appear to stay within the channel. However, across some channels, including supercenters and dollar stores, some heavy shopper dollars are going to other
8

channels. For example, heavy dollar store shoppers are spending more in the grocery channel, while heavy club shoppers are allocating an increased share of spending to supercenters. The heavy grocery category gained a 1.5-point dollar share in 2009 versus 2008,
while the heavy dollar category gained a 0.5-point dollar share.
RETAILERS CAN DRIVE PROFITABLE GROWTH WITH GOOD PRICING STRATEGIES
Consulting firm Willard Bishop defined a series of retail pricing guidelines that supermarket
operators used in 2009 to strengthen their price image, build transactions and drive profitable growth in their report Retail Pricing 2009: 12 Trends That Are Driving Success in
Willard Bishop Competitive Edge (December). In a consumer environment that features much
reduced personal wealth, rising joblessness, expenditure reduction and rising food costs,
grocery retailers need to develop sharper pricing strategies and implement them more intensely than ever before. However, far from being a defensive strategy to limit losing customers from traditional supermarkets to supercenters, limited-assortment units and dollar
stores pricing guidelines can be positioned as an opportunity to provide consumers what
they need at the price they want. The result can be the profitable expansion of a grocers
business.
The most important tenet of developing a profitable pricing strategy is to understand that
such programs do not deliver results quickly. To make them work, retailers have to commit
long-term and stay the course with determination to realize larger transactions, sales
growth and profit increments. Moreover, those strategies should be applied at the category
level, and each category in the store needs to be assigned a role, such as destination, routine, convenience, etc. and an intent, such as transaction-building or profit-generating.
But technology is very important too, and advanced pricing technologies such as price management and price optimization systems are integral to success. However, unregulated use
of pricing technologies can have disastrous consequences, and it is vital to use them with
the firm guidance of a comprehensive pricing strategy. The Willard Bishop report also points
out that price optimization cycles at leading chains are accelInside the Market Basket
erating - partly due to rapidly
(Source: PG's Consumer Expenditure Survey 2009)
changing economic conditions,
2008 Total Retail
% Dollars in
% Dollars in Mass
but also because of increasing
Sales ($ Millions) Supermarkets
Supercenters
$349,797.69
45.3%
14.8%
experience with price optimiza- Total Grocery
Alcoholic Beverages
$40,642.04
41.3%
6.7%
tion technology, annual and
Grocery-Food
$196,203.95
56.5%
17.2%
semi-annual cycles are being reGrocery-Nonfood
$11,951.70
27.3%
18.0%
placed with four-to-six weeks
Perishables
$336,337.51
66.2%
13.8%
timing in some cases. Retailers
Bakery-In-Store
$9,636.93
88.0%
12.0%
Bread, Baked Goods
$22,006.94
63.1%
17.5%
have found that, initially, price
Dairy
$60,493.54
68.0%
16.7%
optimization brings gains, but
Frozen Foods
$44,313.59
66.5%
17.7%
the benefits tend to erode over
Deli-In-Store
$15,862.47
89.0%
11.0%
time. Frequent re-optimization
Deli-Refrig.
$8,689.07
65.3%
17.9%
maintains those benefits.
Meat, Fish, Poultry
$84,057.50
63.3%
22.8%
Central to the development of a
pricing strategy is understanding how to strengthen the retail
stores relationship with the

Packaged Meats
Fresh Produce
Floral
Other Categories
GRAND TOTAL
9

$15,304.87
$70,245.79
$5,726.81
$902,470.73

65.9%
65.3%
13.8%

18.9%
11.5%
3.1%

$1,588,605.93

27.1%

16.9%

customer. The traditional mass market mantra, in which all shoppers receive the same
prices and offers, does not work as well in the current economic climate. It is important to
be able to achieve what Willard Bishop terms scaleable customer intimacy. For example,
this can mean developing value propositions for defined clusters of targeted shoppers and
deploying a variety of carefully selected new media to reach them, including shopper cell
phones, kiosks, shelf-edge devices and personal scanners. Indeed, during 2008, there were
major changes in retailer price communication efforts due to the recognition among leading
chains that efforts at creating a price image are wasted unless the message is well communicated. While this includes general savings-based messages, signage, promotional shelf
tags and display merchandising, also included are endcaps with large, bold signs visible
across the store and similar tactics.
Allied with this point is the importance of enhancing promotional spend effectiveness. The
Willard Bishop report warns against basing promotions strictly on supplier funding and simply repeating what was promoted the same week a year earlier. Instead, a good strategy
calls for promotions to be founded on such criteria of growing incremental sales, improving
price image and maximizing supplier ROI. Vital to the creation of a price image is to increase the sophistication of retailers private label. This means offering consumers not only
the basic national brand equivalents, but also providing several tiers of choice, including
premium private brands and second-tier/value private label. Premium brands differentiate a
retailer, and many grocery chains report that this tier is on a fast-track growth trend. However, a value brand can be an outstanding instrument for creating a price image. Designed
to provide the best value in the category, such items appeal to specification buyers who
seek extreme values, frequently at low-price outlets competing with the grocery channel.
The Willard Bishop report also points out that price image benefits flow from focusing on
key items and key shoppers. Retailers are achieving results by selecting known-value items
using criteria such as sales at the chain and in the market, as well as sales with the merchants top
shoppers.
Top Factors in Selecting A Primary Store
(Source: FMI's Grocery Shopper Trends 2009)

Natural/Organic Products

N/A
2%
75%

Low Prices

37%

High Quality Fruits &


Vegetables
High Quality Meat
Clean/Neat Store

72%
4%
69%
3%
68%
2%

Items On Sale/Money-Saving
Specials

66%
9%
65%

Product Selection and Variety

16%
65%

Convenient Location
Products with Use Before/ Sell
By Dates
Store Layout Makes It Easy To
Shop
Fast Checkout

13%
N/A
1%
49%
2%
49%
1%
Very Important Factor
Overriding Factor

10

However, the
report warns
that there is a
distinction
between
products that
show price
sensitivity
and those
that are price
elastic. Price
sensitivity includes, but
goes beyond,
price elasticity. Just because
consumers
buy larger
quantities of

an item when it is priced low, or is an elastic item, does not mean that the product at a discounted price will be a strong driver of store visits and image. It is important for retailers to
carefully identify those items that impact price image and trigger store visits.
Retailers do not exist in a vacuum, and a key guideline is to maintain constant surveillance
of competitors prices. Indeed, grocery chains are more often conducting competitive price
checks with outside services, such as Retail Data LLC, to ensure timely and accurate information. In addition, working closely with manufacturers relative to pricing strategies is an
important activity. A progressive application of price optimization technology, for example,
calls for retailers to model proposed supplier deals through retailer price optimization systems to estimate the expected impact of deals and programs and category performance. Industry leaders are hedging their bets by carefully honing their pricing strategies to develop
sales and profits.
MORE RETAILERS LOWER PRICES IN RESPONSE TO COMPETITION
More retailers are lowering prices to attract budget-conscious consumers increasingly heading to discount stores. Vons lowered prices on about 5,000 items, or about 15% of the merchandise at
2008 Supermarket Industry Sales
each store, in its
(Source: Progressive Grocer's Annual Report of the Grocery Industry)
274 Southern
Number of
Sales
California
% of Total
% of Total
($ Millions)
Stores
stores, reported
Supermarkets ($2 million or more)
35,394
100.00%
$547,125
100.00%
Chain
Supermarkets
(11
or
more
stores)
29,022
82.00%
$517,214
94.53%
The Los Angeles
$2-$4 million
2,694
7.61%
$7,800
1.43%
Times (Sept. 2).
$4-$8 million
6,597
18.65%
$34,978
6.39%
The discoun$8-$12 million
3,688
10.42%
$35,017
6.40%
$12-$20 million
5,100
14.41%
$75,109
13.73%
ters have picked
$20-$30 million
5,183
14.64%
$116,684
21.33%
up more busi$30-$40 million
2,327
6.57%
$73,309
13.40%
ness, and the
$40-$50 million
1,418
4.01%
$57,604
10.53%
$50 million and over
2,015
5.69%
$116,713
21.33%
traditional groIndependent Supermarkets
cers are re6,372
18.00%
$29,911
5.47%
(10 or fewer stores)
sponding,
$2-$4 million
2,202
6.22%
$6,117
1.12%
$4-$8 million
3,657
10.34%
$17,969
3.28%
stated Tom
$8-$12 million
358
1.01%
$2,234
0.59%
Keller, president
$12-$20 million
130
0.37%
$1,841
34.00%
of Vons, a divi$20-$30 million
15
0.04%
$331
0.06%
$30-$40 million
5
0.01%
$148
0.03%
sion of Safeway.
$40-$50 million
4
0.01%
$165
0.03%
Vons lowered its
$50 million and over
1
0.00%
$106
0.02%
prices in 2008,
By Supermarket Format
but is furthering
Supermarkets ($2 million or more)
35,394
100.00%
$547,125
100.00%
discounts due
Conventional
26,811
75.75%
$360,781
65.94%
Supercenter
(grocery
+
mass
merch.)*
3,253
9.19%
$147,044
26.88%
to the weak
Supermarket, limited-assortment
2,521
7.12%
$11,733
2.14%
economy and inSupermarkets-natural/gourmet foods
2,176
6.15%
$19,798
3.62%
creased compeWarehouse grocery
458
1.29%
$3,463
0.63%
Military commissary
175
0.49%
$4,305
0.79%
tition, stated
Other Food Formats
Mr. Keller. The
Convenience**
144,459
N/A
$320,326
N/A
retailer noticed
Gas Station/Kiosk
19,926
N/A
--N/A
Superette
13,441
N/A
$17,969
N/A
that customers
Wholesale club stores
1,184
N/A
$107,389
N/A
who used to
Military
416
N/A
$2,452
N/A
spend $40 on a
*Supermarket-type items only.
**Excluding gas
bottle of wine
11

are now spending $20. Meanwhile, Safeway increased purchase limits of its so-called Super
Price Coupons. Prior to the week of Aug. 17, 2009, each coupon had a one-item limit. Now,
while some coupons still have a one-item limit, others allow two, three or more items, reported Supermarket News (Sept. 1). Four Super Price Coupons are usually offered each
week.
Ralphs is also making significant reductions in produce prices and other goods. Both are
using yellow tags and signs to call attention to the reduced prices. The chains are managing
the cuts due to a steep price decline in many food commodities including milk and grains as
well as reductions in shipping expenses due to a drop in oil prices, reported The Los Angeles Times. Ralphs controls 18.2% of the grocery market in Los Angeles and Orange counties,
according to research firm Shelby Report. Vons is No. 2 with about 14.8%. Albertsons, which
has also reduced prices on many products in recent months, is No. 3 with 12.4% and Trader
Joes is No. 4 with a 6.3% share. Stater Bros., which cut prices on about 4,000 items and
held the line on about 2,000 in July in its
Top 10 Worldwide Food Retailers In 2008
166 stores, is No. 5 with 6.1%. Of the top
(Source: Supermarket News' Top 25)
five, only Stater Bros. and Trader Joes
Sales
No. of
Headquarters gained share in the first quarter of 2009
Company
($ Billions)
Stores
Wal-Mart
$401.2
7,873
U.S. compared to the first quarter of 2008.
Carrefour
$117.3
15,430
France Everybody has been lowering prices beTesco
$99.7
4,300
UK cause everybody is aware that the cusMetro Group
$98.6
2,195
Germany tomer is price-conscious. The question for
Schwarz Group
$80.9 e
9,300
Germany consumers is who is delivering the lowest
Kroger
$76.0
3,637
U.S. prices, noted Stater Bros. chief executive
Rewe
$73.4 e
13,000
Germany Jack Brown.
Costco

Aldi
Auchan

$71.0
$65.7 e
$57.8

544
9,000
2,777

U.S.
Germany
France

Chicago-area Dominicks, the regions


second-largest grocery chain with an 11%
e. Estimated.
market share, according to Nielsen, is cutting prices on some items by up to 30% in response to increasing competition. The chain,
owned by Safeway, did not specify an average price reduction. The reductions will apply to a
range of products at Dominicks 81 Chicagoland stores, reported The Chicago Tribune (Aug.
27). The move follows a reduction implemented by Jewel-Osco, which boasts the areas
highest market share at 39%, noted Nielsen. Jewel launched its Big Relief Price Cut, which
cut prices by up to 20%, in April. Price competition is increasing, and its not everywhere,
but its in an awful lot of places and its kind of a coming thing, stated Jim Hertel, a managing partner with Willard Bishop. Aholds Giant Food and Stop & Shop launched initiatives
that will double the number of sale items each week. The retailers also introduced new shelf
tags and in-store signage, along with redesigned loyalty cards. Customers can register their
cards online and create their own shopping profile, view store services and track savings
and reward programs.
... While appropriate pricing is a major factor in store survival, size does matter in the food
retail market. In response, some of the biggest companies are adapting to the changing
U.S. consumer and their needs. Changing the size of the store may be a way to convince
customers that some of the largest companies are more consumer-oriented and flexible.
ALDI PROVIDES ALTERNATIVE TO LARGER, MORE EXPENSIVE SUPERMARKETS
Aldis unique, smaller selection ensures lower prices, regular turnover and allows for
12

tremendous buying power with is suppliers. Aldi


often sells its private label products for 40% less
than similar products at larger supermarkets,
and between 16% to 24% less than at discount
stores. The limited assortment chain carries
1,300 products, significantly less than the standard 45,000 items at other supermarkets.

Top Alternative Formats In 2008


(Source: Supermarket News)
A=Actual sales E=Estimated Sales
# of
'08 Sales
Stores
($ Billions)
Company
1 Wal-Mart
3,395
$258.5 E
2 Costco Wholesale
544
$72.5 A
3 7-Eleven
6,142
$17.0 E
4 Meijer
185
$13.7 E
5 BJ's Wholesale
177
$10.1 E
6 Dollar General
8,308
$9.5 E
7 Whoel Foods
278
$8.0 A
8 Trader Joe's
326
$7.2 E
9 Aldi
991
$6.2 E
10 Wawa
570
$5.7 E

Aldi stores are designed to cut costs by eliminating in-store banking, pharmacies, bagging
clerks, check cashing, and photo processing. In
addition, stores are typically open only during
peak hours9AM to 7PM or 8PM Monday
through Saturday and 12PM to 5PM on Sunday
allowing the company to cut back on electrical
and other operating costs. Aldi operates more than 950 stores in the U.S., (8,500 worldwide). In 2008, more than 100 new stores were opened throughout the U.S., including entry
into two new markets, Rhode Island and Florida. There are plans to open 100 more new
stores in 2009, including expanding into Texas.
BASHAS FILES FOR CHAPTER 11 BANKRUPTCY
Bashas Inc., the Chandler, AZ-based 77-year-old grocery chain with 158 stores, filed for
Chapter 11 protection in U.S. Bankruptcy Court in July, attributing its woes to the collapse of
the Arizona housing market, consumers reducing their spending, the weakened economy
and an ongoing dispute with the United Commercial Foodworkers Union. The privatelyowned company, which claims it is not seeking a buyer and has no plans to shut down,
stated that business will proceed normally and that they expect to exit bankruptcy at the
end of first-quarter 2010, reported Phoenix Business Journal (July 13). The company closed
10 stores on July 21, 2009 but has no plans to eliminate any of its banners, which include
Food City, which caters to Hispanic shoppers,
and AJs Fine Foods, an upscale concept. All but MARKETSIDE ADAPTS TO CHANGING ECONOMY
two of Bashas stores are in Arizona, leaving
Wal-Mart Stores Inc. is not accelerating the test of
the company particularly vulnerable to local
its Marketside grocery stores in 2009 due to the
economy, reported Reuters (June 5). Were pleased
market conditions, reported The Associated
with
it, but at this point in time given the current
Press (July 13). Declining population growth
condition
in the marketplace, with a significant rehas meant that Bashas is increasingly susceptiduction in demand ... we are not accelerating that
ble to competition from national grocers such effort until we have better data to make a decision,
as Wal-Mart Stores Inc. and Frys Food Stores,
stated Wal-Mart vice chairman Eduardo CastroWright.
operated by Kroger Co.
The current population cannot fully support the
overabundance of stores in what has become
the most fiercely competitive grocery market in
the country, stated Bashas former president
Mike Proulx. Wal-Mart also is testing its smallformat store Marketside by Wal-Mart in the city.
Wal-Mart is now the market leader in the
Phoenix area, boasting about a 30% market
share, according to AZCentral.com (July 14).
13

Meanwhile, Wal-Mart Stores, Inc. quietly changed


the name and logo on its four Marketside grocery
stores to Marketside by Wal-Mart in 2009, according to East Valley Tribune (June 10). The logo,
which once appeared to be stacked fruits or vegetables, was replaced by the new Wal-Mart logo. The
company probably decided it was more advantageous to capitalize on its image as a low-cost
leader in the retail and grocery store industry,
claims David J. Livingston, a supermarket industry
consultant.

Wal-Mart had 0% grocery share in 1999. Bashas market share decreased from 18% to 16%
over the same period. Frys dropped from 34% to about 25%. Walmart opened four Marketside stores in the Phoenix, AZ area, presenting Marketside as a convenient, affordable grocer offering customers fresh food and prepared meals. For Walmart, Marketside represents
a departure from their department store model, though it offers the discounted prices that
have brought its parent retailer success with the trademarked deliciously affordable slogan. The stores are about 15,000-sq. ft., compared to the average 187,000-sq. ft. Wal-Mart
Supercenter. Marketside emphasizes its comparatively tiny retail space, classifying itself as
a small store packed with big values, according to a Marketside store manager.
Mr. Proulx noted that Bashas has no plans to expand nationally and instead will seek to attract shoppers who want to support a local Arizona business, according to The Associated
Press. However, although loyalty is still important to consumers, value is what is really driving the market and consumers will frequent the stores with the best deals, stated Burt
Flickinger, a retail analyst with Strategic Resource Group, reported AZCentral.com.
2008-2009 U.S. GROCERY STORE OPENINGS & CLOSINGS
There were 12,309 grocery stores in the U.S. as of April 2009, according to CoStar Group
(Apr. 28), and in 2009, 371 stores were expected to open, while 20 are projected to close.
In 2008, 437 stores opened and 242 closed while 2007 saw 339 opened and 288 closed.
The retailers who planned to open the most U.S. stores in 2009 included Walgreens (540),
Dollar General (450), CVS (275),
Household Penetration, 2002-2007
Dollar Tree (235), Family Dollar
(% HH Who Shopped the Channel At Least Once Per Year)
(200), Walmart Supercenter (125),
(Source: J.M. Degen & Co./ ACNielsen HomeScan)
Aldi (80) and Target (75). ConChannel
2007
2006
2005
2003
2002 5-Yr. Chg.
versely, the retailers who planned
Grocery Stores
100% 100%
99%
99%
99%
-1%
to close the most stores in 2009
Membership Clubs
52%
51%
50%
52%
51%
-1%
Supercenters
54%
54%
58%
61%
65%
11%
include Rite Aid (117) and WalDollar Stores
62%
66%
67%
65%
64%
2%
greens (65).
Mass Merchandise
Drug Stores
Convenience/Gas

93%
86%
46%

91%
85%
45%

87%
84%
43%

85%
82%
42%

82%
81%
41%

-11%
-5%
-5%

Altogether, Big-Box discounters


such as Target, Kmart, Meijer and
Walmart intended to open 200 stores in 2009, while 28 stores were expected to close.
Warehouse clubs Costco, BJs and Sams expected to open 48 stores in total for the year and
close about four. The drugstore channel expected to experience a total growth of 847
stores in 2009, but at the same time will close 216 locations.
Dollar stores and deep discount stores expected 945 new stores in 2009, while 110 existing
locations are set to shutter their doors. The number of announced store closing in 2008
spiked to the highest level since 2004. This clearly reflected the severity and rapidity of the
deterioration in the economy and its impact on the retail sector, according to the International Council of Shopping Centers (ICSC). However, the ICSCs data showed an improvement from 2008s high level of store closures. So far this year, 2,284 store closings were
announced for 2009, compared with 2,785 during the same time period in 2008.
CONSUMER REPORTS SURVEY RANKS TOP GROCERY CHAINS
Wegmans and Trader Joes were ranked among the most satisfying chains at which to shop,
according to a Consumer Reports survey of the best national and regional grocery chains.
14

The magazine queried


SUPERMARKET INDUSTRY OVERVIEW, 2008
32,599 people about their
(Source: Food Marketing Institute's Food Retailing Industry Speaks 2009)
experiences shopping for
Percent change in sales vs. 2007
3.5%
groceries at supermarNet income before taxes
2.0%
kets, supercenters and
Median Gross Margin
28.4%
Median Average Conventional Supermarket Store Size in
warehouse clubs; the rat27,500
ings incorporate informa- Square feet
Median Weekly Sales in Conventional Supermarkets
$333,535
tion from 48,831 store
Weekly sales per square foot of selling area
$11.79
visits. Other top-rated
Sales per Customer Transaction
$23.87
chains were Publix,
Sales per Labor Hour (Median)
$146.00
Average # of trips per week consumers make to the
Raleys, Harris Teeter,
2.0
supermarket
Fareway, Costco, Whole
Average # of items carried in supermarket (Median)
28,449
Foods Market, Market
Consumer
spending
on
groceries
in
an
average
week
$98.40
Basket, WinCo Foods and
Stater Bros. Overall, grocers earned higher marks than in Consumer Reports last supermarket survey in 2005 for
service, checkout speed, private label quality, baked goods and produce but no one chain
was ranked No. 1 in every category. Overall, respondents found Trader Joes, Costco, Market
Basket, WinCo, Aldi and Sav-a-Lot to offer lower prices than other chains. Wegmans and
Whole Foods were highlighted for their high-quality meat and produce. Wegmans, Trader
Joes and Raleys earned high service scores.
The largest percentage of survey respondents shop at Wal-Mart (14%). However, the chain
landed near the bottom of the magazines rankings due in part to low service and perishable scores. Target proved better than many chains but has only 200 locations with a
fullservice supermarket. Consumers complained most often about not enough open checkout lanes. Wal-Mart was the worst offender: Half of the respondents who shopped there
said that not enough lanes were open. Congested aisles and out-of stock advertised specials were also cited as problematic. Lower prices are proving paramount to shoppers; some
33% reported that they switched stores to save money. Consumer Reports cited several
growing supermarket trends, including more visible value brands, expanded bonus-card
programs, website specials, longer sales, discount drugs and more coupons.
KROGER FOCUSES ON HOUSE BRANDS, TRACKING SYSTEM TO GAIN SALES
With $12.5 billion annually in sales of private label products alone, Kroger is benefiting
from the economic downturn, according to The Los Angeles Times. The chain is staying
slightly ahead of its competitors, gaining 5% sales growth in the fiscal year ended Jan. 31,
2009, as compared to less than 1% for Safeway and a 1.2% decline for Supervalu. According
to industry analysts, Krogers success is probably tied to its efforts to attract bargain
hunters, aided by its exhaustive electronic tracking of customers shopping patterns and a
push into marketing house brands. In terms of house brands, the company uses advertising tactics most often seen used with brand names, such as members of Krogers loyalty
club receiving coupons and special offers for Kroger goods.
The aforementioned electronic tracking program refers to Krogers partnership with
Dunnhumby, which provides many insights to shopper trends by helping the company determine which promotions and sales will be the most successful based on collected consumer data. We send our very best customers coupon books specifically targeted at what
they actually buy, explained Kroger CEO David Dillon. The redemption rate of these
15

U.S. Retail Food Store


Operating Costs - 2008
(Source: Food Marketing Institute's Food Retailing Industry Speaks 2009)
As Percentage of Sales, 50th Percentile
(Median)

Cost of Goods Sold


Gross Margin
Total Payroll
Employee Benefits
Utilities
Property Rentals
Taxes and Licenses
Insurance
Depreciation and Amortization
Maintenance and Repairs
Supplies
All Other Operating Expenses/Credits
Total Expenses
Net Operating Profit (Loss)
Net Other Income (Expense)

All Companies
(Median %)
71.6%
28.4%
11.3%
3.2%
1.4%
1.8%
0.4%
0.2%
1.4%
0.8%
1.0%
3.8%
25.3%
1.6%
0.3%

coupons is significantly higher than


other coupons. At the same time, the
chain also uses consumer data to divide
its stores into three tiers, and stock
them accordingly. Krogers upscale
Ralphs stores have an expanded wine
selection; a mainstream store features a
broad spectrum of goods and prices,
while a value store will be much more
focused on price, according to Mr. Dillon. Dunnhumbys system also allows
Kroger to identity which items matter
most to customers when it comes to
price and prevents the company from
discounting products that would sell at
higher prices.
ECONOMIC SLOWDOWN NO DETERRENT FOR PUBLIX SUPERMARKETS

Employee-owned Publix Supermarkets,


with its 1,003 stores and 2008 revenue
1.8%
of $23.9 billion, does not seem to be
Total Net Company Sales
100.0%
losing steam in the face of the economic
slowdown. The company is putting longterm profitability aside by staying fully staffed and lowering prices in hopes of keeping existing customers and attracting new ones, according to the Wall Street Journal (Apr. 23).
Publix is always at its best when the economy is at its worst, stated Burt Flickinger, managing director for Strategic Resource Group, a supermarket industry consultant. Competitors
are now cutting back on contracting, and thats when Publix sees the most opportunities for
expansion.
Net Income Before Taxes and
Extraordinary Items

In terms of growth, Publix opened 79 stores in 2008. It also acquired 49 stores from Albertsons Inc. for $500 million. Kroger Co. opened 60 stores in 2008, while Whole Food Markets
opened 20 and Supervalu Inc. added 14 stores in 2008. In terms of annualized sales, Publix
had the second highest annualized sales per square foot, $548, second only to Whole
Foods $820, according to fourth-quarter 2008 sales calculated by Andrew Wolf, an analyst
with BB&T Capital Markets. Kroger, Supervalu and
PUBLIX TO OPEN HYBRID-ORGANIC STORE
Safeway Inc. all had sales figures at their supermarket-format stores between $460 and $490.
Publix Super Markets plans to open a hybridorganic supermarket in Naples, FL. Slated to
open in the second half of 2010, the concept
will be a combination of a GreenWise Market
store and a standard-format store, reported
Progressive Grocer (Aug. 30).

In response to rising commodity and transportation


costs, the company launched Publix Essentials, a
program that lowered prices for consumers by 20%
on staple items such as milk, bread and laundry detergent. The company also started programs to suggest meal plans that help customers stay
within their allotted grocery budgets. Publix is also avoiding cutting staff, which is resulting
in faster service times than other grocery stores in the bakery, deli and checkout sections.
Faster service is a key factor to consumer satisfaction. The company generally has eight to
10 employees working in the deli, where as other grocers usually have one or two. Accord16

ing to Todd Jones, president of Publix Supermarkets Inc., customer service is more important than ever as more companies enter the business of selling food.
SUPERVALU UNVEILS COST-CUTTING MEASURES
Minneapolis-based Supervalu Inc. closed 50 stores as part of its strategic cost-cutting moves
in 2008, stated chairman and CEO Jeff Noddle. Many of the stores slated for closure were
among those stores Supervalu acquired when Albertsons was sold in 2006, according to the
Idaho Statesman (Jan. 8). The company, with estimated annual sales of $45 billion in 2008
and approximately 2,500 retail grocery locations, is contending with mounting pressure
from discounters such as Wal-Mart and slower sales due to changing consumer buying patterns. Mr. Noddle identified impulse areas such as in-store coffee bars, flower shops and
meat counters experiencing changed buying habits during this challenging economic climate.
Sales were expected to remain steady into 2010, but price has become a key criteria when
customers are choosing a
Top Grocery Co-Ops
place to shop, explained Mr.
(Source: NCB Co-Op 100 Ranking)
Noddle. To boost sales, the
Revenue
Total Assets
CEO told analysts that SuperRanking
($ Millions)
Cooperative
valu will invest in more dis'08 '07
'08
'07
'08
'07
counts, promotions and target 4
4
$9,934
$8,852
$416
$411
TOPCO Associates LLC
marketing. Albertsons began
5
5
Wakefern Food Corp.
$8,397
$7,847
$1,223
$1,238
offering limited double
6
6
Associated Wholesale Grocers
$6,854
$5,731
$978
$957
coupons in its Boise newspa10
11 Unified Grocers Inc.
$4,105
$3,133
$903
$751
18
18 Associated Wholesalers, Inc.
$2,504
$2,460
$475
$474
per advertising inserts in
2008. Supervalu will also
focus on improving labor efficiency and loss prevention to cut costs. Supervalu announced
its fiscal 2010 capital spending plan of approximately $850 million compared to an expected $1.2 billion capital spend in fiscal 2009.
Store development plans for fiscal 2010 will focus on remodels including 85 to 95 major
store remodels, 40 to 45 minor store remodels, four traditional supermarkets, and approximately 50 to 60 limited stores, including licensed stores. The reduction from fiscal 2009 reflects fewer new traditional supermarkets and fewer major remodels as most of the higher
priority remodel projects have been completed, and reduced investment in technology
spending as system migration activities are completed in fiscal 2010.
TESCO TAKES NEW MARKETING APPROACH FOR FRESH & EASY
Tesco PLC is rethinking its marketing strategy for Fresh & Easy supermarkets in the U.S. as
the economic recession influences consumer purchases. While the British retailer initially
emphasized high-quality foods and Every Day Low Price promotions to distinguish itself in
the fiercely competitive U.S. grocery market, the chain is now focusing on 98-cent fruit and
vegetable packs and Everything under $1 displays. Tesco also launched its Buxted brand, a
budget meats line that includes Buxted Value Chicken Breasts at $2.99/lb, $2 less than the
Fresh & Easy brand but containing bone and rib meat. Additionally, president and chief executive of Tescos U.S. business Tim Mason is considering selling breads with preservatives
at a lower price than the breads now sold. The changes in Tescos marketing strategy come
after the company suspended new store openings for three months in 2008 and reduced
17

TESCO CEO: RETAILER RESPONSE NEEDED


Retailers need to respond to the recession
by changing with consumers, who are focusing more on value than other recent
shopping trends such as convenience, according to Tesco chief executive Terry
Leahy. It may demand short term pain such as investing in lower prices - but it delivers medium and long term gain, noted
the executive, reported Reuters (June 11).

growth expectations from the 200 stores it had


planned to this point, delaying that goal until November 2009.

The first store opened in November 2007. From a


business standpoint, they started out basically saying were going to invest hundreds of millions of
dollars and roll out across American starting in the
Southwest, stated Jim Hertel, managing partner at
Willard Bishop. One explanation for the slowdown,
according to Mr. Hertel, is that the company [falls] short in communicating information to
shoppers about its brands, pricing and quality, as well as some operational hiccups. One
such example is that most Americans are used to buying fresh produce without packaging,
which may imply freshness in the eyes of the consumer. Fresh & Easy offers produce wrapped
in cellophane, which may turn off some customers, explained Mr. Hertel. Another issue
would be stocking concerns, where stores would often run out of items people obviously do
want to buy.
When asked why Tesco slowed down its expansion across the U.S., company spokesman Brendan Wonnacott explained that the economy has had a bigger impact than anticipated. The
impact of the economy on these regions has been quite toughwe were opening stores at a
pretty fast pace, but given the economic climate, we thought it would be more prudent to
open at a slower pace, stated Mr. Wonnacott. The cost of the impact is quite evident in the
revenue and profit from this past year. While Tesco experienced a 13% gain in annual revenue
for the fiscal year 2008 ended Feb. 28, 2009, Fresh & Easy saw a higher-than-expected loss of
$206 million, up from $90 million the previous year.
... Membership clubs are facing the same economic problems as the supermarket category,
although they may be more susceptible. Membership clubs are realizing that the size of
their stores also plays a part in consumer expenditures.
MEMBERSHIP WAREHOUSE CLUBS
GAIN GROUND ON OTHER RETAIL
SEGMENTS
Alternative retail formats continue to
take away sales from supermarket
and other retailers shares of consumer expenditures for food, according to J.M. Degen & Company, Inc.s
Supermerchants 2008: Membership
Warehouse Club Industry Overview
report. Part of club merchandising
success is in its commercial packaging and the appearance of industrial
quality products at value pricing.
Membership-based clubs have set the
standard to limiting merchandise selection in a warehouse environment,
a concept followed by several alterna-

Total Membership Club Industry Sales, 2008


(Source: J.M. Degen & Co., Inc.)
At $80.7 billion, total
Food & Sundries sales
account for 59.7% of
industry sales, while NonFood and Services
combined make up the
remaining 40.3%.

Dry Grocery
9.9%
Perishables
20.4%

Non-Food &
Services
42.9%

Alcoholic
Beverages
1.9%

Sundries
18.4%

HBC
4.3%
Tobacco
1.0%
18

Candy/Snacks
4.0%

tive food formats, known collectively as


Supermerchants.

Worldwide Membership Club


Industry Forecast, 2009*
(Source: J.M. Degen & Co., Inc.)

Some in the industry believe that the


Sales
Avg. Sales/Unit
% Share
# of Units
sector has reached its peak, that satura- Company
($ MM)
(000s)
Costco
$75,750.0
54.7%
565
$134,070
tion of the market is fastly approaching
Sam's Club
$52,000.0
37.7%
745
$69,799
with little room for huge building forBJ's
$11,000.0
7.6%
185
$59,459
mats, a.k.a. Big Box Stores and addiTOTAL
$138,750.0
100.0%
1,495
$92,809
tional memberships cannot be developed
*Includes sales from all domestic and international units, licenses & joint ventures.
at faster rates. Despite the tough economic year, membership club industry comparable sales rose 5.9% in 2008, however, the
number experienced a downward trend toward the end of 2008.
Since 2006, 93 new club warehouses were added, with the global count reaching 1,458
clubs. Costco now has locations in 40 states, Puerto Rico and six countries. BJs expanded
from Maine to Florida and east to Ohio, while Sams Club entered the Canadian market with
six locations, but withdrew
Membership Club Industry Sales And Units Forecast,
in 2008. However, Sams
2008-2013
sales were up 3.9% in 2008,
(Source: J.M. Degen & Co., Inc.)
while the company moved
its new focus onto high-in1,685
1,640
1,595
1,550
come women consumers.
1,495
1,458
Costcos sales were up 6.6%
in 2008 versus 2007 as it
reached $74.2 billion in
sales. Costco exceeded
Sams in domestic sales due
to its larger average sales
per unit. The average Costco
garners $134.9 million in
$172.5
$164.3
$156.5
$149.1
$138.8
$135.3
sales and $143.2 million domestically. BJs sales grew
2008
2009
2010
2011
2012
2013
10.3% in 2008 with average
Club Units Retail Sales (Billions)
unit sales reaching nearly
$55 million for the first time.
All three operators adopted similar trends into their merchandising strategies. One such trend
is that of private labels. Costco was the first to introduce its own label, Kirkland Signature.
Member acceptance of the label led to a transferred brand confidence to other merchandise,
food and non-food alike. Currently there
Membership Club Industry
are 350-500 SKUs carrying the label, acDepartment Sales Estimates, 2008
counting for 20% of Costcos sales in
(Source: J.M. Degen & Co., Inc.)
2008. BJs was the last to offer a private
2008 Sales
% of Total % of Total Food
label, eventually introducing six differ($ MM) Industry Sales & Sundries Sales
FOOD & SUNDRIES
ent labels. At the end of 2008 BJs priPerishables
$27,495.7
20.4%
34.1%
Sundries
$24,777.0
18.4%
30.7%
vate label sales were 11% of food and
Dry Grocery
$13,370.1
9.9%
16.6%
merchandise sales as it cut the number
HBC
$5,606.0
4.1%
6.9%
Candy/Snacks
$5,563.2
4.1%
6.9%
of SKUs by 20%. All three operators are
$2,616.0
1.9%
3.2%
Alcoholic Beverages
pursuing a goal of about 20% of total
Tobacco
$1,252.0
0.9%
1.6%
$80,680.0
59.7%
100.0%
sales being derived from private brands. TOTAL FOOD & SUNDRIES
19

The second trend is the growth


of services as a percent of total
club sales. While food and sun(Source: J.M. Degen & Co., Inc.)
2008 2007
'08 Sales '07 Sales
dries remains the largest mer% Chg.
% Chg.
($ Billions) ($ Billions)
Region
Units Units
chandise segment of the
New England
69
69
0.0%
$5.2
$5.0
4.0%
industry, services are gaining
Mid Atlantic
149 147
1.4%
$12.2
$11.6
5.2%
East North Central
154 149
3.4%
$14.1
$13.4
5.2% in share while the relative im64
61
4.9%
$5.8
$5.4
7.4% portance of food and sundries
West North Central
South Atlantic
258 251
2.8%
$22.6
$21.4
5.6% recedes. Costcos food, sunEast South Central
51
48
6.3%
$4.5
$4.2
7.1% dries and fresh food sales deWest South Centra
114 116
-1.7%
$9.9
$9.8
1.0%
clined to 54% of total sales in
Mountain
115 102 12.7%
$12.6
$11.2 12.5%
Pacific
207 205
1.0%
$26.6
$25.8
3.1% 2008 and 2007 from 56% in
Total Domestic
1,181 1,148
2.9%
$113.5
$107.8
5.3% 2004. Most of the decline was
International*
277 266
4.1%
$21.8
$19.9
9.5% in sundries with non-food in
TOTAL
1,458 1,414
3.1%
$135.3
$127.7
6.0% particular taking a slide. Dur*Includes all international units, licenses and joint ventures.
ing the same time Costcos
auxiliary businesses increased from 11% to 17% on the strength of gasoline prices.

Membership Club Industry Sales


By Region, 2008

COSTCO: THE NEW DESTINATION FOR FOOD SHOPPERS


Costcos food business
Membership Club Industry
is an increasingly imporForecast, 2008-2012
tant part of the com(Source: J.M. Degen & Co., Inc.)
panys offerings, driving
2008
2009
2010
2011
2012
2013
1,458
1,495
1,550
1,595
1,640
1,685
consumer traffic despite Club Units
the struggling economy. Retail Sales
Food & Sundries ($ Billions)
$80.7
$83.3
$89.5
$93.3
$97.8
$101.8
Fresh food accounts for
Non-Food ($ Billions)
$34.8
$34.6
$36.8
$39.0
$40.5
$43.0
13% of the companys
Services ($ Billions)
$19.8
$20.5
$22.8
$24.2
$26.0
$27.7
Total Retail Sales ($ Billions)
$116.2
$127.7
$149.1
$156.5
$164.3
$172.5
top line, making it a seAvg. Sales Per Unit ($ Millions)
$92.8
$92.8
$96.2
$98.1
$100.2
$102.4
rious competitor to supermarkets, according
to vice president and chief financial officer Richard Galanti, reported Mass Market Retailers
(May 18). Fresh food generates same-store sales growth in the high single digits, with such
departments as bakery, deli and produce achieving low double-digit growth. These numbers
are a result of changing shopping
Membership Club Industry Sales, 1998-2008
patterns, according to Jeff Lyons,
(Source: J.M. Degen & Co.)
senior vice president of fresh
$140.0
$135.3
food. People used to come in
$127.8
once a month, and then once
every two weeks, whereas now
$120.0
$116.2
we have many members who
$107.5
shop with us as many as 55
$98.6
$100.0
times a year.
$88.8
$79.8

$80.0

$74.2
$66.7
$60.3

$60.0

$53.5

$40.0
1998

1999

2000

2001

2002

2003

2004

2005

2006

20

2007

2008

Costco achieves frequent consumer shopping trips despite


having only about 20% of the produce items and one-third the
meat items as a typical supermarket. The limited assortment al-

lows the companys buyers to stay


Membership Club Market Share, 2008
aware of shifting trends and prom(Source: J.M. Degen & Co.)
Domestic
Domestic Worldwide
Worldwide Avg. Sales
ising new items. The companys
Company
Sales
Share
Sales
Share
Per Unit
food buyers also make a point to
$ Billions
%
$ Billions
%
(000s)
visit manufacturing plants, as well Costco
$57.1
50.4%
$74.2
54.8%
$134,891
as Costco retail locations. Accord- Sam's Club
$46.5
41.0%
$51.3
37.9%
$70,404
$9.8
8.6%
$9.8
7.3%
$54,478
ing to Craig Jelinek, executive vice BJ's
Total
$113.5
100.0%
$135.5
100.0%
$92,764
president and chief operating officer for merchandising, buyers can quickly discover how shoppers respond to a particular
product by spending time on the sales floor.
Membership Club Volume: Breakdown Between ... Although fuel prices have gone down
from $4 per gallon in 2008, consumers are
Food And Non-Food Items
still concerned about shopping for the
(Source: J.M. Degen & Co.)
best deal. While membership clubs might
2008
2007
2006
Food/sundries
59.7%
58.7%
57.1%
deter some consumers due to membership
Non-Food
25.7%
28.2%
30.2%
fees, supercenters stand to gain from cusServices
14.6%
13.1%
12.7%
tomers looking to get everything at one
TOTAL
100.0%
100.0%
100.0%
store.
TARGET EXPANDS FOOD OFFERINGS
Target placed a greater emphasis on food in 2009, intending to further enhance our assortment of dry, dairy and frozen [food products], and add perishable items in new and remodeled general-merchandise stores, according to president and chief executive Gregg
Steinhafel. Target made significant investments in its perishable food-distribution capabilities, reflecting our growing commitment to food, noted the executive. The retailer planned
to design the majority of its new and remodeled stores in a way that draws attention to
fresh foods and other consumables. Target also invested in technology to improve different
areas of its operations and planned an aggressive drive to emphasize low prices. The moves
were necessary to improve sales, capture market share and increase profitability in this
challenging economic environment, stated Mr. Steinhafel. The companys game plan
evokes the one Walmart has followed for years, placing a greater emphasis on prices and
carrying more consumables.

U.S. Supercenter Industry Sales &


Market Share, 2007-2008
(Source: J.M Degen & Co., Inc.'s Supermerchants)

Company
Wal-Mart
Meijer
Super Target
Kroger*
Super Kmart
Biggs
Total

2008
(S Millions)
$205,300
$14,800
$10,100
$8,775
$2,100
$900
$241,975

Sales
2007
(S Millions)
$188,900
$13,900
$8,400
$7,980
$2,600
$860
$222,640

Percent Share
% Chg.
8.7%
6.5%
20.2%
10.0%
-19.2%
4.7%
8.7%

2008
2007
84.8%
84.8%
6.1%
6.2%
4.2%
3.8%
3.6%
3.6%
0.9%
1.2%
0.4%
0.4%
100.0% 100.0%

Number
of Units
2008
2007
2,612
2,447
185
183
239
210
170
163
46
54
6
6
3,258
3,063

Avg. Sales/Unit ($ Millions)


2008
$78.6
$80.0
$42.3
$51.6
$45.7
$150.0
$74.3

*Kroger operates supercenters under the Fred Meyer, Fry's Marketplace, Smith's Marketplace and Kroger Marketplace banners.

21

2007
$77.2
$75.9
$40.0
$48.9
$48.2
$143.3
$72.7

% Chg.
1.8%
5.4%
5.7%
5.5%
-5.2%
4.7%
2.2%

... While consumers are looking for savings with private labels and reduced prices, they are
still looking for quality and freshness in food products. Using seasonal items to emphasize
a companys root to its location is also a way to draw in consumers.
WALMARTS PROJECT IMPACT ENHANCEED FRESH, SEASONAL PILLARS

Supercenter Industry Est. Food & Sundries Sales, 2008


(Source: J.M. Degen & Company, Inc. Supermerchants)

$26,790

Dry Groceries

Paper/Household cleaning

$18,490

Meat/Poultry/Seafood

$17,960

$16,800

HBC

Dairy

$8,950

Produce

$8,000

Frozen foods

Bakery/Baked goods

$7,250

$4,575

Walmart worked on its


Project Impact, an initiative intended to enhance two new
marketing pillars:
fresh and seasonal.
The company intends
to use these offerings
to induce foot traffic
and profits, reported
Willard Bishops Competitive Edge (April).
Walmart aimed to accomplish four main objectives with the
Project Impact initiative:

- Improve the customer


experience.
Alcoholic beverages
$2,285
- Enhance their price
image advantage compared to competitors, an effect of price separation gained through supplier investments
combined with improved Great Value brand presence and quality.
- Develop market leadership
Supercenter Industry Product Share of
through their fresh and seasonal
Food & Sundries Sales, 2008
categories. The fresh category helps
(Source: J.M. Degen & Co., Inc.'s Supermerchants)
retailers differentiate their products
and seasonal aids in chain drug
merchandising.
Alcoholic beverages
Deli
Bakery/Baked goods
2.0%
2.7%
4.0%
- Strengthen the Walmart brand
promise to consumers, emphasizing
Dry Groceries
low prices and value.
Frozen foods
Deli

$3,050

23.5%

6.4%

Unintended consequences of the


transformation may occur, causing
effects throughout the supplier
community. One such consequence
is that some suppliers businesses
may find 30% or more of their sales
at risk, especially small suppliers
with most of their products in categories designated by Walmart as
growth areas. As category roles

Total Food & Sundries


Sales= $114.2 Billion

Produce
7.0%

Paper/Household
cleaning
16.2%

Dairy
7.8%

HBC
14.7%

22

Meat/Poultry/
Seafood
15.7%

change and the shopper value equation becomes more prominent, some
customer business teams may find
their significance reduced. Suppliers
concerned about their future at WalMart may lessen their investment,
while loss of business at Walmart may
free up production capacity that could
be used at marginal cost on behalf of
other retailers.

Supercenter Industry Food &


Non-Food 2008 Estimated Sales
(Source: J.M. Degen & Co., Inc.'s Supermerchants)

Concept

Food Sales

Non-Food Sales

Total

($ Millions)

($ Millions)

($ Millions)

$96,490

$108,810

$205,300

Meijer

$8,800

$6,000

$14,800

Super Target

$3,400

$6,700

$10,100

Kroger

$4,325

$4,450

$8,775

$735

$1,365

$2,100

Wal-Mart

Super Kmart

Bigg's
$400
$500
$900
The program will also have implicaTotal
$114,150
$127,825
$241,975
tions for other retailers. Traditional
supermarkets have long used the
fresh moniker to differentiate and seasonal offerings have driven 90% of profit growth in recent years. If Walmart succeeds in cultivating the pillars, while at the same time maintaining
price advantage, they will become even more of a formidable force for retailers to compete
with. Walmart identified 15 opportunity markets with low share and potential greater than
Russia and India combined. Retailers in those markets would benefit from developing a success strategy to win over shoppers now before Walmart comes into the picture.

WALMARTS SUPERMERCADO TEST COULD LEAD TO HUNDREDS OF STORES


Walmarts Hispanic-focused Supermercado concept test in Houston and Phoenix is a smart
business move that could eventually lead to hundreds of stores, according to Willard Bishop
chairman Bill Bishop. When you take a look at the growth in the grocery business today in
the U.S., it tilts very heavily in terms of minority and even more so in terms of Hispanic,
stated Mr. Bishop. Its where the
growth is, even though its niche. WalSupercenter Industry
mart has the potential to open hundreds
Forecast 2009 By Company
of the stores should it perfect the
(Source: J.M. Degen & Co., Inc.'s Supermerchants)
model, noted Mr. Bishop, reported
Sales % Share
Company
# of Units Avg. Sales Per
Unit ($ 000s) Reuters (July 8).
($ MM)
Wal-Mart
Meijer
Super Target
Kroger
Super Kmart
Biggs
Total

$230,400
$16,530
$11,100
$9,470
$1,520
$930
$269,950

85.3%
6.1%
4.1%
3.5%
0.6%
0.3%
100.0%

2,792
195
260
177
40
6
3,470

$85,215
$84,769
$42,692
$53,503
$38,000
$155,000
$77,795

However, the big question is how does


a Walmart create a more efficient supply
chain for products that are quite frankly
not going to have the same volume as
mainline Anglo products? asked Mr.
Bishop. The retailer claims that Supermercado, which features items including tripe and pigs feet, is an evolution of what weve
been doing, stated spokesperson Amy Wyatt-Moore. Ms. Wyatt-Moore claims the two stores
are the only ones planned and that they will help the retailer with its stores throughout the
U.S. that already cater to Hispanics.
... As supermarkets, supercenters and membership clubs attracted consumers with their
large variety of products at often lower prices in 2008, drug stores as a whole have experinced a decrease in sales. At the same time, more drug stores are increasing the amount of
consumables offered, hoping to capture sales from consumers seeing drug stores as a
healthy, one-stop option.
23

Supercenter Industry Unit Forecast, 2008-2013


(Source: J.M. Degen & Co., Inc.'s Supermerchants)

4,310
4,110
3,900
3,685
3,470
3,258

2008

2009

2010

2011

2012

2013

Supercenter Industry Unit Growth, 1999 - 2008


(Source: J.M. Degen & Company, Inc.'s Supermerchants)

3,258
3,063
2,837
2,520
2,181
1,918
1,777
1,573
1,301
1,093

1999

2000

2001

2002

2003

2004
24

2005

2006

2007

2008

ROLE OF DRUG STORES AS SHOPPING DESTINATION DECLINES: NIELSEN


Since 1999, the percent of U.S. households shopping in drug stores dropped from 89% to
81%, according to Nielsen. Six of the top 11 top-selling categories are outside the health
and beauty care category. Tobacco leads with almost $3 billion in sales, an increase of 18%
from last year, while cold/allergy remedies, nutritional supplements, headache remedies
and chocolate candy round out the top five. In terms of growth leaders, pet care products
posted a 67% increase from last year, followed by depilatories and peanut butter. Of the
eleven categories showing the strongest growth, eight are foods. Drug retailers are feeling
the heat from mass merchandisers and other retail channels. Look for drug stores to innovate and evolve with more in-store clinics, competitive store brands, and expansion beyond
traditional health & beauty categories, stated Tom Pirovano, Director of Industry Insights at
Nielsen. Other drug store facts:
- Canned nuts is the category that has the highest drug channel private label share (64%).
- Drug stores most often skew to African Americans, households without kids, lower incomes and older households than other channels.
- Those living in cosmopolitan centers and struggling urban cores spend more of their
money in drug stores than those in suburbia or rural communities.
Meanwhile, in order to attract budget-conscious consumers who are going to restaurants
less often, chain drug retailers are offering
TOP 20 DRUGSTORE CHAINS
convenient, competitively priced, diverse
assortments of food and beverages, reBY SALES - 2008
ported Chain Drug Review (Apr. 6). For the
(Source: Chain Drug Review State of the Industry 2009)
2008 Sales
growing number of consumers interested in
Company
# of Units
($ Millions)
eating healthy, the chains health care posi1 Walgreens
$59,030.0
6,678
tioning makes them a logical choice for nat6,981
2 CVS Caremark
$48,990.0 1
ural and organic products. Food and
3 Rite Aid
$26,290.0
4,901
beverage categories climbed sharply in the
1,149
4 Shoppers Drug Mart
$7,610.0 2
drug store channel in the past few years.
1,900
5 Katz Group
$6,380.0 3
Gains in the year ended Feb. 22, 2009
6 Health Mart
$4,900.0
2,002
ranged from 6.6% for bottled water to 20%
348
7 Jean Coutu
$2,710.0 2
for tortilla chips, according to Information
8 Medicine Shoppe Int'l
$2,400.0
1,350
9 Duane Reade
$1,770.0
252
Resources Inc.
$1,660.0

69

11 Unixprix

$1,380.0

387

12 Marc Glassman

$1,210.0

60

13 Pharmasave

$977.2

421

14 USA Drug

$971.1

15 Kinney Drugs

$711.0

16 Kerr Drug

$627.6

102

17 Discount Drug Mart

$526.0

68

18 Sav-Mor Franchising

$400.0

19 Bartell Drug

$386.0

20 drugstore.com

$366.6

10 London Drugs

The drug channel is revamping its nutritional profile, according to Jim Lacey, CEO
of Crunchies Food Co., maker of freeze
dried fruit and vegetable snacks. Drug
chains already have an array of chips and
nuts, but are lacking in the area of more
healthful snacks, states Mr. Lacey, who expects new products such as Strawberry Banana Crunchies to be included in the chain
drugs consumables category. Theres nothing really there thats a natural snack thats
really good for you, notes Mr. Lacey. Bartell
Drug is responding to growing demand for
natural and organic products by promoting

153
90

84
55

N/A

1 - Reflects retail sales only. The combined sales for CVS and its
Caremark PBM are $87.42 billion.
2 - Translated from Canadian to U.S. dollars at the rate of 0.807643.
3 - CDR est. Translated from Canadian to U.S. dollars at the rate of
0.807643.
4 - CDR est.

25

SELECT CONSUMABLES IN CHAIN DRUG STORES


(Source: Information Resources Inc.)

2008 Sales
(000s)

Bottled Water
Table Wine
Snack Nuts
Energy Drinks
Ready-to-Eat Cereal
Tortilla Chips

$430,251
$321,040
$309,716
$185,410
$172,821
$76,792

% Chg.
6.6%
7.5%
8.3%
15.0%
15.4%
20.0%

Unit Sales
(000s)

231,926
7,785
107,535
71,765
60,672
39,422

% Chg.
1.5%
4.3%
4.4%
9.2%
13.0%
10.3%

items in the category at least once


every quarter, according to Rebecca Siegmund, assistant vice
president of marketing. Strong
sellers at the chain include Bare
Naked drinks, Erins popcorn,
Annies homegrown foods and
Blue Diamond Almond Breeze milk
substitute.

At Pharmaca Integrative Pharmacy, natural/organic items are a leading category thanks to


double-digit growth, according to president and CEO Mark Panzer. Probiotic drinks are especially well-performing, with some of our beverages growing at over 20%, Mr. Panzer stated.
In an effort to better fit into the Chain Drug channel, Kellogg Co. launched a test in April
2009 in the Detroit market of a space-saving box in its cereal category, which offers the
same amount of cereal as traditional boxes, but with less packaging. The compact packaging allows for more efficient use of retailer space and enables retailers to offer a wider variety of products, stated Kellogg morning foods marketing director Kim Miller.
... Convenience stores, as well as drug stores to some extent, stand to gain from consumers
looking for more healthful, easy food on the go. Some convenience chains have the added
benefit of gas stations, taking advantage of the fact that as gas prices come down, consumers are more apt to spend inside the store.
MANY CONVENIENCE CATEGORIES FACE DECLINE, ENERGY DRINKS TO GROW
Convenience stores are facing stiff competition from supermarkets as well as mass-merchandisers, according to Convenience Store News, but that does not necessarily mean that
all categories faced negative growth in 2009 (Jan. 26). Overall, the situation is not positive
The total number of convenience stores in the industry declined by almost 700 stores
since the beginning of 2008. Due to this, many of the categories will be facing declines; a
few will experience minimal growth (less than 1%) while some might still have modest
growth, specifically in the packaged beverages and food sector.
- Confectionery 2008 was not a good year for this staple convenience store category, but it

Top Convenience Store Chains


(Source: Store Magazine's Top 100 Retailers)
Rank
22
23
25
34
42
45
47
77
83
99

Company
7-Eleven*
Pilot Travel Centers*
Alimentation Couche-Tard**
Valero Energy
The Pantry Inc.
QuikTrip*
Racetrac Petroleum
Casey's General Stores
Sheetz*
Wawa*

* Estimate

Headquarters
Dallas, TX
Knoxville, TN
Laval, Quebec
San Antonio, TX
Sanford, NC
Tulsa, OK
Atlanta, GA
Ankeny, IA
Altoona, PA
Wawa, PA

**Projection
26

2008 Revenue
($ Millions)
$16,681.0
$16,500.0
$15,583.0
$10,528.0
$8,995.6
$8,640.3
$8,000.0
$4,687.9
$4,106.7
$3,395.7

% Y/Y
Chg.
14.9%
32.0%
1.4%
18.5%
30.2%
4.1%
27.0%
-2.9%
5.3%
2.9%

No. of
Stores
6,320
342
5,480
1,384
1,653
518
525
1,499
352
570

% Y/Y
Chg.
1.7%
5.9%
7.1%
-2.1%
0.5%
6.4%
0.8%
2.1%
2.3%
0.9%

is predicted to have a better one in


2009. Sales are projected to rise by
3.5% per store, and unit volume is expected to drop, but drop less than 2008
levels. Meanwhile, chocolate may see a
5.8% increase in sales, but a 1.0% drop
in unit volume as people still see the
item as an affordable comfort. Nonchocolate seems to be one of the few
bright spots, forecast to have a 0.7% increase in unit volume.

Top 10 C-Store Franchise Chains In 2008


(Source: Convenience Store News Top 100)

Company
7-Eleven
Shell
BP North American
Exxon Mobile
ChevronTexaco
CITGO
ConocoPhillips
Sunoco, Inc.
Speedway
Valero Energy

Franchise/
Licensee

U.S.
Stores

%
Franchised

4,629
4,619
4,067
3,667
3,623
2,005
1,372
1,287
1,265
576

6,271
4,673
4,863
4,466
4,011
2,005
1,475
1,797
2,829
1,536

73.8%
98.8%
83.6%
82.1%
90.3%
100.0%
93.0%
71.6%
44.7%
37.5%

- Malt Beverages Consumers also see


this category as affordable indulgence
during the economic downturn, which may be a good indicator for the future. The segment
is forecast to have an increase in both volume and dollar sales, suggesting that there will
be heavy promotional activity and discounting. This is one category where it is apparent
that consumers are trading down from premium to less expensive brands. At the same
time, customers are also upgrading to larger sizes of both premium and budget beer.
- Packaged Beverages Although this sector is usually a positive area, it took a hit in 2008
that was expected to continue through 2009. While in 2007, packaged beverages saw a
9.3% increase in dollar sales and 3% rise in volume, 2008 saw a decline of 1.3% for volume
and a meager 2.4% increase in dollar sales.
One possible reason for this decline is that people are switching from convenience stores
to club and mass stores, claims Mike Zielinski of Royal Buying Group. With the exception
of energy drinks, carbonated beverages as a whole have been on the decline, as well as bottled water due to consumer environmental concerns. Surprisingly, sports drinks is the section losing the most ground to enhanced waters, as opposed to bottled water.
- Salty Snacks Modest but steady growth was the name of the game for this area in 2009,
and a large gap between projected dollar sales and volume sales suggests [that] price increases will be present this year. Grain bars were the talk of the 2009 Forecast Council due
to the fact that they are experiencing a resurgence after the low-carbohydrate craze of a few
years ago.
- Energy Drinks - With a projected 5.9% rise in dollar sales in 2009, energy drinks are leading the rest and is still expected to experience robust growth for the future, according to
Convenience Store News. In another article from the same volume, Convenience Store News
delves in depth into the so-called energy shot category, where 20 new products were introduced in 2008 as compared to nine in 2007. A cost-effective, immediately consumable impulse item, energy shot sales are projected to grow 30, 40, even 50% annually for the next
few years, claims Rick Reddick, national category manager of packaged beverages and beer
at ConocoPhillips Co.
While usually placed at registers in prime impulse buying sections, Mr. Reddick is also considering placing some in the freezer section to attract the energy drinker. Energy drinkers
and energy shot takers are not necessarily one in the same, according to the article, as the
shot category is still relatively new. According to Gerry Kermouch, editor of Beverage Busi27

ness Insights, the two types of buyers could be same, but at different times in the day. it
could be the same user at different consumption occasions, who dont want to drink a lot of
liquid, but want to get the jolt without drinking 16, 20 or even 32-oz.
- Foodservice Foodservice, with a focus on fresh-prepared foods, was anticipated to continue its growth since 2004 in 2009. This sector offers convenience stores opportunities to
take advantage of the general trend of consumers eating at home more, as, according to
Matt Paduano of Nice N Easy, people may be eating at home more, but that doesnt necessarily mean theyre cooking more.
FOODSERVICE SALES UP AT C-STORES
Dealing with the overwrought economy has led convenience store retailers to focus on value,
price, freshness and safety at Convenience Store News 2009 Foodservice Roundtable held in
March 2009, reported Convenience Store News. There is incredible pressure to lower prices,
stated Gary Wildman, category
manager for Petro-Canadas Neigh2008 Top 25 Convenience Store Chains
bors division. About 61% of c-store
(Source: Convenience Store News Top 100)
companies stated their 2008 foodAnnual ACV*
Company
($000)
U.S. Stores service sales increased over the
BP North American
$15,769.5
4,863 year before, according to a C-store
7-Eleven
$13,113.9
6,271 Foodservice Pulse study. The study
Shell
$9,864.9
4,673 also found that 51% of respondents saw their foodservice cateExxon Mobile
$9,714.6
4,466
gory outperform all other in-store
ChevronTexaco
$9,150.7
4,011
categories in sales growth in 2008,
Speedway
$8,744.8
2,829
and 49% stated foodservice sales
Alimentation Couche-Tard
$8,697.5
3,083
for the first half of 2009 are proValero Energy
$7,638.0
1,536
jected to beat 2008s by a mean
The Pantry Inc.
$6,847.6
1,664 average of 4.9%. Approximately
Sunoco, Inc.
$5,019.5
1,797 26% reported consumers purchasQuikTrip
$4,423.6
499 ing more take-home consumption,
CITGO
$4,015.9
2,005 representing a prospective unexCasey's General Stores
$4,007.1
1,454 ploited opportunity for retailers.
Wawa
ConocoPhillips
Amerada Hess
Kroger
Racetrac Petroleum
Cumberland Farms
Military
Holiday Cos.
Kum & Go
Delek US Holdings
Susser Holdings
CHS/Cenex

$3,908.3
$3,330.1
$3,246.4
$2,823.1
$2,636.7
$2,563.9
$2,371.9
$1,630.7
$1,407.9
$1,322.3
$847.6
$689.0

580
1,475
708
799
517
572
405
427
438
499
500
389

* ACV Figures are annualized ranges of the estimated retail sales


volume of all items sold in a store that pass through the cash
registers. Gas Sales are included. Lottery tickets are not included.
28

C-stores stand to profit from consumers trading down if they focus


foodservice offerings on perceived
value rather than discounting,
stated Dean Dirks, of Dirks & Associates LLC. Mr. Dirks offers advice
for making the most of the tradedown trend: Experimenting with
QSR market products; focused attention on fringe markets of
breakfast, snacks and late night;
offering home-meal replacement
options; creating and marketing
low-calorie items and taking advantage of the job market by up-

grading to better employees and


increasing check averages by encouraging employees to up-sell.
This can be achieved by setting
attainable goals for associates,
through contests, bonuses and
posted results.

Top 10 Company-Operated Chains In 2008


(Source: Convenience Store News Top 100)

Company
Alimentation Couche-Tard
The Pantry
7-Eleven
Marathon Oil
Casey's General Stores
Valero Energy
ExxonMobile
Kroger
BP
Amerada Hess

CompanyOperated Stores

U.S.
Stores

%
Franchised

2,645
1,664
1,642
1,564
1,467
960
799
799
796
654

3,083
1,664
6,271
2,829
1,467
1,536
4,466
799
4,863
708

85.8%
100.0%
26.2%
55.3%
100.0%
62.5%
17.9%
100.0%
16.4%
92.4%

Balancing fresh and safety is a


fine balance that takes practice.
Panelists stated that made-toorder foodservice programs convey both freshness and safety.
However, it is time consuming
and laborious. Another option is to use a commissary where foods are prepared, packaged
and delivered to stores. If a commissary is not feasible, the creation of a portfolio of products supplied through a wholesaler is another option. If you want to get into foodservice and
be successful, you need to clearly understand that you must make a strategic, long-term,
company financial and cultural commitment, stated Brian Matlock, director of foodservice
for Tedeschi Food Shops, whose stores include full-service fresh deli counters. C-store operators who try to get into foodservice without the proper vision, knowledge and support infrastructure hurt us all.
NEW PRODUCTS MORE IMPORTANT THAN PROFITS FOR C-STORES
Overall convenience store industry profits rose 54% in 2008 to $5.2 billion, reversing a twoyear decline of a 42% profit drop, according to The National Association of Convenience
Stores. Industry sales rose 8.1% to reach $624.1 billion, as in-store sales rose 3.2% to
$173.9 billion. The growth of in-store sales defied the overall downturn trend in U.S. retail
sales. The improvement also came in spite of a decline in convenience stores, a 1% drop to
144,875. Foodservice, which includes dispensed
Success Rate of New Products
beverages and in store prepared food, ac(Source: Convenience Store News )
counted for 13.9% of in-store sales and 23.9% of
Health & Beauty Care
54.5% gross margin dollars. Packaged beverages acCandy/Gum
46.2%
counted for 14.1% of in-store sales and 16.6% of
Tobacco
41.2%
gross margin dollars.
Salty Snacks
Beer/Malt Beverages
Packaged Beverages

40.9%
35.7%
34.5%

Approximately 82% of convenience store retailers cited gross profit dollars as their top criteria
Percent of products reviewed by retailers that are still being
when judging the success of new products in
sold after six months
their store, according to Convenience Store
News New Product Scorecard research. (Mar. 9). About 78% named sales volume, last years
No. 1 criteria. Two-thirds of retailers added more new items to stores in 2008 than in 2007,
approximately 43 compared with 34 the year before. Only 13% reduced their number of new
products. Increased convenience, healthier eating, energy/functionality and value were the
four largest inspirations for new product launches in 2008. On average, new products have
three months to prove their worth. About 89.7% of retailers give products three months to
succeed before integrating them into their standard set.
The second most successful category of new products was candy and gum (46%), followed by
29

salty snacks (41%). For the second year in a row price was named the best method of promoting
new products, followed by signage, shippers and in and out displays. The packaged beverage
category featured the largest number (2,416) of UPC-coded products in 2008. New products in
the candy category made up the largest percentage (19%) of total SKUs followed by salty snacks.
There was a drop-off in beer and alternative snacks at 14.8 % and 18.3% respectively.
CONVENIENCE STORES SHOULD UTILIZE CANDY SALES TO BOOST PROFITS
In order to tap into the recessionary boost in candy sales, convenience store operators need to
make some adjustments, according to a study conducted by the American Wholesale Marketers
Association entitled Candy in the Convenience Channel, reported Convenience Store News (May
11). Dollar sales in the channels overall candy segment were up 3.9% to nearly $4.4 billion,
but unit volume declined 4.3% for the period ending Dec. 27, 2008, according to The Nielsen
Co. The trend was seen throughout most of the subcategories, like chocolate bars/packs, gum
and pegged and bagged candy. Kit Dietz of Dietz Consulting outlined three key strategies for
c-store retailers; the first is to go with a core concentration. There is a $410.1 million incremental growth opportunity if c-stores and distributors could increase distribution and in-stock
position of the best-selling 50 SKUs in the category. More focus is needed on the products that
are proven to drive business and less on excess products.
The second is speeding up the process of bringing new products to the market, which could
increase sales as much as $1 billion and at least catch up to the drug channel. Were completely missing it because we havent extended our reach fast enough. The drug channel is
top of the line currently, they are the first to have new items and theyre tying them into
manufacturers promotions. If we could just match the speed and distribution levels of the
drug channel it would be a significant opportunity. Theres just about 320 new SKUs a year,
but we have to learn how to manage them properly, stated Mr. Dietz. The third strategy is
to mark down failed products at the retail level rather than returning them to distributors
for credit.
CONVENIENCE WHOLESALERS SHOW STEADY GAINS
The top 25 convenience wholesalers combined to reach sales of $52.4 billion in 2008, according to a study by Convenience Store News. The industry as a whole achieved an increase
of 6%, which matched 2007s percentage increase. McLane Grocery Distribution remained
the top-ranked convenience wholesaler with sales totaling $28 billion. McLane brought in
more than half of the total sales of the top 25. Rankings of companies as the top of the list
remained intact from 2007 with Core-Mark Holding Co., Eby-Brown Co., H.T. Hackney Co.,
and GSC Enterprises Inc., rounding out the list of the top five wholesalers. Imperial/Harrison
Super Regional moved up seven spots to the No. 10 due to the acquisition of Harrison Co.
(2007s No. 23) by Imperial Trading Co. Inc. (ranked 17th in 2007). Harbour Wholesale Grocery and Richmond-Master Dist. Co. are newcomers ranked 21 and 25, respectively. Meanwhile, operational issues were on the top of everyones mind who participated in the survey.
When the wholesalers were asked to name the biggest challenge facing their business in
2008, rising fuel costs and the corresponding effects on all aspects of their business was
cited most often.
... Where consumer reluctance to spend has hurt other food provider formats, dollars stores
have thrived in the tough economic climate. The dollar store formats attracts consumers that
may have come from convenience stores looking for more bargains and more food item variety.
30

America's Top 25 Convenience Wholesalers


(Source: Convenience Store News)

RANKED BY SALES
08' 07' COMPANY
1
1 McLane Co.
2
2 Core-Mark Holding Co. Inc.
3
3 Eby-Brown Co.
4
4 H.T. Hackney Co.
5
5 GSC Enterprises Inc.
6
6 S. Abraham & Sons Inc.
7
7 Amcon Distributing Co.
8
8 Harold Levinson Associates Inc.
9
9 Chambers & Owen Inc.
10 17 Imperial/Harrison Super Regional
11 10 Garber Bros. Inc.
12 11 J.T. Davenport & Sons Inc.
13 12 Consumer Product Dist. Inc.
14 13 Liberty USA Inc.
15 16 Stephenson Wholesale Co. Inc.
16 14 Farner-Bocken Co.
17 15 Pine State Trading Co.
18 18 Atlantic Dominion Dist.
19 19 Cooper-Booth Wholesale Co.
20 20 Tripifoods Inc.
21 n/a Harbor Wholesale Grocery Inc.
22 22 Southco Distributing Co.
23 21 Auburn Merchandise Dist. Inc.
24 23 Thomas & Howard Co. Inc.
25 n/a Richmond-Master Dist. Inc.

EST. SALES ($ millions)


LATEST FY
PRV. FY
28,000
25600*
5,561
5,314
4,400
4,400
3,600
3,600
1,200
1,200
908
900
816
816
766
744
680
665
649
589
635
635
612
612
565
550
480
480
424
369
410
410
390
388
374
342
333
325
292
286
270
243
265
254
260***
271
250
245
223
184

% Chg.
9.4%
4.6%
0.0%
0%**
0.0%
0.9%
0%**
3.0%
2.3%
10.2%
0.0%
0.0%
2.7%
0.0%
14.9%
0.0%
0.5%**
9.4%
2.5%
2.1%
11.1%
4.3%
-4.1%
2%**
21.2%

LOCATIONS
SERVED
35,899
24,000
13,500
25,000
8,000
3,776
5,000
15,000
n/a
1,900
3,000
1,800
4,250
2,000
2,114
12,000
3,320
2,100
1,500
2,410
2,500
1,210
3,000
1,562
1,200

DELIVERIES
PER WEEK
53,404
28,800
15,000
n/a
6,500
3,604
5,800
10,000
n/a
2,100
2,100
1,894
4,000
1,600
2,752
7,500
4,600
1,600
1,400
1,865
1,900
1,290
1,800
2,300
810

* - restated. ** - Convenience Store News estimate. *** - Unaudited edit

DOLLAR STORES BECOME MORE POPULAR AMONG


HIGH AND MIDDLE INCOME FAMILIES
Dollar stores have become increasing more popular amid the recent economic recession.
Consumers at all income levels are shopping more at dollar stores, with high income shoppers spending 18% more at dollar stores in the second half of 2008 compared to 2007, according to The Nielsen Company. Dollar stores are now outpacing major consumer
packaged goods channels between both low and high-income shoppers.
Dollars store offer products at a variety of price ranges, with an average of only 23% of
products at or below the on dollar price point. Still, an estimated 65 million U.S. consumers
shopped at dollar stores in 2008. Troubled economy and rising costs in healthcare, education and food have caused everyone,
even those with high incomes, to reDollar Stores - Present and Forecast
think where they purchase basic houseMarket Share
hold goods, stated Jeff Gregori, VP,
(Source: Willard Bishop's The Future of Food Retailing)
Retail Services, The Nielsen Company.
Dollar Share of Grocery &
Annual Sales*
Five years ago, shoppers werent sure
# of Stores
Consumables Market
(millions)
Year
what they would find in a dollar store.
2008
21,544
1.8%
$16,911.0
Today, dollar stores are delivering
2013
25,069
1.8%
$20,713.0
more consistent selection and value.
*Grocery and consumables only
31

At the same time,


low-income shop11% pers are still the
(Source: The Nielsen Company)
primary customers at dollar
10%
9%
stores., Approxi8%
9%
mately 45% of dol7%
lar store sales are
6%
7%
still from house5%
5%
holds with low an5%
nual incomes
(below $30k), 47%
3%
3%
4%
3%
from middle in2%
2%
comes (between
1%
1%
$30k and
1%
$99.9k), and only
8% from high in-1%
-2%
comes (greater
than $100k). The
Dollar Stores
Total Mass
Grocery Stores
Club Stores
Drug Stores
-3%
most loyal cusHigh-Income
Mid-Income
Low-Income
tomers tend to be
those from small
towns and who live in rural areas of urban centers, while seniors and younger families with
children are also more likely to shop in dollar stores.

Dollar Stores Growth By Income Dollar % Chg. Vs. Year Ago

FAMILY DOLLAR DOING WELL DESPITE RECESSION


Many customers are trading down, allowing small-box discounters like Family Dollar, Dollar
General and Dollar Tree to garner higher profits, reported CNN Money (Apr. 15). Family Dollar operates 6,600 stores nationwide and reported a 6.4% increase in second quarter 2009
sales at stores open more than one year.
Starting as a closeout shop 50 years ago, Family Dollar today carries many name brands at
20% to 40% cheaper prices than those found at traditional supermarkets. Prices are roughly
on par with big-box discounters like Walmart and Target and at smaller-sized locations that
offer convenience. The secret to the companys success is selling a greater amount of second and third-tier brands, which have cheaper prices and greater margins than top-tier
brands. Inexpensive real estate in low-priced locations is another way the company keeps
costs down.
With the addition of cooler items like milk, eggs, frozen pizza and other food, executive vice
president Dorlisa Fleur helped to boost sales and the frequency of shopping trips in 2008.
The company also updated stores by trimming inventory by 10%, remodeling and creating a
more coherent layout. Additional technology was added that allowed the chain to accept
food stamps and other payment methods. All the changes are coming at an opportune
time, stated Craig Johnson, president of Customer Grow Partners, a consulting firm. With
the economy in a ditch, Family Dollar is in a sweet spot.
Some analysts fear that the chains profits could suffer from its lower-margin food items.
Due to opportunistic buying, product inventory lacks consistency, creating a negative reac32

tion from some customers. Another concern is what will happen to the trading down niche
when the recession ends and consumer habits return to normal. History has shown we do
well in good times and bad, stated CEO Leon Levine. As extra security, Family Dollar introduced 250 new food items to its inventory in early 2009, including Triscuits and Double Stuf
Oreos.
WILLARD BISHOP OFFERS LOOK INTO THE FUTURE OF FOOD RETAILING
Value and low prices dominate consumers priorities in choosing where to shop and what to
buy while brand loyalty and the allure of specialty foods are waning in their influence, according to The Future of Food Retailing 2009 webinar put together by The Food Institute
and food retail consultant Willard Bishop. Most significantly, the webinar explored the diminishing role of retailers in the traditional grocery/supermarket stores and the emerging
non-traditional grocery channel. AlCHARACTERISTICS OF STORE FORMATS IN 2008
though traditional grocers and re(Source: Willard Bishop's Future of Food Retailing Report)
tailers reported a dollar sales
Total Store
Avg. Total
Avg. Weekly
% of Total
Area
SKUs
Store Sales
Store Sales
increase of 4.3% to $463.6 billion
$221,345
100%
in 2008, Willard Bishop attributes
Total Traditional Grocery
the increase entirely to food price
Traditional Supermarkets
52,100
45,500
$289,631
100%
inflation. Within the format, tradiFresh Format
32,400
30,000
$185,991
100%
tional supermarkets posted sales
Limited-Assortment
15,000
1,400
$133,799
100%
Super Warehouse
growth of 3.6%, while sales at fresh
43,100
36,000
$595,467
100%
Other (Small Grocery)
9,000
3,000
$24,880
100%
format stores rose a substantial
Total C-Stores
$17,970
81%
6.6%, albeit a decline from 2007s
Convenience
2,600
4,200
$19,538
81%
(with gas)*
8.7%, likely the result of spending
Convenience
cuts and budgeting on the part of
3,700
5,000
$14,302
81%
(w/o gas)
consumers.
Total Non-Traditional
Grocery
Wholesale Club

$132,035

130,500

5,100

$1,180,329

59%
Although market share for limitedSupercenter
184,100
100,000
$903,311
60%
assortment stores and super wareDollar
7,400
5,400
$15,095
66%
Drug
house retailers was very small
12,300
25,000
$46,229
34%
Mass
66,400
95,000
$228,639
23%
compared with traditional superMilitary
29,400
15,000
$643,610
100%
markets, sales growth for those two *Does not include gasoline sales
categories outpaced every other
channel in any format. Limited-Assortment stores, such as Aldi and Trader Joes, exhibited a
14.3% sales increase in 2008, though total sales reached $22.3 billion, or 4.8% of total supermarket sales. Limited-assortment stores perform well because they are able to offer significantly lower prices than supermarkets on own-label products, which are also exclusive to
those retailers, Willard Bishop explained. Super warehouse stores performed second-best
across all categories with a 12.4% sales increase in 2008, supported largely by thrifty consumers looking for value and low prices. Despite the small market share that limited-assortment stores and super warehouses hold, Willard Bishop expects increased store growth
across the U.S. for both categories, and identifies them as formats to watch for going in the
future.

Non-traditional grocers gained a 1.4% market share in 2008, carving out a piece of the market as consumers seek better values and one-stop shopping solutions. Channel sales for
non-traditional growers rose 10.1% to $350.4 billion, while the supercenter format outpaced
the total non-traditional grocer category with a sales increase of 11.9% to $152.2 billion.
Wholesale clubs also exceeded the non-traditional composite sales increase with an 11% rise
33

MARKET SHARE FOR GROCERY & CONSUMABLES BY


STORE FORMAT
(Source: Willard Bishop's Future of Food Retailing Report)

Dollar Share

Total Traditional Grocery


Traditional Supermarkets
Fresh Format
Limited-Assortment
Super Warehouse
Other
(Small Grocery)

Annual Sales
(In Billions)

Number of Stores

2013

2008

2013

2008

2013

2008

43.5%

48.3%

$489.3

$46.6

40,371

40,275

35.2%
1.0%
3.5%
2.6%

42.1%
0.8%
2.3%
1.9%

$396.8
$11.8
$39.5
$29.3

$403.7
$7.9
$22.3
$18.2

26,346
885
4,450
575

26,802
825
3,204
588

1.1%

1.2%

$11.9

$11.5

8,116

8,858

15.6%

15.2%

$175.4

$145.7

162,625

155,950

Convenience
(with gas)*

13.5%

13.0%

$151.8

$124.6

132,577

122,637

Convenience
(w/o gas)

2.1%

2.2%

$23.6

$21.1

30,248

28,416

Total C-Stores

in 2008 to a total $79.5 billion. Market


share for wholesale clubs grew to 8.3%
of the total retail food industry, while
same store sales at BJs, Costco and
Sams Club climbed 5% to 6% in 2008.
The ability for supercenters and wholesale clubs to sell fresh food, grocery
and pharmacy products, who together
account for over two-thirds of the dollar
share for the entire non-traditional grocer segment, allowed the category to
outperform all other formats in 2008.

Looking ahead, Willard Bishop expects


the traditional grocery channel to further decline, falling to a 43.5% market
share by 2013. Non-traditional grocery
will increase its market share by a simiTOTAL ALL FORMAT
lar amount, reaching 41% during the
*Does not include gasoline sales
same period and eventually surpassing
traditional grocery by 2014. Limited-assortment stores and super warehouse stores are expected to grow within the traditional category, maintaining strong momentum with an 8% to
10% annual growth rate for five years while traditional supermarkets grow at a weak 0.3%
and lose almost seven market share points by 2013. In fact, traditional supermarkets are
expected to show a growth rate a little over 10% of the inflation rate for the same period.
Supercenters will bring up the non-traditional grocery segment with a growth rate of almost
10% and increase their market share by 5.7% into 2013, reaching 21.6%. Dollar and drug
stores will also contribute with annual growth rates of 5.4% and 4.5%, respectively, but it is
not expected to significantly change market share.
Total Non-Traditional
Grocery
Wholesale Club
Supercenter
Dollar
Drug
Mass
Military

41.0%

36.4%

$461.2

$350.4

58,930

51,039

8.5%
21.6%
1.8%
5.6%
2.9%
0.6%
100.0%

8.3%
15.9%
1.8%
5.3%
4.7%
0.6%
100.0%

$95.2
$243.2
$20.7
$63.4
$32.4
$6.4
$1,125.9

$79.5
$152.2
$16.9
$50.5
$44.6
$5.7
$958.9

1,473
5,114
25,069
23,477
3,619
177
262,126

1,295
3,240
21,544
21,003
3,754
172
247,178

Aside from future growth rate and market share projections for 2013, Willard Bishop offered
many insights into what will allow non-traditional grocery and other rising segments to
flourish in the next five years. Looking into the future, Willard Bishop expects food-price inflation to increase; the recession that began in late 2007 and appears likely to continue into
2010 changed the retail landscape irrevocably, but inflation is a force that was merely delayed, not temporarily reversed. As a result, the most successful companies today will carry
strategies into the future that will push them ahead of their competition. Some of those
strategies include the rationalization of SKUs, the de-listing if line extensions and name
brands, and emphasis on value and efficiency.
Walmart was used as a specific example of a retailer adopting a strategy that not only provides success now, but also positions the company to build long-term market share. The
discount department stores Win/Play/Show strategy is expected to create a major ripple
effect for both retailers and suppliers. Following this strategy, Walmart will coordinate its inventory based on these product categories; products that Walmart can out-price its competitors with are considered win items, inventory that Walmart can sell, but cannot beat its
rivals are in play, while general items that the retailer stocks in specialized categories,
such as hardware, are considered show categories, existing only to prevent the customer
from shopping elsewhere if they are only looking for the most basic products, like a hammer or tape measure.
34

This system deterAnticipated Compound Annual Sales Growth


mines how Walmart stocks its
Rate vs. Inflation: 2008-2013
Source: Willard Bishop
entire store, and
Walmart uses the
Win/Play/Show inLimited-Assortment
10.5%
ventory system to
Supercenter
9.8%
control the items it
Super Warehouse
8.7%
receives from supDollar
5.4%
pliers. While WalDrug
4.5%
mart can use its
Fresh Format
3.9%
influence as the
Wholesale Club
3.6%
largest food reConvenience (w/gas)
3.5%
tailer to control
the products it re- Food Inflation Compound Annual Rate
2.9%
ceives, other groConvenience (w/out gas)
1.9%
ceries and food
Military
1.7%
retailers need to
Other (Small) Grocery
0.8%
evaluate how their
Traditional Supermarkets
0.3%
shelves are
stocked and which
items provide the best profit margins and which are sold to satisfy customer needs without
leaving the store to maximize efficiency during lean times. The strategies that keep companies competitive today will continue to pay dividends tomorrow, Willard Bishop advises.
Another very important factor in todays retail world is the growth of private-label products.
Willard Bishop attributes much of limited-assortment retailers success to its own-label offerings, which are unique to every retailer and are often less expensive than national brands in
traditional supermarkets. And as consumers cut their shopping budgets, private labels
goods are more attractive as an alternative to national brands, particularly in the centerstore segment of most supermarkets. According to the Private Label Manufacturers Association, 77% of shoppers believe that store brands are as good or better than national brands.
In some categories, such as dairy, private label goods account for 39.6% of total sales and
19.7% of total SKUs. An indication of the increased prevalence of private label goods is WalMart, which has achieved success promoting national brands at prices lower than competitors, putting effort into improving the quality and marketing for their Great Value private
label line.

35

WILLARD BISHOP FORMAT DEFINITIONS


TRADITIONAL GROCERY*
*The Conventional Supermarket, Superstore and Food/Drug Combo formats were combined into on Traditional Supermarket format.
Traditional Supermarket Stores offering a full line of groceries, meat and produce with at least $2 million in
annual sales and up to 15% of their sales in GM/HBC. These stores typically carry anywhere from 15,000 to
60,000 SKUs (depending on the size) and may offer a service deli, a service bakery, and/or a pharmacy.
Fresh Format Different from tradtional supermarkets, vitamin shops and traditional natural food stores, fresh
stores emphasize perishables and offer center-store assortments that differ from those of traditional retailers
especially in the areas of ethnic, natural and organic, e.g. Whole Foods, some regional chains such as
OMalias and some independents.
Limited-Assortment Store A low-priced grocery store that offers a limited assortment of center-store and perishable items (fewer than 2,000), e.g. Aldi, Trader Joes and Sav-A-Lot.
Super Warehouse A high-volume hybrid of a large traditional supermarket and a warehouse store. Super
Warehouse stores typically offer a full range of service departments, quality perishables and reduced prices,
e.g. Cub Foods, Shoppers Food & Pharmacy and Smart & Final.
Other (Small Grocery) A small corner grocery store that carries a limited selection of staples and other convenience goods. These stores generate less than $2 million in business annually.
CONVENIENCE STORES
Convenience Store (w/gas) A small, higher-margin store that offers an edited selection of staple groceries,
non-foods, and other convenience food items, i.e., ready-to-heat and ready-to-eat foods. The convenience
store with gas format includes only convenience stores that sell gasoline e.g., ExxonMobil, BP, etc.
Convenience Store (w/o gas) Small, higher-margin convenience stores that dont sell gas and offer an edited
selection of staple groceries, non-foods, and other convenience food items, i.e., ready-to-heat and ready-to-eat
foods. Stores such as 7-Eleven and White Hen without gasoline pumps are included.
NON-TRADITIONAL GROCERY
Wholesale Club A membership retail/wholesale hybrid with a varied selection and limited variety of products
presented in a warehouse-type environment. These 120,000-sq. ft. stores have 60% to 70% GM/HBC and a grocery line dedicated to large sizes and bulk sales. Memberships include both business accounts and consumer
groups, e.g., Sams Club, Costco, and BJs.
Supercenters A hybrid of a large traditional supermarket and a mass merchandiser. Supercenters offer a wide
variety of food, as well as non-food merchandise. These stores average more than 170,000-sq. ft. and typically
devote as much as 40% of the space to grocery items, e.g., Wal-Mart Supercenters, Super Kmart, Super Target,
and Meijer.
Dollar Stores A small store format that traditionally sold staples and knickknacks, but now sales of food and
consumable items at aggressive price points account for at least 20%, and up to 66%, of their volume, e.g. Dollar General, Dollar Tree, and Family Dollar.
Drug A prescription-based drug store that generates 20% or more of its total sales from consumables, general merchandise, and seasonal items. This channel includes major chain drug stores such as Walgreens and
CVS, but does not include stores/chains, e.g. The Medicine Shoppe which sell prescriptions almost exclusively.
Mass A large store selling primarily hardlines, clothing, electronics and sporting goods, but also carrying
grocery and non-edible grocery items. This channel includes traditional Wal-Mart, Kmart, Target stores, etc.
Military A format that looks like a conventional grocery store carrying groceries and consumables, but is restricted to use by enlisted or retired military personnel. Civilians may not shop at these stores, which are referred as commissaries.
36

FOOD PROCESSING

... As consumers reduce their number of shopping trips and the amount spent at each of
them, consumer packaged goods (CPG) manufacturers need to keep their brands relevent in
the eyes of budget-conscious consumers. No longer is the CPG section immune to the economic downturn. Keeping in line with consumer trends, diversifying food item portofolios
without cannibalizing established brands and maintaining company flexibility is fundamental to growing in a difficult market.
A LOOK AT U.S. FOOD MANUFACTURERS
Between 2002 and 2007, the number of food
WHAT IS FOOD MANUFACTURING?
manufacturing establishments in the U.S.
dropped a sharp 21% to 22,055 facilities, accord- Industries in the Food Manufacturing subsector
transform livestock and agricultural products
ing to data from the Bureau of Census. That is a
into products for intermediate or final consumpdecline of 5,844 establishments in five years.
tion. The industry groups are distinguished by
Part of that decline is likely the result of signifithe raw materials (generally of animal or vegcant consolidation among food manufacturers as etable origin) processed into food products.
The Food Institute recorded some 622 acquisitions by food manufacturers in that same five year period, many merging operations that resulted in the closure of food manufacturing establishments as cost cutting synergies.
During the five year period, sales, shipments, receipts, and revenue in the food manufacturing sector rose 29% to $589.6 billion. In 2007, these food manufacturing sales accounted
for 11.0% of all manufacturing sales in the U.S. down from 11.7% five years earlier.
Inflation during the five years took a toll however, as costs for food manufacturing rose 31%
according to the Bureau of Labor Statics (BLS) two percentage points greater than the 29%

2007 U.S. Food Manufacturing


(Source: Census Bureau's 2007 Economic Survey)

Food Manufacturing
Beverage and Tobacco
Product Manufacturing
Total Manufacturing
Food as a % of Total

# of Establishments
2007
2002
% Chg.
22,055 27,899 -20.9%
3,236

Sales, Shipments, Receipts, Revenues


and Business Done (000s)
2007
2002
% Chg.
$589,549,777
$458,205,779
28.7%

3,027

6.9%

$127,919,988

$105,456,615

21.3%

293,919 350,728
7.5%
8.0%

-16.2%

$5,339,345,058
11.0%

$3,914,719,163
11.7%

36.4%

rise in sales noted above. Meanwhile, the consumer finished consumer foods wholesale
price index from BLS rose just 19%, indicating that manufacturers absorbed at least some
of those costs or eliminated them through streamlining processes and taking costs out of
the supply chain.
CENSUS BUREAUS 2006 ANNUAL SURVEY OF MANUFACTURING
In 2006, the most recent data available, the total value of the U.S. food manufacturing sector rose 0.9% to $536.94 billion, according to the Census Bureaus 2006 Annual Survey of
Manufacturing. At the same time, the total cost of the materials rose 1.9% from 2005 to
total at $304.16 billion. In the beverage manufacturing sector, the total value rose 1.3% to
37

2006 U.S. Food Manufacturing


Source: Census Bureau's 2006 Annual Survey of Manufacturing

Food Manufacturing
Animal slaughtering and processing
Poultry Processing
Dairy
Fruit & Vegetable Preserving & Specialty Food
Fruit & Vegetable Canning/Pickling/Drying
Frozen Food
Grain & Oilseed Milling
Breakfast Cereal
Bakeries and Tortilla
Bread and Bakery
Cookies, Crackers and Pasta
Tortilla
Sugar and Confectionary
Non Chocolate Confectionary
Chocolate & Confectionary from Cacao Beans
Seafood Processing
Other Food Mfr.
Snack Food
Seasonings and Dressing
Flavoring Syrup and Concentrate
Coffee & Tea
All Other Food
Beverage Manufacturing
Soft Drink/Ice
Breweries
Wineries
Distilleries

Employees
(Thousands) % Chg.
1,416
-1.7%
488
-0.8%
227
-2.2%
121
-5.5%
160
-3.6%
76
-5.0%
84
-1.2%
52
0.0%
14
7.7%
273
-0.7%
216
-0.5%
43
-2.3%
13
8.3%
65
-4.4%
17
-10.5%
7
-12.5%
36
-5.3%
174
0.6%
44
-6.4%
30
0.0%
5
0.0%
11
10.0%
82
3.8%
124
0.8%
69
-1.4%
25
4.2%
23
-4.2%
5
0.0%

Value added
(Millions) % Chg.
$233,406
-0.5%
$52,793
-2.0%
$25,825
-5.9%
$24,142
-4.9%
$27,731
2.2%
$15,523
1.0%
$12,208
3.7%
$19,974
-4.9%
$6,613
-12.3%
$34,417
-1.7%
$22,628
-1.5%
$10,438
-2.8%
$1,350
5.3%
$15,747
0.4%
$3,901
-10.0%
$2,009
3.5%
$4,320
9.8%
$39,808
3.0%
$13,960
3.4%
$6,374
2.2%
$6,644
6.5%
$3,388
0.3%
$9,440
1.4%
$42,905
-2.2%
$18,421
-10.9%
$13,770
2.6%
$7,083
9.4%
$3,630
9.0%

Cost of Materials
(Millions) % Chg.
$304,156
1.9%
$96,862
0.5%
$20,329
-2.0%
$51,205
-1.1%
$28,395
2.9%
$16,300
4.1%
$12,094
1.4%
$37,328
2.1%
$2,813
8.4%
$19,814
5.4%
$12,154
6.3%
$6,785
3.6%
$875
7.5%
$12,631
-0.6%
$2,325
-5.5%
$2,344
-0.1%
$6,525
5.3%
$31,876
9.6%
$8,748
11.7%
$6,671
2.2%
$1,373
-1.6%
$3,640
26.6%
$11,442
9.4%
$39,666
4.4%
$24,983
4.3%
$7,817
5.8%
$4,851
9.5%
$2,013
-8.2%

Total Value
(Millions) % Chg.
$536,939
0.9%
$149,576
-0.2%
$46,163
-3.6%
$75,251
-2.2%
$56,160
2.4%
$31,839
2.2%
$24,321
2.6%
$56,978
-1.0%
$9,426
-6.9%
$54,244
1.1%
$34,778
1.5%
$17,248
-0.2%
$2,216
5.8%
$28,225
-0.9%
$6,232
-8.2%
$4,342
2.2%
$10,841
6.9%
$71,672
5.8%
$22,779
6.8%
$13,023
2.1%
$8,041
4.8%
$6,993
11.8%
$20,834
5.7%
$82,443
1.3%
$43,437
-2.7%
$21,574
3.8%
$11,680
11.8%
$5,750
4.4%

$82.44 billion while the cost of materials rose 4.4% from 2005 levels.
The Other Food Manufacturing sub-sector, which includes snack foods, seasonings and
dressing, flavoring syrups and coffee and tea, saw the highest overall growth in 2006 with a
5.8% increase to $71.67 billion. This was led by a 11.8% increase in the coffee and tea division, which also saw 26.6% growth in the total cost of materials. While the dairy subsector
saw a 1.1% decline in the total cost of materials, the total value also declined to $75.25 billion, a decrease of 2.2% from 2005 levels.
TOP 100 CPG COMPANIES BEATING THE RECESSION
With 2008 experiencing some of the highest increases in commodity costs recorded, the top
100 companies in Food Processings 2008 list were the ones who effectively addressed their
internal cost structure as well as managing their overall supply costs. Lean manufacturing
principles were also seen in more than half of the companies surveyed, as businesses tried
to increase production per employee and sales per employee. Nestle, the No. 1 company on
the list, attributed its success to its employees and its relentless focus on the consumer,
claimed chairman and CEO of Nestle USA & Canada, Brad Alford. We are focused on anticipating and responding to consumers needs, including make more nutritional choices. The
company is doing something right, as sales increased 14% versus 2007 and jumped up from
the No. 4 spot last year.
Only one of the 27 largest companies on the list reported a decrease in sales and 16 re38

Top 25 Food Processing Companies 2008


(Source: Food Processing's Top 100)

Company Name

2008 Food Sales


($ Millions)

2007 Food Sales


($ Millions)
$23,300
$25,246
r
$21,186

1
2

Nestle (U.S. & Canada)


Tyson Foods Inc. (9/27/08)*

$26,477
$26,325

PepsiCo Inc.

$25,346

4
5
6
7
8
9

Kraft Foods
Anheuser-Busch Cos. Inc.
Dean Foods Co.
General Mills (5/31/09)*
Smithfield Foods Inc. (5/3/09)*
Kellogg Co.

10

Coca-Cola Co.

11

ConAgra Foods (5/31/09)*

12

Pilgrim's Pride Corp. (9/27/08)*

13

JBS USA (Formerly Swift)

14
15

Dole Food Co. Inc.


Mars Inc.**

$23,956
$15,571
$12,455
$12,100
$10,726
$8,457

$22,876

% Chg.

2008 Total Co.


Sales ($ millions)

13.6%
4.3%

$102,962
$26,862

19.6%

$43,251

4.8%
10.0%
5.4%
9.1%
10.0%
8.6%

$42,201
$39,158
$12,455
$14,691
$12,488
$12,822

$8,205

$14,159
$11,821
$11,093
$9,749
$7,786
r
$7,761

5.7%

$31,944

$8,031

$7,435

8.0%

$12,731

$8,025
e
$8,000

$7,110
$7,616e

12.9%

$8,525

5.0%

$13,284

11.7%
0.0%

$7,620
e
$22,000

$7,620
e
$7,000

$6,821

$7,000

16

Sara Lee Corp. (6/28/08)*

$6,828

$6,550

4.2%

$13,212

17

Hormel Foods Corp.

$6,755

$6,007

12.5%

$6,755

18

Unilever North America

$6,647

$6,958

-4.5%

$56,408

19

Saputo Inc. (3/31/09)*

$5,793

44.8%

$5,793

20

Dr. Pepper Snapple Group

$4,000
$5,695r

0.3%

$5,710

0.0%

$120,439

6.6%
0.6%
4.3%
5.7%

$7,998
$5,243
$5,133
$83,503

21
22
23
24
25

Cargill Inc. (5/31/09)*


Campbell Soup Co. (8/3/08)*
Maple Leaf Foods
Hershey Co.
Procter & Gamble

$5,710
e
$5,500
$5,448
$5,243
$5,026
$4,852

$5,500

$5,113

$5,210
$4,819
$4,589

*fiscal year, if different than calender year


** Does not include Wrigley sales.
e

= estimate

= figure restated from last year

ported increases in net income. At the same time, five companies record net losses for
2007, the most in six years. One such company was Pilgrims Pride (remaining at No. 12),
which filed for Chapter 11 in 2008. According to President/CEO Clint Rivers, the company
faced high feed-ingredient costs, an oversupply of chicken, weak market pricing and softening demand. Smithfield Foods (No. 8) felt some of the same pressure, as well as the
H1N1 flu virus, causing its first annual loss in more than 30 years.
Other companies faced losses in 2008, including Dr Pepper Snapple (which was still getting
started), Sara Lee (was still reorganizing) and Maple Leaf Foods (affected by a food recall).
... With consumers becoming more aware of how their food is being produced, becoming a
green company may be worth the extra cost. Although the economy has slowed, it has been
seen that consumers are still willing to spend more for an environmentally-friendly product.
39

CPG MARKETING FOR SUSTAINABLE PRODUCTS


The popularity of sustainable, eco-friendly, organic and Fair Trade certified products has
risen since 2004 as more consumers consider the environmental impacts of products, reported Information Resources, Inc.s (IRI) Times and Trends report, Sustainability: CPG Marketing in a Green World (February). In order to gauge the trend more accurately, IRI teamed
up with research firm TNS to augment the levels of consumer greenness. The TNS Shades
of Green Segmentation classifies consumers into eight categories ranging from Ecocentrics, those willing to pay more for eco-friendly products, to Ecovillians, who have dismissed the need entirely and do not seek out eco-friendly products at all.
Despite rising prices and unfavorable economic conditions, the green segment is attracting
new consumer segments, which in turn have become key drivers in industry growth. Since
2008, Eco-centrics have held steady in regards to spending, while Respectful Stewards
and Proud Traditionalists, the next two levels on the green spectrum, increased spending
15.5% and 8.4% respectively. Unit sale performance for the three categories decreased 6.6%,
rose 3.9% and rose 0.9%, respectively. Ways to attract new customers and to keep them include broadening merchandising considerations through cross-merchandising and crossmarketing programs that focus on new and innovative products.
Green spending is linked to consumers values. Manufacturers and retailers need to understand these value systems across the key consumer segments and aligning product assortment and merchandising programs accordingly. Organic and fair trade products in
particular are seeing increases in sales. A re-assessment of product development priorities,
as well as local market assortments, needs to be done in regards to shifting consumer attitudes. CPG food marketers need to conduct frequent consumer assessments in order to
proactively address the changing attitudes. Private label green offerings have gained a
strong reputation in the CPG arena; an increase in products flaunting earth-friendly and natural/organic attributes is expected. Retailers need to identify the most important categories
for their key consumer segments; solutions-based merchandising with a clear value proposition is strongly recommended.
ENVIRONMENTAL INITIATIVES PAY OFF FOR FOOD PROCESSORS,
BUT COME AT A HIGH COST
The growing number of consumers factoring environmental considerations into their purchases incited many in the food industry to adjust their methods, catering to shoppers who
respond positively to corporations with sustainable practices. This general consumer segment, and in particular the LOHAS (Lifestyles Of Health And Sustainability) consumer group,
represent an opportunity for food manufacturers to court food shoppers that reward green
companies with loyalty. Though getting on the good side of the LOHAS segment is very beneficial, with a $209 billion market for goods and services belonging to this consumer group,
committing to the sustainability practices necessary to attract these consumers might cost
more for small-businesses than it is worth.
LOHAS consumers are a growing segment among Americans, who now represent 70 million,
or about one in four people in the U.S., according to social researcher Dr. Paul Ray. Jeff
Hilton of the Integrated Marketing Group believes that they are the wave of the future, and
will have an even larger impact on Fair Trade and socially responsible investing as their
numbers increase. Mr. Hilton also classifies LOHAS consumers as driven primarily by their
40

values, and are


Department Level Dollar & Unit Sales,
willing to pay
% Change Versus Year Ago
more if they ap(Source: IRI)
prove of the prod-0.6%
uct or the
Fresh/ Perishable
manufacturers
6.3%
environmental
record. But the
-0.7%
Frozen
groups values
3.8%
are not entirely
Unit Sales
based in sustainDollar Sales
able agricultural
-2.2%
Center Store
practices or the
3.3%
processors
green-ness, as
animal cruelty, is-2.1%
Total CPG
sues of womens
3.0%
rights and socially
responsible busi-3.0%
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
ness are also on
the minds of many in the LOHAS segment. The Integrated Marketing Group also identifies
five core consumer behaviors for this category: They buy with their hearts as well as their
heads, they seek out information, they are avid networkers, they will pay more for a product
they can feel good about buying, and they tend to view the world through a larger world
perspective.
To appeal to LOHAS consumers, Specialty Food Magazine offers advice, stating that food
processors first need to recognize that they are not typical consumers, and traditional marketing methods will only alienate them (November/December). Instead, food companies
need to appeal to their specific values, making a connection with consumers and distinguishing themselves by making a social difference. The LOHAS group is very eager to learn
about the product and the brand; processors should respond to their inquisitiveness by providing information about the company, its history, and any unique facts that separate one
particular brand from the others on supermarket shelves. Cultivating a relationship with
customers is also very important, as LOHAS consumers want to feel connected with the
companies whose products they are buying, and that relationship can be encouraged with
community support, web resources and supplementary information. Aside from the financial
benefits of catering to the LOHAS segment, their networking abilities can also be utilized by
food processors, as word-of-mouth advertising among the consumer group could reach more
shoppers that traditional channels of marketing might not have been able to.
The LOHAS consumer group certainly represents a compelling and potentially very lucrative
segment, but the efforts needed to earn the loyalty of LOHAS consumers might not be worth
the market share that this group represents. Even if those in the segment are willing to pay
more for goods produced by companies they approve of, small business owners might not
be able to afford newer appliances and renovations to go green, among other initiatives.
This leaves the larger food processors better positioned to enjoy the patronage of the LOHAS
segment, even though those businesses might release a greater proportion of waste into the
environment under Californias proposed emissions cap trading system.
41

... Changing company practices is one way to help distinguish a company in the mind of the
consumer, but the main factor still comes down to price. While keeping pricing high as competitors charge less is a sure way to distance some customers, lowering a price may also relate to consumers that the quality has lowered as well, so prudence is needed.
FOOD PROCESSORS BALANCE PRICES, CONSUMER QUALITY PERCEPTIONS
Reeling from an established economic recession and declining consumer spending, leading
global retailers are engaging in an already-developed worldwide pattern of cost cuts and
price wars, according to Prof. Joshua Bamfield, director of the Center for Retail Research.
The universal shift towards price deflation will likely continue into the next decade, and consequently retailers will likely target reduced-cost food and drink groups rather than more
environmentally focused processors, according to Prof. Bamfield, reported to Beverage Daily
(Dec. 11, 2008).
While price wars will inevitably change the retail landscape for years, beverage and food
manufacturers will feel the most pressure from deflationary price cuts as retailers turn to
suppliers of discounted brands. Food processors will be pushed to supply better quality
products at lower retail prices, enabling middle-range retailers to compete with discounters.
Presenting the retail price wars of Germany as a model, Prof. Bamfield predicts that food
suppliers in Western Europe and the U.S. will exTop 10 Growth Categories Unit
perience the financial effects of deflation more
Sales, % Change 2008 vs 2007
severely than the retailers responsible for it, and
(Source: IRI)
the repurcussions will last for years. Diminished
% Chg. Avg. Price profit margins are not the only concern for food
Category
Yr. Ago
Chg. processors; an Institute for Operations Research
Sports Drinks
7.4%
0.0%
and the Management Sciences study finds that
Vitamins
5.8%
0.9%
brand equity is adversely effected by frequent
Fresh Fz Poultry
4.7%
3.9%
Wine
4.3%
1.8% price cuts, even for well-respected brands. ReFz Plain Vegetables
4.1%
3.8% curring price promotions influence the perceived
Breakfast Meats
3.1%
-1.0% average price of a brand, exponentially increasProcessed Fz Poultry
3.1%
1.6% ing and reducing perceived quality as well.
Dinner Sausage
Beer/Ale/Alcoholic Cider
Dry Packaged Dinners
Total CPG

3.0%
2.9%
2.7%
-2.1%

2.8%
2.1%
3.9%
4.9%

In a simulated model, authors of the study calculated that approximately 25% of sale increases
generated by temporary price cuts lead to cannibalization of future sales resulting from the dilution of brand equity. Identifying the brand
quality signaling mechanisms, those involved in the study claim that price is the single
most important determinant of perceived quality, followed by advertising frequency to a
lesser extent. Using Nielsen scanner data for ketchup brands, the authors of the study
demonstrate the effect of pricing on consumer perception of food quality. Heinz, a dominant brand in this segment, is generally seen as being a high-quality product, is higher
priced and has significantly higher advertising expenditures than its competitors. If Heinz
were to cut prices permanently by 10%, it would increase sales by 26%. Implementing the
same price cuts without reducing perceived quality, sales increase estimates reach 32%. For
high-end product categories, the results are even more defined. Exactly how suppliers can
cut costs while maintaining brand equity is harder to determine than the factors influencing perception, particularly if price is indeed the most significant indicator of quality.
BUDGET-STRAPPED CONSUMERS TO RE-DEFINE CPG MARKET
42

In 2008, consumer packaged goods (CPG) unit sales fell 2.1% while price increases fed a 3%
increase in CPG dollars sales, according to Information Resources Inc.s (IRI) Times & Trends
Report 2008 CPG Year in Review. Due to the continuing economic downturn, consumers
are not only stretching the use of CPG products, but are also cutting them out altogether if
the product is deemed expendable. According to the report, the strongest growth came
from the frozen foods department as more consumers subLargest Price Increases,
stitute eating out for dinners at home. Fresh/perishable CPG
All Outlets 2008 vs. 2007
items lead the way in terms of dollar sales at grocery, drug
(Source: IRI)
stores and mass merchandisers, increasing 6.3%, while unit
sales fell 0.6%. Once again, price increases were found to be
Pasta
21.1%
the reason for the dollar sales increase.
Margarine/Spread
18.5%
Mayonnaise
Rfg. Fresh Eggs
Natural Cheese
Shortening & Oil
Total CPG

16.4%
13.0%
12.8%
11.9%
4.9%

With the CPG industry dollar and unit sales average standing at
-2.1%, five of the 10 top categories saw declines that outpaced
that. The carbonated beverage sector and the chocolate sector saw the largest unit sales decline, 4.5% and 4.3%, respectively, as they were seen as generally discretionary purchases.
At the same time, essential CPG items such as milk and bread also saw unit sale declines. Natural cheese saw a 13.6% increase in dollar sales in 2008 but also had a 12.8% average price
change from year-earlier levels. Sports drinks, fresh frozen poultry, wine and frozen plain vegetables were among the top five growth CPG categories while only the breakfast meats category saw an overall price change decline versus a year ago. Overall, CPG prices were up 9%
versus prior year on a national level, as 46 of the top 100 CPG categories saw above-average
price increases.
It was predicted that CPG prices will remain high through the first half of 2009, with unprocessed foods to see the beginnings of a possible price deINGREDIENT COSTS GOING DOWN cline. Pastas, margarines and mayonnaise were some of the
top CPG food items that saw the largest price increases, with
Ingredient costs for manufacturers
21.1%, 18.5% and 16.4%, respectively.
including Heinz, Kraft and Hormel
are down about 28% on average as of
Sept. 1, 2009 from the same time in
2008. Falling prices for gasoline and
transportation plus consumer resistance to price increases have helped
drive manufacturer prices down, reported The Associated Press (Sept. 8)

For 2009, CPG manufacturers and food retailers alike must


be in tune with consumer needs and desires. IRI predicts
that retailers who manufacture their own private label
products will enjoy a competitive advantage as it may help
reduce input and overall production costs. Functional
foods, including neutraceuticals, were popular, as well as
new uses for already established ingredients, such as lycopene, soy and various vitamins. Better-for-you foods, which emphasize not what is in the
product but what is left out, are predicted to be popular, as consumers are intently focused
on leveraging nutrition as a preventative medicine. And while they are often more expensive than conventional products, organic/natural and sustainable products will see an increase in share in 2009 and will continue to thrive.
... Comfort foods, in the form of snack foods, are experiencing a resurgance as worried consumers look for an affordable indulgence. While some companies attribute increased sales
to lowered prices, some snack food manufacturers claim that increased creativity with new
items is drawing consumers in.
43

SNACK FOODS REMAIN POPULAR INDULGENCE DURING RECESSION


The snack food industry is performing well in the midst of a recession that is sparing few
businesses, according to executives interviewed by Cypress Research Associates and the
Snack Food Association. Customers are eating more at home and choosing more comfort
foods, leading six of nine industry executives surveyed to predict continued growth
throughout 2009. Although shoppers are mostly brand loyal, they are searching for value by
shopping multiple channels, trading down to private label snacks or cutting discretionary
snacks altogether. Private label goods also continue to gain ground on national brands, particularly in the pretzel, snack nut and beef jerky categories. In the 52 weeks ending Feb. 22,
2009, private label goods held about 36.4% of total dollar sales in the snack nuts segment,
while in the potato chip category, dollar sales grew approximately 29.1% to bring ownbrands to a total 6.3% of potato chip dollar sales. Only Frito-Lay and Procter & Gamble sold
more potato chips in that period than private label manufacturers.
For major label brands, all nine executives believe that new product development is particularly important for attracting sales for premium products. The research and development
programs for new product introductions took vastly different approaches, however, with
some companies preferring taste panels, others seeking consumer feedback and many following culinary developments to take advantage of emerging trends elsewhere in the industry. The culinary world is a great place for flavor experimentation, according to Chris
Hood, general manager of snacks at Procter & Gamble. ConAgra Foods monitors new food
products as they arrive on store shelves, especially in high-end supermarkets, as well as in
restaurants and the foodservice industry when seeking new flavors. Others, such as Rudolph
Foods, are trying new methods of introducing flavors including packaging the seasoning
with the product and allowing customers to season the food themselves.

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44

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Po

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Opportunities still remain in product innovation as well as in healthy snacks, such as reduced-fat items. Most of the executives stated that the primary product focus for healthy
snacks was not fat-free items, but was rather reduced calorie, trans-fat-free and reduced
sodium snacks. When definDollar Sales of Snack Foods By Category
ing healthy, we think the
(Source: Snack World - Total U.S. - 2 Weeks Endied Feb. 22, 2009)
most important element is
calories per serving and por3,969.3
In $ Millions
(5.2)
tion sizes, stated Tom Howe,
(% Chg.)
president of Baptistas.
3,168.2
(10.3)
Healthy, a claim used to describe trends in the snack food
2,272
industry, often does not ap(8.7)
1,792.3
pear on packaging or in mar(2.3)
keting. Better for you,
wholesome and eat smart
656.9
654.7
601.2
are preferred marketing
(6.6)
(9.0) 427.8 310.1
(6.4)
(5.3) (-3.8)
claims, but also risk sending
the wrong message. Procter &
Gamble does use better for
you claims in their advertising, but finds that placing too
much of an emphasis on such
marketing actually lowers

taste expectations and repeat purchasing, stated Mr. Hood. By category, the most popular
snack food were crackers, with about $3.97 billion in total sales in the year ended Feb. 22,
2009. Along with many categories, however, a 5.2% increase in dollar sales was balanced by
a 2.5% decrease in unit sales, reflecting the impact of price increases on dollar metrics and
the reality of lower sales as evidenced by unit sales declines. Although the Keebler Company
possessed the No. 1 spot with Sunshine Cheez-It crackers, Kraft Foods followed with three
Nabisco brands, though each experienced a unit sales decline for the latest 52 weeks ended
Feb. 22, 2009. The top 10 cracker brands were dominated nearly entirely by Keebler and
Kraft, with only Pepperidge Farms Goldfish and private label products holding two spots.
Salty snacks accounted for $8.7 billion in total sales, an increase of 8.5% for the year ended
Feb. 22, 2009, though unit sales decreased 0.4%. Approximately two-thirds of all snack purchases are for indulgent snacks, according to IRI Senior Vice-President Sally Lyons Watt,
and the most popular snack food was potato chips. Dollar sales for potato chips were about
$3.17 billion, while Frito-Lay owned the top three brands based on dollar sales with Lays,
Wavy Lays and Ruffles. Potato chip flavors were largely inspired by ethnic influences including Hispanic, Asian, Mediterranean and Caribbean foods; Kettle Foods, Inc. introduced
Jalapeno chips in May 2009 while P&Gs new Restaurant Cravers line of Pringles feature the
Mexican Layered Dip flavor. Many snack food manufacturers also explored flavor combinations, with spicy, bold flavors often combined with citrus and sweet tastes to achieve a
sweet-heat profile emphasizing contrast.
Baked and kettle cooked chips performed well in 2008, with dollar sales for Lays Kettle
Cooked chips climbing 63.1% over 2007 while Kettle Foods Kettle Chips increased dollar
sales 32.6%, two of the largest single-year increases. New product introductions in this category were focused on the better-for-you image of baked or kettle cooked chips, with Herr
Foods introducing a new line of Herrs Baked Potato Crisps and Natural Kettle Cooked Sundried Tomato Pesto chips in February 2009. Kettle Foods re-launched its baked chips line
while Frito-Lay added new flavors to its Baked Lays line including Southwestern Ranch.
Cape Cod Potato Chips, a manufacturer of kettle cooked chips, also posted a strong year
with dollar sales rising 18.9% and unit sales increasing 12.6% in 2008.
In other categories, healthy considerations were a big mover of products. In the pretzel category, private label products increased unit sales more than Snyders of Hanover, which
held the largest market share at about 38.2%, or the second-largest seller Frito-Lay. In this
category, new pretzel introductions featured more bold flavors and premium/gourmet-style
varieties, such as the Southern Style Barbecue and Hot Buffalo Wing introductions in Snyders Pretzel Pieces line and the launch of the Hersheys Special Dark Chocolate variety in
Snyders sweet-and-salty Pretzel Dips line. Snack Nuts, which also benefit from a healthier
image among snack foods, were named one of the top trends to watch in 2009 by Datamonitor. Some flavor trends among nuts were sea salt varieties, spice from chiles and sweet profiles such as cocoa. The Latin American snack pepitas, or pumpkin seeds, are being
introduced into trail and nut mixes while chile-flavored seeds such as Earthharvest Pumpkorn Organic Shelled Adobo-Chile Pumpkin Seeds were among new flavor innovations.
SNACK FOODS SEGMENT FORECAST TO INCREASE 20% BY 2013
The snack food industry will register some $82 billion in sales by 2013, a 20% increase from
2008, according to Sweet and Salty/Savory Snacks in the U.S.: Lifestyle Marketing and New
Product Development in the New Economy, 3rd Edition by Packaged Facts. This increased de45

Top Food Processors: Snacks, Appetizers


& Side Dishes
(Source: Refrigerated & Frozen Foods)

Company

2008 Sales
($ millions)

Product Line

Plants

1 ConAgra Foods Inc.

$2,000.0 *

French fries, potato specialties, egg rolls, hand-held snacks

N/A

2 McCain Foods USA

$1,500.0 *

Snacks, appetizers, vegetable side dishes, french fries, potato


specialties

11

French fries, potato specialties

3 Simplot Food Group (1)

$800.0 *

4 Heinz North America

$715.0 * Snacks, appetizers, side dishes, french fries, potato specialties

5 Resers Fine Foods

$650.0 **

Prepared deli salads, side dishes, potato and pasta side


dishes, desserts

12

6 Cavendish Farms Corp.

$500.0 *

French fries, potato specialties

Rich Products Corp.,


Consumer Brands Div.

$465.0 *

Value-added shrimp, seafood & shrimp specialties, breaded


& dough-enrobed snacks, appetizers

8 Windsor Foods

$385.0 *

Mexican snacks, Asian snacks, appetizers, side dishes

9 Orval Kent Foods Co.

$300.0 *

Prepared deli salads, side dishes, prepared fruit, desserts

Kraft North America


Grocery

$280.0 *

Gelatin, pudding, snack bars

N/A

11 J&J Snack Foods Corp.

$210.0 *

Soft pretzels, funnel cakes, Italian ice, juice bars

12 Pillsbury USA (2)

$160.0 *

Snacks

$150.0 *

Puddings

$150.0 *

Sushi, Asian appetizers,side dishes, salads

$135.0 *

Egg rolls, appetizers, potato specialties, hors d'oeuvres

N/A

Potatoes, side dishes

N/A

10

Kozy Shack Enterprises


Inc.
Advanced Fresh
14
Concepts Corp.
The Schwan Food
15
Company
13

16 Michael Foods

$125.0

N/A

sire stems in
part from the
recession,
which has
snack consumers embracing a value
mentality that
prizes quality
and whole ingredients, better-for-you
recipes and
green production practices.
While low
prices are a
draw, consumers are
seeking snacks
with fewer additives or
preservatives,
and are spending extra dollars for organic
and premium
snack treats.

In related
news, the total
Claridge Food Group
18
$100.0 *
Hors d'oeuvres, quiche, appetizers
N/A
(3)
number of inhome snack
19 VIP Sales Co. Inc. (4)
$95.0 *
Pot stickers, egg rolls, spring rolls
1
occasions are
20 Chloe Foods Corp.
$85.0 *
Prepared deli salads, side dishes, desserts, olives
2
projected to in21 Unilever US Foods
$75.0 *
Side dishes
N/A
crease 19% by
2018 comCuisine Innovations LLC
22
$75.0 *
Appetizers, hors d'oeuvres, seafood appetizers, soups
3
(5)
pared with
23 Sandridge Food Corp.
$70.0 *
Prepared deli and pasta salads, soups, desserts
2
2008, according to The NPD
Golden County Foods
24
$70.0 *
Snacks, appetizers, side dishes, potato specialties
2
Inc.
Groups A Look
25 Bob Evan Farms Inc.
$55.0 *
Side dishes
N/A
into The Future
of Eating.
*R&FF estimate ** Company-provided estimate N/A = Not available.
(1) Unit of J.R. Simplot Co. (2) Unit of General Mills Inc. (3) Includes VLR Corp., Plats du Chef, Circle Foods
Morning
(4) Unit of VIP Sales Holding Corp., Friedman Fleisher & Lowe LLC (5) Unit of TMCI Holdings Inc.
snacking is
forecast to increase by 23%, afternoon snacking by 20% and evening snacking by 15% compared to 2008. The strong projected growth in snacking is both a reflection of the growth
in new types of snack foods as well as an evolution of how consumers eat, stated study author and NPD director of product development Ann Hanson. Many consumers are eating
on the go and there are more and more foods available to meet this need.
17 Frozen Specialties Inc.

$100.0 *

Pizza, snack bites

46

... Top processors faced a difficult year in 2009, between greatly varying input costs and
wallet-conscious consumers. Listening to customer desires and keeping company flexibility
is key to surviving until 2010 when the economy is predicted to recover slightly.
KRAFT FOODS CADBURY BID CULMINATION OF RECENT TRENDS
As of press time, Kraft Foods bid for Cadbury PLC in early September 2009 was anything
but spontaneous. The potential acquisition follows a trend in confectionery consolidation
that was, until now, most evident in the 2008 purchase of William Wrigley Co. by Mars, Inc.
Looking at U.S. Census data, the number of confectionery manufacturing establishments
with greater than 99 employees declined from 2002 to 2007, while in other categories that
number increased. A growing confectionery market, combined with large-scale acquisition
activity, has created a segment comprised of smaller specialty manufacturers and giant
food powerhouses such as Mars, Kraft Foods and Cadbury. While the Sept. 7 Kraft bid
caught many by surprise, the gears had been moving for quite some time and the proposal
is the result of years of merger and acquisition activity and a changing confectionery market.
European and International Impact
Kraft Foods has had Cadbury in its sights for at least one year, though market and economic
trouble delayed the bid, according to The Wall Street Journal (Sept. 8). A deal between Kraft
and Cadbury would create a global food company with $50 billion in annual revenues, and
would also boost Krafts growth prospects by giving it access to new brands. Kraft recently
indicated that it will focus on higher-margin, priority brands to boost productivity in Europe,
supporting the companys interest in Cadbury. In an Aug. 28 letter to Cadbury CEO Roger
Carr, Kraft CEO Irene Rosenfeld called the possible acquisition of the British candy company
a logical next step in our transformation as we shape the company into a more global,
higher-growth, and higher-margin entity.
Influence Of Chewing Gum Market
Aside from the global growth prospects, a significant motivation for Krafts bid is the large
chewing gum business held by Cadbury. Kraft Foods, which has practically no presence in
the global chewing gum market, seeks to gain Cadburys 29% share, according to Businessweek (Sept. 8). A rising segment with a lot of potential, the global gum market expanded
from a $16 billion industry in 2004 to $23 billion in 2008, according to Euromonitor International. Predicted to grow 4.8% in 2009, the chewing gum market will outpace the chocolate and nonchocolate sugar confectionery markets, which are believed to rise 4.1% and
3.5%, respectively.
... It is imperative for beverage companies to keep a keen ear towards consumer trends, as
currently, carbonated beverages (with the exception of energy drinks) seem to have fallen
out of favor. Seemingly healthy beverages with wide appeal will be essential.
OVERALL CSD MARKET, LARGE CSD BRANDS DECLINED
The volume of the U.S. carbonated soft drink (CSD) market declined 3% in 2008, compared
to 2007s 2.3% decline, 2006s 0.6% decline and 2005s 0.2% decline, according to Beverage
Digest (March). The declines of the last four years eliminated years of growth from 1997 to
2004.
47

Top Carbonated Soft Drink Brands


(Source: Beverage Digest)

Brand
Coke (Coke)
Pepsi-Cola (Pepsi)
Diet Coke (Coke)
Mt. Dew (Pepsi)
Dr Pepper (DPS)
Diet Pepsi (Pepsi)
Sprite (Coke)
Fanta (Coke)
Diet Mt Dew (Pepsi)
Diet Dr Pepper (DPS)

'08 Market
'08 Cases
Share
% Chg. (millions)
17.3%
0.1%
1,664.6
10.3%
-0.4%
990.9
10.0%
Flat
960.3
6.8%
0.2%
653.0
6.1%
0.2%
586.1
5.7%
-0.3%
550.3
5.6%
Flat
536.7
1.8%
Flat
175.8
1.8%
0.2%
169.6
1.6%
Flat
157.6

% Chg.
-2.5%
-6.5%
-3.0%
-1.0%
Flat
-7.5%
-3.0%
-1.0%
4.0%
2.3%

-Cases & Dollars - The industrys total


volume in 2008 was about 9.6 billion
cases, a level not seen since 1997.
The retail dollar amount of the U.S.
CSD business in 2008 was up about
1% to $72.7 billion, up from 2007s
$72 billion and $70.1 billion in 2006.
The retail value increase, in the face of
declining volume, is due to two factors: price increases of traditional
CSDs and the growth in premiumpriced energy drinks.

- Companies The top two companies,


Coca-Cola and PepsiCo, generated
similar results in 2007 and both lost share in 2008. As in 2007, the strongest growth performers in 2008 were the energy drink companies. Hansen Natural, which produces both
energy drinks and other CSDs, is the No. 6 company, posting a 3.3% increase in CSD
growth.
- Brands Among the brands below the top 10, Coke Zero posted a 36% growth while Pepsi
Max was up 25%. However, the larger brands, Coke and Pepsi, both declined, as did the two
large diet colas, Diet Coke and Diet Pepsi.
GLOBAL CARBONATE SALES GREW DESPITE ECONOMIC DOWNTURN
Significant changes in financial and economic conditions in 2008 led Canadean to downgrade earlier predictions for the global carbonates market by around 1%, bringing the total
volume growth figure to between 1% and 2% for 2008. Beverage experts predicted that the
market will reach 208 billion liters by
the end of 2008, or 31 liters for
Top Carbonated Soft Drink
every global consumer. Canadean
Companies 2008
also forecasted a similar growth rate
(Source: Beverage Digest)
for 2009 as was seen in 2008.
Company
Coca-Cola Co.
Pepsi-Cola Co.
Dr. Pepper Snapple
Cott Cop.
National Beverage
Hansen Natural
Red Bull
Big Red
Rockstar
Private Label/Other
Total Industry

'08 Market
Share
42.7%
30.8%
15.3%
4.7%
2.6%
0.8%
0.7%
0.4%
0.4%
1.6%
100.0%

'08 Cases
% Chg.
-0.1%
-0.3%
0.3%
-0.1%
0.1%
Flat
0.1%
Flat
Flat
Flat

(millions)

% Chg.

In the developed parts of the world,


4,107.6
-3.1%
the recession prompted many con2,960.4
-4.0%
sumers to purchase private label
1,471.2
-1.3%
products and frequent hard discoun448.0
-6.0%
ters. While domestic soda consump247.5
1.5%
tion declined, it is more pronounced
79.0
3.3%
in value than in volume, as stay at
67.2
5.2%
home consumers bring on-premise
43.6
2.7%
40.2
-2.0%
sales down. In global markets,
156.3
-2.5%
Canadean expects an 8% expansion
9,621.0
-3.0%
of carbonates in the Middle East and
North Africa as a result of higher incomes from raised oil prices. Expansion in China is forecast at 12%, and along with the rest
of Asia and Africa will be the main driver behind global carbonate growth.
48

Comparatively, falling sales in


Top 10 Brands of Refrigerated Fruit Drinks In 2008
North America bring down the
(Source: Dairy Foods)
global carbonates rate so signifi08 Sales
% Chg. Unit Sales % Chg.
Brand
($ Millions)
vs. 07
(Millions)
vs. 07
cantly that if it were excluded from
Sunny Delight
$178
5.0%
83
3.5%
the figures, global carbonate
Minute
Maid
$115
17.9%
63
27.4%
growth rate would double, even
Tamapico
$106
7.6%
77
2.5%
though the U.S. remains the largest
Welch's
$96
4.0%
41
-0.6%
per capita consumer of carbonates Tropicana Light & Healthy
$52
-6.0%
16
-10.0%
in the world. Central and South
Tropicana
$41
2.8%
29
-4.2%
America was predicted to overtake Odwala
$33
6.2%
9
3.8%
Private
Label
$20
-9.3%
15
-17.0%
North America as the biggest marSunnyD
$19
23.4%
12.7
36.1%
ket for soda in 2008, despite havBright & Early
$10
8.2%
9.2
4.2%
ing their projected growth rate
Total Category
$746
5.2%
400
3.1%
reduced by around 2.5%. However,
despite the tempered forecasts, Canadean does predict that stakeholders in the carbonate
category appear better prepared to endure the coming economic hardships than most.
COTT LOSING EXCLUSIVE SUPPLY PACT WITH WAL-MART
Wal-Mart Stores Inc. is phasing out its its exclusive supply agreement in the U.S. with Cott
Corp. without cause, according to the Toronto-based soft-drink maker. The announcement will end a 10-year supply agreement between the two companies. However, Cott will
continue as a supplier to Wal-Mart, reported The Wall Street Journal (Jan. 28, 2009). The
termination will be effective in late January 2012. The new action allows Wal-Mart, if it
chooses, to use another beverage maker for as much as one-third of its private-label softdrink requirements in the first year. In the second year, as much as two-thirds of its privatelabel soft drinks can be manufactured by a company other than Cott. Wal-Mart represents
more than 30% of Cotts overall business, and accounts for an estimated 40% to 50% of
Cotts business in the U.S., according to Reuters.
... Coffee is growing in influence and in consumption in grocery stores, convenience stores
and restaurants alike. CPG companies would be wise to expand their selection of coffees to
give retailers more options for a growing consumer base. Offering more Fair-Trade as well
as organic coffees may anticipate increasing demand for when the economy recovers.
COFFEE EXPANDS MARKET PRESENCE
Coffee continues to rise in popularity as more companies invest in a broader selection for
consumers. Approximately 55% of U.S. adults consume coffee on a daily basis, according to
the 2008 National Coffee Drinking Trends report from the National Coffee Association,
while daily consumption of gourmet coffee increased to 17% of the entire adult population,
up from 14% in 2007. Preliminary data also revealed that total coffee consumption for
adults in the 25- to 39-year old age group is now at 47%, up 3% from the previous year.
Past-day consumption of coffee surpassed that of soft drinks for the first time in 2007, and
although the gap narrowed in 2008, daily consumption of coffee is still directionally higher.
The market did not post all positive gains, however, with coffee consumption by 18- to 24year olds dropping for the first time this decade from a high of 37% in 2007 to 26%, but still
stabilizing to its 2005 level.
Most experts attribute the change in coffee consumption to its increased level of exposure.
49

TOP U.S. LIQUID REFRESHMENT


BEVERAGE TRADEMARKS
(Source: Beverage Marketing Corp.)

2008 Volume

Trademark

Company

Coca-Cola
Pepsi
Mountain Dew
Dr Pepper
Gatorade
Sprite
Tropicana
Nestle Pure Life
Aquafina
Dasani

Coca-Cola
Pepsi-Co
Pepsi-Co
Dr Pepper/Snapple
Pepsi-Co
Coca-Cola
Pepsi-Co
NWNA
Pepsi-Co
Coca-Cola

(Million gallons)

4,493.5
2,703.8
1,333.3
1,155.6
1,060.1
893.2
672.0
628.6
592.4
558.9

When Baby Boomers became coffee drinkers,


they typically were consuming the beverage
from instant coffee or pre-ground coffee in a
tin can. Todays young adults are considered
the driver of specialty coffee beverages,
which include made-to-order lattes and readyto-drink individually packaged coffee-milk
beverages. This demographic is also driving
organic coffee products, with the Sustainable
Markets Intelligence Center estimating that
organic coffee represents 2.5% of the entire
U.S. coffee market, reported Dairy Foods
(May).

In terms of market trends, many coffee industry experts claim coffee drinkers have matured. They are looking for more flavor and more
originality, thus resulting in new lighter-roasted options. Starbucks, for example, introduced a somewhat-lighter and smoother roast called Pikes Place in early 2009 as part of its
plan to energize U.S. operations. Meanwhile, Green Mountain Coffee Roasters Inc. developed its own line of premium single-origin coffees to grab those drinkers interested in
learning more about the roots of the coffee they drink. The line includes an African coffee
called Tanzanian Combe Reserve and a coffee from the volcanic region of San Marcos,
Guatemala, called Guatemalan Finca Dos Marias. Both are lighter-roasted coffees, reported
The Associated Press.
... Functional foods are also following the current trends of more healthful food products,
with the added benefit of ingredients that appeal to consumer desire for better living. Food
and beverages alike stand to gain from this rising popularity.
FUNCTIONAL FOODS, A GROWING MARKET
More than 80% of Americans are currently consuming, or would consider consuming, foods
with added health benefits, according to the International Food Information Council Foundations 2008 Food and Health Survey. Some 62% of Americans consider healthfulness an important food attribute. U.S. manufacturers of functional foods that include elements for
immune and cognitive health and weight-loss have seen the value of their market rise by
63% from 2002 to 2007, according to a May 2008 report by Mintel International Group Ltd.
The immune health functional food category is in the midst of expansion, as probiotics, prebiotics and synbiotics are introduced into yogurt and dairy beverages, juices, baked goods,
soups and coffee. Immune health is rapidly emerging as a key driver in functional food and
wellness food sales, as consumers are better at understanding the link between nutrition
and health, stated Joseph ONeill, executive vice president of sales and marketing at BeneoOrafti Inc. Consumer education remains key to the expansion of the pro, pre and synbiotic
functional food category. As consumers are becoming increasingly more educated on the
importance of digestive function, manufacturers have a significant opportunity to market
prebiotic products linking digestive health, inner balance, and immunity, asserted Mr.
ONeill.
We believe the probiotic functional food market is just beginning to take off, stated
50

Michael Bush, vice president of business development at Ganeden Biotech Inc. Consumers
want choices [in probiotic foods] beyond yogurt. As more choices become available, the
market will continue to grow. Beneo-Orafti, supplier of natural prebiotic chicory fibers, has
seen its products used in a range of applications, such as baked goods, beverages, cereals
and dairy foods. Prebiotics may also be added to refrigerated fruit juice and dry-mix products, explains Mr. ONeill. Meanwhile, Ganeden Biotechs probiotic ingredient is shelf-stable
and can withstand extremes such as heat, cold and high pressure.
Functional foods that are created to support cognitive health featuring the omega-3 fatty
acids docosahexaenoic acid (DHA) and eicosapentaenoic acid (EPA) are also in high demand.
The U.S. market for foods rich in omega-3 fatty acids will reach $7 billion by 2011, according to Packaged Facts. Lori Covert, vice president of marketing and communications at
Ocean Nutrition Canada, supplier of DHA/EPA ingredient MEG-3, attributes the growth to the
general trend of healthy lifestyle, baby boomer concerns about cognitive and cardiovascular
health and parental concerns about the developmental health of their young children. We
see a huge growth in the future for products positioned for cognitive health, Ms. Covert
stated. To date, MEG-3 is included in baked goods, dairy products, juice and other foods.
With omega-3 fatty acids, consumers can get the same great taste in brands they love and
trust, with the added benefit of improved nutriFUNCTIONAL FOODS MARKET INCREASED
tion, added Ms. Covert.
6% IN 2008

Functional foods that can promote weight loss are


also likely to meet a receptive audience. Although
two-thirds of Americans claim they are making efforts to eat healthier foods, only 52% are trying to
increase physical activity. Despite high demand,
most ingredient suppliers agree that the market for
weight-loss products is fledgling. Theres no place
to go but up, stated Bob Green, president of Nutratech, Inc., supplier of the weight loss ingredient
Advantra Z, a patented Citrus aurantium extract.

The U.S. retail market for functional foods and


beverages increased 6% in 2008, with sales
totaling almost $31 billion, according to Packaged Facts Functional Foods and Beverages in
the U.S., 4th Edition report. Total U.S. retail
sales of functional foods and beverages will
continue to grow at a steady pace through
2013, and reach approximately $43 billion.
During the five-year period from 2003 to
2008, several functionally oriented food and
beverage categories performed well, including
yogurt, energy drinks, nutritional snacks and
trail mixes, milk substitutes and soymilk, and
refrigerated blended fruit drinks.

John Alkyre, president of AHD International, supplier of weight-loss ingredient LuraLean, believes
there are two major difficulties faced by the functional food for weight-loss category: educating consumers and the lack of generally regarded as safe (GRAS) weight-loss ingredients.
Although [consumers] are showing more interest in learning about the relationship between certain foods and health, that does not always translate into taking the next step and
purchasing the product, Mr. Alkyre explains. Although Advantra Z can be found in a variety
of meal replacements, sports nutrition beverages, vitamin waters, nutrition bars, shakes and
smoothies, Mr. Alkyre adds, There are also a host of challenges when it comes to developing an ingredient that can easily be used in a diverse array of food applications ranging
from breads to soups to drinks. According to Harshal Kshirsagar, Nutalys business development project coordinator at Roquette America Inc., formulators will have to retain the
conventional benefits of palatability, cost, and convenience, all while delivering healthfulness and sustainability.
With likely high costs, the question remains whether consumers are willing to pay a premium for functional foods. Many consumers will pay a premium if they believe they will receive a direct benefit from the product. While some nutrients, vitamins and minerals are
51

common in foods, the fact that others, such as omega-3 fatty acids, are less abundant can
justify a higher price point. Still, some 48% of consumers bought a functional food within
the past three months, according to Mintel estimates. Consumers determine which health
benefits are the most important to them and justify the additional cost in exchange for the
benefits the products offer, stated Ganeden Biotechs Michael Bush.
BEAUTY FROM WITHIN TREND GOES MAINSTREAM
Beauty food launches in 2008 marked a trend with beauty from within products, reported
Beveragedaily.com (Feb. 25). Dove Beautiful, Vitalize from Mars and Glowelle from Nestle
were among the new edible and drinkable beauty products released in the U.S. Hansen Beverage Company introduced SELF Beauty Elixir, a functional, ready-to-drink beauty beverage
infused with a blend of vitamins, minerals, natural fruit and botanical extracts with antioxidants meant to promote and support healthy skin and overall wellness.
International launches included Boots Choxi+ chocolate in the UK and Spain and Emmi released Aloe Vera Sensitive yogurt and Beauty Case in Switzerland. Products demonstrating
visible results have the best potential, according to Ewa Hudson, Euromonitor analyst. They
key is for manufacturers to not only develop products that work but to persuade consumers
to embrace the expensive concept of beauty foods. Ms. Hudson predicts a shift from standalone products to those sold in bunk. Three different types of supplements are beginning to
appear on shelves: sun protection from within, anti-cellulite and mens hair recovery. Ms.
Hudson stressed work has to be done on the education front.
ENERGY SHOT SALES PROJECTED TO DOUBLE IN 2009
Energy shot sales are expected to reach about $700 million in 2009, up from about $370
million in 2008, not including sales from Wal-Mart Stores Inc., according to IRI figures cited
by Consumer Edge Research chief executive Bill Pecoriello. The 2-oz. products, which boast
caffeine, B vitamins and amino acids, are meant for people who want a jolt of caffeine without having to drink a big cup of coffee or one of the 16-oz. energy drinks that have become
ubiquitous, according to The New York Times on the Web (July 11). The most devoted
drinkers are college students,
U.S. LIQUID REFRESHMENT BEVERAGE MARKET drivers and construction
(Source: Beverage Marketing Corp.)
workers. A 7-Eleven store in
Share of Volume
Millions of Gallons
College Park, MD, one of the
% Chg.
2007 chains top sellers of energy
2008
2007
2008
Segment
Carbonated Soft Drinks
14,232.6
14,688.0
-3.1%
47.5%
48.0% shots, sold almost 400 shots
Bottled Water
8,672.9
8,757.4
-1.0%
28.9%
28.6%
during finals week at the UniFruit Beverages
3,928.2
4,009.3
-2.0%
13.1%
13.1%
versity of Maryland.
Sports Drinks

1,318.6

1,361.1

-3.1%

4.4%

4.5%

RTD Tea

859.3

875.1

-1.8%

2.9%

2.9%

Flav./ Enhanced Water

548.1

506.1

8.3%

1.8%

1.7%

Sales of energy shots are increasing as sales of tradiEnergy Drinks


365.9
335.7
9.0%
1.2%
1.1%
tional energy drinks such as
RTD Coffee
47.5
46.8
1.5%
0.2%
0.2%
Total
29,973.2
30,579.4
-2.0%
100.0%
100.0% Red Bull level off. Farmington
Hills, MI-based Living Essentials 5-Hour Energy shot boasts the majority of sales in the category, approximately 80%,
stated Mr. Pecoriello. However, that may change as larger companies introduce products of
their own. For example, Dr Pepper Snapple Group began test-marketing Venom Bite, a 3-oz.
version of its Venom energy drink; Red Bull launched a 2-oz. shot. Smaller companies are
52

also looking to capture some of 5-Hours success with products such as 6 Hour Power, Fuel
7 Hour Energy and Mr. Energy 8-Hour Energy. Taste is not a product driver, acknowledged
Living Essentials spokesperson Carl F. Sperber. 5-Hour Energys not supposed to taste fantastic, the executive noted. This is supposed to be a functional product, not something for
flavor or something for refreshment. Rather, the small container, which does not allow for
extra water to dilute the bitter aftertaste, accounts for much of the categorys appeal.
STEAM TECHNOLOGY INCREASING FRESHNESS, CONVENIENCE IN
MICROWAVE PRODUCTS
Consumer demand has risen for quality food products that are quickly and easily prepared.
When it comes to the microwave, steam cooking has raised quality to a new level, according
to Food Business News (Jan. 20). A product launch using microwave steam technology that
has proven to be extremely successful is the Healthy Choice Caf Steamers line from ConAgra Foods. Information Resources, Inc. named the line the best selling new food or beverage product through mid-year 2008. One of the requirements for recognition is that the
product earned a minimum of $7.5 million in net sales at the end of its first year in market.
Consumers told us the frozen meals they were used to didnt give them everything that
they wanted, stated Rob McCutcheon, vice-president of marketing for Healthy Choice.
They lacked the freshness todays palate demands, so by taking a healthy method of cooking (Steaming), and combining it with the separation technology developed at ConAgra, we
were able to offer a better frozen meal. The separation technology of the tray format allows the product to be steamed more thoroughly throughout the package while cooking,
allowing the vegetables to stay crisper, Mr. McCutcheon stated. The separation technology proved to be so popular, Healthy Choice has used it in its Fresh Mixers line, which is
microwavable pasta or rice-based dishes that may be stored at room temperature. In October 2008, the H.J Heinz Co. introduced Ore-Ida Steam n Mash potatoes. The potatoes are
already washed, peeled, chopped and ready to steam in the microwave. Steam to cook is a
great way to achieve a fresh taste with the convenience of a microwave, stated Tracy Parsons, spokesperson for Heinz. Other steamed potato products on the market include Wada
Farms Easy-Steamer Gourmet Red Potatoes, which are washed, ready-to-steam and come in
a microwavable bag, according to the Global New Products Database from Mintel International.
Innovations in steam technology have mostly been used with frozen vegetables. Birds Eye
Foods has been using the technology in many of its products. The company introduced
Steamfresh Meals for Two in late 2008 in varieties such as Shrimp Alfredo and Asian Style
Chicken Vegetable Medley. The Steamfresh line also includes fresh frozen vegetables in varieties such as Asian Medley, Southwestern Corn and Cauliflower. The packaging is designed
to allow steam to build up and be released as necessary. Birds Eye also introduced a lemon
pepper vegetable variety under the steam and serve label, which utilizes a microwavable
steam vent and is packaged in a 10-oz. container, according to Mintel.
Green Giant has several frozen vegetable products that use steam for cooking, including the
Valley Fresh Steamers line, which includes varieties such as Broccoli and Cheese Sauce,
Asian Style Medley and Super Sweet Corn and Butter Sauce available in microwavable bags.
The Valley Fresh Steamers products were first introduced nationwide in September 2008.
Store brands such as Archer Farms are also following the trend, with steam-in-the-bag
Asian-Inspired Rice and Broccoli Seasoned Blend and Indian-inspired Cashew Saffron Basmati
53

Rice, Mintel claimed. According to Mintel, there were 151 new products launched with
steam on the product label in 2008, up from 104 in 2007 and 51 in 2006.
PIZZA MANUFACTURERS GO NATURAL, ADD PREMIUM INGREDIENTS
In an effort to attract consumer interest to the frozen pizza category, recent innovations focused on several iniTop Food Processors: Fruits & Vegetables
tiatives, including
(Source: Refrigerated & Frozen Foods)
natural product line
2008 Sales
Company
Product Line
Plants extensions and deliv($ millions)
ering restaurant-qualChiquita-Fresh Express
1
$1,300.0 *
Fresh-cut salads, coleslaw, vegetables, fruit
5
ity pizza. Data from
(1)
Information Re2 Taylor Fresh Foods Inc.
$1,000.0 *
Fresh-cut salads, fruit
10
sources, Inc. (IRI) for
Ready Pac Produce
3
$750.0 **
Fresh-cut salads, vegetables, fruit
10
Inc. (2)
the 52 weeks ended
4 Dole Food Co.
$700.0 *
Fresh-cut salads, vegetables, fruit
5
May 17, 2009 shows
that while several
5 Birds Eye Foods
$500.0 *
Vegetables, fruit
3
new products are
6 Lakeside Foods Inc.
$425.0 *
Vegetables, vegetable-and-sauce- meal starters
7
gaining ground in the
marketplace, the
7 General Mills Inc. (3)
$350.0 *
Vegetables, fruit
N/A
overall category is off
8 NORPAC Foods Inc.
$315.0 *
Vegetables, vegetable-based meals, fruit
5
pace from the same
Sunrise Growersperiod in 2008, re$250.0 *
Fruit
3
9
Frozsun Foods
ported Milling and
10 Allens Inc.
$230.0 *
Vegetables
5
Baking News (June
11 Superior Foods Inc.
$225.0 *
Vegetables, fruit
2
30). Unit sales for the
period were down
12 Simplot Food Group (4)
$220.0 ****
Vegetables, fruit
2
2.5% from the same
13 The Pictsweet Co.
$200.0 *
Vegetables
4
period a year earlier.
Dollar sales, mean14 Twin City Foods Inc.
$190.0 *
Vegetables
4
while, were up 4.8%.
15 Hanover Foods Corp.
$180.0 *
Vegetables
N/A
Likely factors inRiver Ranch Fresh
16
$165.0 *
Fresh-cut salads, vegetables
2
cluded price inFoods LLC
creases and a sharp
National Frozen Foods
17
$160.0 *
Vegetables
3
Corp.
uptick in private sales
18 SunOpta Inc. (5)
$155.0 ***
Fruit, fruit and vegetable ingredients
7
growth.
19 McCain Foods USA Inc.

$125.0

Processed vegetables, fruit ingredients

$115.0

Vegetables, fruit

21 Inn Foods Inc.

$90.0

Vegetables, fruit

22 Smith Frozen Foods

$75.0

Vegetables

Fruit, vegetables

N/A

20

Patterson Vegetable
Co. LLC

J.M. Smucker, Special


Markets (6)
Natural Selection
24
Foods LLC
Seabrook Brothers &
25
Sons Inc.
23

$70.0 **
$70.0

Fresh-cut salads, vegetables, fruit

$70.0

Vegetables

*R&FF estimate **Company-provided estimate ***Pro Forma figure ****Sales in category


N/A =
Not available. (1) Chiquita Brands international Inc., include Fresh Express (2) Includes subsidiaries Missa Bay
LLC and OBIM Fresh Cuy Fruit (3) Marketer of Green Giant, Cascadian farm lines (4) Unit of J.R. Simplot Co.
(5) Parent to SunOpta Fruit group. Includes 2008 purchase of Pure Nature Organics brand (6) Reflects Mar
2008 purchase of Europe's Best

54

The shift to higherpriced specialty


frozen pizzas came
as consumers
seemed to moved
away from eating out
and toward eating at
home more often. In
response, pizza makers appear to be answering with fewer
product introductions, but are more

specific in their target audience. Since reaching a high of 245 in 2007, the number of frozen
pizza products launched in the U.S. slowed, according to Mintel International Group Ltd. In
2008, the number fell to 213, and through the first half of 2009 only 94 new frozen pizza
products were introduced, putting the segment on pace for less than 200 new items, its
lowest total since 191 in 2006.
Demand for specialty pizzas is evident in sales figures for Kraft Foods Inc. The company
maintains nearly a 40% share of the category, according to IRI, and experienced growth in
its premium DiGiorno brand and super-premium California Pizza Kitchen. Convenience is
still very much on trend, and frozen pizza has always provided that state, stated Tim Cofer,
President of Kraft Pizza Co. But consumers arent willing to compromise on taste, so if you
offer them a great tasting, premium pizza like DiGiorno, then you can win them over to the
frozen section of the supermarket. Mr. Cofer also noted Kraft is seeing interest in meals
for one and that the company continues to gain traction in the single-serve category
through the launch of its DiGiorno Flat Bread Melts and California Pizza Kitchen Flat Bread
Melts. The company expanded its frozen
Top-Selling Frozen Pizza Brands In 2008
pizza plant in Little Chute, WI in summer
(Source: Information Resources Inc.)
2009. The 108,000-sq. ft. expansion in08 Sales
% Chg. Unit Sales
% Chg.
cludes a new pizza crust bakery line and an Company
($ Millions)
vs. 07
(Millions)
vs. 07
$534
9.4%
100
2.8%
assembly line, according to Milling and Bak- DiGiorno
Tombstone
$254
1.6%
70
-8.9%
ing News (June 30).
Red Baron
CPK
Totino's
Freschetta
Jack's Original
Tony's
Stouffer's
Private Label

$245
$176
$152
$148
$127
$123
$96
$296

0.9%
16.6%
4.1%
-17.2%
9.7%
-0.9%
3.4%
36.1%

63
33
117
27
45
47
35
130

-9.1%
22.4%
-9.9%
-25.4%
0.7%
-11.3%
5.6%
19.3%

Meanwhile, Schwan Food Co. is counting on


Freschetta PizzAmore to reinvigorate sales
that dropped sharply since 2008. While
Freschetta dollar and unit sales fell 17% and
25%, respectively, during the past 52 weeks
ended May 17, 2009, according to IRI, unit
sales for the Freschetta PizzAmore brand climbed 70%. Described by the company as the
future of frozen pizza, the product features the Freschbake tray that radiates heat to cook
the entire crust. In addition, the pizza, which launched in the fall of 2007, is pre-sliced,
which differentiates it from other products in the category.

Kellogg Co. continues to work its way into the frozen pizza mix through the Kashi frozen
pizza brand. In early 2009, the brand launched two all natural frozen pizzas: Mexicali Black
Bean Thin Crust and Sicilian Veggie, its first cheese-less and vegan offering. In summer
2009, Kashi launched a third new flavor, All-Natural Caribbean Carnival Frozen Pizza. The
companys focus on all natural reflects a growing trend within the segment to focus on the
claim. According to Mintel, the use of the phrase all-natural appeared on 20% of the 174
new frozen pizza products launched in the U.S. between June 2008 and June 2009. In comparison, the second-most used claim was no additives/preservatives, followed by premium and no/low/reduced trans fat. Newmans Own is also banking on the all-natural
label as well, with its Thin and Crispy frozen pizza, a line that features a crust made with
flaxseed. The brand generated nearly $8.3 million in sales and was expected to go national
by 2010, according to the company.
... While frozen food items are being seen as an affordable option to going out to eat, ice
cream is still one category that consumers are willing to spend money on, both in the standard and premium sectors. And although the category is seen as the quinessential comfort
food, consumers are still willing to try different and unique tastes and trends.
55

THE STATE OF THE ICE CREAM AND FROZEN DESSERTS MARKET


The ice cream and frozen novelties market gained roughly 4% per annum from 2002 to 2007,
according to Mintel, reported Dairy Foods (November 2008). The total market is valued at
$12.4 billion for 2007, a nearly 20% growth from 2002 when it was valued at $10.4 billion.
Total sales of ice cream and frozen dessert products are expected to rise $1.8 billion by 2012.
Nearly half of the ice cream and frozen novelties market is made up of brands from the top
two manufacturers, Nestle and Unilever. Mintel reports that Nestle, which owns Dreyers,
Edys, Haagen-Dazs and Drumstick, controlled 26.7% of the food, drug and mass merchandiser market in 2007. Unilever, owner of Good Humor, Breyers and Ben & Jerrys, accounted
for 21.8% of ice cream and frozen novelty sales in 2007. Within the category, traditional ice
cream emerges as the clear sales driver, comprising nearly 60% of the total retail market in
2007. Frozen novelties fall into second place with just over a third (36%) of sales, according
to Mintel. Sherbert and Frozen Yogurt combined accounted for 5% of category sales during
2007. Nearly nine in 10 adults (89%) report eating
Top-10 Ingredient-Related Claims On
ice cream and 59% of adults report eating frozen
U.S. Ice Cream Introductions, 2008
novelties, according to Mintels consumer survey
(Source: Dairy Foods)
findings. Some 98% of children eat ice cream. Fewer
# of
Products
Claims
than two in five adults eat sherbert or frozen yogurt
271
Kosher
and only 14% claim to eat gelato. Mintel views these
Premium
105
as ice cream alternatives, all of which have healthFat (Low/No/Reduced)
103
ier profiles than traditional full-fat ice cream.
All Natural
75
Calorie (Low/No/reduced)
No Additives/Preservatives
Low/No/Reduced Allergen
Gluten-Free
Trans Fat (Low/No/Reduced)
Sugar (Low/No/Reduced)

65
38
13
12
12
11

New products in the ice cream and frozen novelty


category strive to meet two contrasting but equally
strong consumer desires, providing a flavorful
dessert experience while adhering to diet-friendly
claims and ingredients. When it comes to healthier
ice cream, most new product innovations aim to convince consumers that low in treats can
taste good. According to Mintel Global New Products Database, low/no/reduced fat was
the second most popular claim on new frozen desserts introduced from September 2007 to
September 2008. Churned continues to be a popular label claim, with 47 new dairy-based
frozen products boasting that claim in 2008.
As healthier eating habits become more popular in the U.S., Mintel predicts that frozen yogurt, sorbet, gelato and other ice cream alternatives will become popular. Some 45% of consumers prefer the texture and consistency of gelato to ice cream, while 36% believe it tastes
better. Some 39 new gelatos were launched in the U.S. in 2007. Consumers also anticipate
portion controlled frozen novelties, with 43% wanting to see more ice cream selections on a
stick. Altogether, 598 new ice cream and frozen dessert products were launched between
January and September of 2008. Some 56 organic products were launched during the same
period, nearly twice the number of organic frozen novelties launched between 2005 and
2007.
RETAIL FROZEN DESSERTS SURVIVING DOWN ECONOMY
In 2008, frozen dessert dollar sales in U.S. retail channels were up, reported Dairy Foods
(March). According to Carl Breed, director of marketing for Blue Bell Creameries, the category growth has much to do with maintaining a traditional comfort food classification. Ice
cream is a fun, happy, comfort food that makes you feel good when you eat it. In slower
56

economic times, consumers may budget their


money a little closer but they also like to reward
themselves with ice cream.

Sales of Frozen Desserts


(Source: Specialty Food Magazine)

Type

2007

2006

($ Millions)

% Chg.

The fact that consumers are more likely to


Ice Cream
$4,099
$4,176
-1.8%
budget in the current economic climate has ben- Frozen Novelties
$2,557
$2,545
0.5%
efited the retail frozen dessert section. Weve
Sherbet
$200
$185
8.1%
Frozen Yogurt
$177
$170
4.1%
found that consumers are eating out of the
home less; thus, eating in home more often,
Mr. Breed stated. Our supermarket sales have seen a significant increase because of this.
Penny Barker, Marketing Director at Smith Products Co. adds, Our ice cream sales and volume have not yet been affected by the downturn in the economy. With more families eating
at home, there may be a slight shift in volume away from foodservice to retail stores.
In the face of the sluggish economy and escalating raw materials costs, many frozen dessert
manufacturers are downsizing packaging without lowering costs. Ms. Baker claims that
Smith dairy did not plan on reducing the size of its 56-oz. premium product in 2009, but
does believe package downsizing is a trend that will continue. During the past decade, consumers have seen many frozen dessert half gallons (64-oz.) downsized to 56-oz. In late
2008, Dreyers Grand Ice Cream Holdings, Inc. introduced its 48-oz. container; other manufacturers followed. Oregon Ice Cream has been marketing its ice cream in 48-oz. containers
for over two years, and made the change based on consumer changes.
Some companies are also downsizing their smallest selections. Dreyers Haagen-Dazs brand
recently downsized its 16-oz. cartons to 14-oz. The companys quart-sized cartons dropped
from 32-oz. to 28-oz. Blue Bell, however, is resisting the downsizing craze. Blue Bell has
elected to keep our ice cream in a true half-gallon size. We state this claim on our packaging
and we have recently introduced a new television commercial emphasizing this position,
stated Mr. Breed. The companys pints will also remain in 16-oz. cartons. Retail dollars sales
of ice cream were flat in 2008, as compared with 2007, but were up for the other three categories of frozen desserts: frozen novelties, frozen yogurt, and sherbet/sorbet/ice water, according to Dairy Foods Associations Ice Cream Market Research report. Private label ice
cream sales, however, experienced significant growth in 2008, suggesting that consumers
are economizing their ice cream purchases. Private label is driving total dollar and volume
retail sales of frozen novelties, which includes everything from single-serve cups to and
stick products to multi-serve cakes and individually wrapped items.
Based on the success of private label frozen desserts, many companies are introducing new
private label products, with a focus on frozen yogurts. For example, Super Store Industries
launched its Sunnyside Farms Fat Free Frozen Yogurt, made with probiotic cultures and advanced omega-3 fatty acids. Brookshire Grocery Co. rolled out an all-natural Supreme Blend,
containing 20% yogurt enhanced with probiotics. Oregon Ice Cream launched Julies Organic
Low-Fat Frozen Yogurt. The product is rich in prebiotic fiber and also contains six probiotic
cultures. In 2008, Kosher and Premium were the most popular claims made on new product launches, combining for a total of 85% of all ingredient-related claims. Products designed for Hispanic consumers were also popular in the past year. For example, Pierres Ice
Cream Co. launched Hola Fruita Pure Fruit Sherbet Bars in Pomegranate & Blueberry, a take
on the classic Mexican dessert, paleta. Meadow Gold Dairies launched its La Micha Paletas in
Pecan Cream Flavor.
57

Health and Wellness is also guiding new product development. For the past several years,
lower-calorie churned formulations and 100-calorie packs have been the most successful
products in the better-for-you ice cream category. Many upscale products such as the Skinny
Cow Truffle are following in this trend. One of 2008s most successful product launches
came from retailer Safeway, with its Eating Right private label brand. The brands Light ice
Cream cups contain a blend of five probiotics.
DIPPIN DOTS LOOKS TO EXPAND SIGNATURE FLASH-FROZEN PRODUCT LINES
Curt Jones, founder of Dippin Dots, is working on several new products and aims to expand
the company beyond its novelty status. We changed the way folks eat ice cream, stated Mr.
Jones. Now we have to change our business model. In an attempt to move beyond the
borders of amusement parks and boardwalks, the company is developing ice cream with
Dippin Dots mix-ins called Dots n Cream, which can be sold at supermarkets and kept in
conventional freezers. The company is also working on low-calorie, low-fat Dippin Dots that
could be sold at schools, and Fridgets, which are Dippin Dots clustered with candy or
cookie pieces. Further, Dippin Dots plans to introduce ice cream cakes, in hopes of competing with other well-established ice cream producers. Mr. Jones is applying the same flashfreeze principals to coffee beans, which would produce fresh-brewed coffee simply by
adding hot water. The coffee dots, potentially called Smokin Joe, launched at the specialty
coffee trade show in June. Mr. Jones is also considering frappe dots, that, when mixed with
milk, would taste like a frappuccino.
... Meat processors are facing the same seemingly-contradictory trend of consumers buying
more premium items even as the economy continues to stagnate. Meanwhile, sales of
lower-priced items are also increasing.
MEAT PROCESSORS RESPOND TO SHIFT IN CONSUMER SPENDING
Absolute price has replaced relative value as top priority among consumers, according to
Meat & Poultry (April). As a result, consumers continue to trade down in their meat purchases. In early March, boxed-beef prices were 10% below 2008s levels. Still, pork and
chicken continue to be less expensive than beef, prompting consumer trade-down. According to The Power of Meat, an annual study by the American Meat Institute and the Food Marketing Institute, consumers are also trading down from the highest-priced, leanest ground
beef to lower-priced, fatty meats.
Some 51% of consumers claim to have changed their meat-purchasing habits. Popular ways
to save money in the meat department include greater preparation before going to the store
and a longer selection process while in the store. Some 71% of consumers claim they read
grocery flyers for meat and poultry deals more often and more carefully than a year ago,
while 69% stock up on meat when it is on sale
Top U.S. Chicken Processors In 2008
and 67% purchase less-expensive cuts either
(Source: The Associated Press)
frequently or every time they shop.
Pilgrim's Pride
Tyson Foods
Perdue Farms
Sanderson Farms
Wayne Farms

% Market
Share
23.0%
19.0%
7.6%
5.6%
4.6%

Weekly Production
(In Million-lbs.)
170
140
56
41
34

Overall beef demand declined around 2% in


2008 from 2007. The decline accelerated in the
fourth quarter from the third and continued to
do so in the current quarter. Pork demand decreased by 3% in 2008 and has also fallen more
58

drastically this year. Both will


likely decline more in 2009
than in 2008. USDAs forecast
for 2009 is for beef disappearance to be up 28 millionlbs. from 2008. Pork
disappearance will be up 519
million-lbs., while broiler and
turkey disappearance will be
down 118 million-lbs. In an
effort to improve margins,
meat packers are considering
running plants five days per
week and shutting down on
Saturdays. Weak demand nationally and abroad has already forced beef packers to
run reduced hours. Cattle
slaughter from Jan. 1 to Mar.
10, 2009 was down 1.9% from
the same period in 2008, with
fed steer and heifer slaughter
down about 4%. Hog slaughter was down about 1.5%.

Top Food Processors: Meat & Poultry


(Source: Refrigerated & Frozen Foods)

2008 Sales
($ millions)

Company
1 Tyson Foods Inc.
2

$26,800.0

Cargill Meat Solutions


Corp.(1)

$21,000.0

Product Line

Plants

Chicken, beef, pork

N/A

Beef, pork, turkey

N/A

Pork, turkey

N/A

Chicken

46

Beef, pork, lamb

13

3 Smithfield Foods Inc.

$11,300.0

4 Pilgrims Pride Corp.

$8,500.0

5 JBS USA (2)

$8,000.0

6 Keystone Foods LLC

$5,800.0

Beef, poultry, fish, pork

N/A

$5,700.0

Beef

Beef, pork, turkey

N/A

Chicken, turkey

11

National Beef Packing


Co. (3)

**

8 Hormel Foods

$4,800.0 (6)

9 Perdue Farms Inc.

$4,100.0

10 Sara Lee Corp.

$3,000.0

Pork, beef, turkey

N/A

11 OSI Group LLC

$3,000.0 * (7)

Beef, pork, poultry

N/A

**

12

American Foods Group


LLC

$2,500.0

Beef, pork

N/A

13

SYSCO Specialty Meat


Cos.

$2,000.0

Beef, pork, veal, poultry

N/A

$2,000.0

Chicken, turkey

12

14 Foster Farms

The national cattle herd may


15 Koch Foods
$1,800.0 *
Chicken
N/A
shrink in 2009 by 1.5 million
Golden State Foods,
16
$1,800.0 *
Beef
2
Meat Products Group
after declining 1.544 million
17 Sanderson Farms
$1,700.0
Chicken
8
in 2008. Canadian cattle
numbers are declining as
18 Kraft Foods
$1,400.0 * (8)
Pork, beef
N/A
well, as mandatory country$1,500.0 **
Turkey
7
of-origin labeling has made it 19 Butterball LLC
more difficult to import Cana- 20 Wayne Farms (4)
$1,300.0 **
Chicken
13
dian and Mexican cattle and
21 Mountaire Farms
$1,100.0 *
Chicken
3
hogs into the U.S. Cattle imports in the first two months
22 Seaboard Foods (5)
$1,100.0
Pork
3
of 2009 were down 37.5%,
Greater Omaha
23
$975.0 *
Beef
1
while hog imports where
Packing Co,
down 48%. In 2009, packers
24 Boar's Head Provisions
$825.0 *
Beef, pork, turkey, chicken
7
returned to a bare bones ap25 Wolverine Packing Co.
$850.0 *
Veal, beef, pork
1
proach to operations without
*R&FF estimate ** Company-provided estimate N/A = Not Available
compromising food safety
(1) Subsidiary of Cargill Inc. (2) Unit Of JBS S.A., Sao Paulo, Brazil (3) Unit of U.S. Premium Beef LLC (4)
and product quality. Packers
Unit of ContiGroup Cos. Inc. (5) Unit of Seaboard Corp. (6) Excludes shelf-stable grocery, specialty &
international sales (7) reflects 2008 sale of overseas units to Marfrig (8) Excludes pizza, refrigerated
also found new ways to imlunch kits
prove meat yields, and accurately measure fat-to-lean balance in ground beef products.
HIGH-END BEEF BEING SOLD MORE OFTEN AT SUPERMARKETS
High-end beef is being sold more in retail butcher cases due to a severe contraction in
59

steak-house dining and an expansion of specialty ranches and herd sizes during the steakhouse boom. For example, in 2006, Boise, ID-based Snake River Farms enlarged its herd of
7,000 cattle and sold more than 90% of its Wagyu beef to restaurants; now, the herd is numbered at 10,000 and retail stores account for a third of sales. Prices for steak-house cuts
such as tenderloin and rib eyes are down 3% to 12% from 2008, according to the National
Cattlemens Beef Association, reported The Wall Street Journal (July 15). Whole Foods Market, which lowered its beef prices, is finding that consumers are purchasing meat from the
entire cow, enabling the company to purchase more whole animals.
DAIRY INDUSTRY ROUNDUP: CHANGING DAIRY MARKET
Milk Sales Up, But Consumers Downsizing
Milk sales are up while higher prices mean more revenue but fewer sales for the industry,
reported Dairy Foods (November 2008). Dairies are feeling the pain of the 2008 trifecta:
abnormally high fuel, raw milk and resin pricing, which cannot be recovered, explained
Miriam Erickson Brown, president and chief executive officer of Anderson Erickson Dairy Co.
Dollar sales for the total milk category were up more than 10.3% to $13.02 billion for the
year ending Sept. 7, 2008, according to Information Resources, Inc. (IRI). The numbers account for sales of 4.34 billion units, down 3.6% for the same period.
However, the latest data shows a continued downward trend in unit sales, a sign that consumers are being dissuaded by high prices. We see consumers in every market making alternative beverage choices and downsizing from gallons of milk to smaller sizes out of
budgeting necessity, stated Mr. Brown. The bright side of this consumer trend is the opportunity for our industry to demonstrate the value of the total nutritional package-a point
of view other foods can make as well. U.S. sales of milk are expected to reach $24.8 billion
by 2011, according to Mintel. Growth will be driven by innovation in types of milk, hybrid
products and price increases.
Average price per unit for the overall milk category increased nearly 13 cents over the previous year during the period ended Sept. 7, 2008. The biggest single increase among the top
20 brands was 60 cents. The highest price per unit among the top 20 brands for the same
period was $4.40. Dollar sales of whole milk are up 8.35% to $3.4 billion, units sold are
down nearly 5% to 1.08 billion, according to IRI data. Sales of skim and low-fat milk are up
nearly 12.4% to $8.27 billion, with units down 2.54% to 2.72 billion. Dollar sales in the flavored milk, eggnog and buttermilk category are up about 1.3% to $7.64 million, while units
are down 8.8% to 352.7 million. The milkshake and non-dairy drinks category were down
nearly 15% to $58.8 million and
Quarterly Sales of Lowfat and Skim Milk
units down nearly 27.9 million, a
(Source: Information Resources Inc.)
drop of almost 28%.
Reporting Period
13 weeks ended
6/29/08
3/30/08
12/30/07
9/30/07
7/1/07
4/1/07

Dollar Sales % change


(millions) vs. year ago
1,986
2,126
2,104
2,063
1,842
1,816

6.58
1.04
1.99
12.00
1.39
5.05

Unit Sales
(millions)

% change
vs. year ago

665
697
685
687
683
714

-4.69
1.86
-0.35
0.54
-4.3
1.85
60

Processors are turning to couponing and marketing to increase


sales. Consumer trends and concerns we have identified beyond
pocketbook concerns include a desire to buy local, support green
practices and a renewed and
heightened interest in food

safety, stated Al Streeter, corporate marketing manager for Roberts Dairy Co., co-owned by
Prairie Farms and Dairy Farmers of America. Value-added products, like lactose-free and organic sales continue to increase in both dollars and volume. Organic milk especially is doing
relatively well. Horizon Organic, part of Deans Foods WhiteWave division, is the top-selling
brand of whole milk, behind private label and second for the skim/lowfat segment, according to IRI. In reaction, major retailers have increased their own private label offerings. Consumers feeling about organic milk may be mitigating the serious impact of retail price
increases, where previously the same feelings had been pushing milk in incremental volume
growth.
Due to the emergence of a global market, the volatile cycle of domestic production and
price have changed. Tom Gallagher, CEO of Dairy Management Inc., claims that price and its
impact are often misinterpreted. Our view of price is that when people say the price is too
high it is a misstatement. The issue isnt the price as much as it is the price volatility. Typically with consumable goods other than gasoline, you dont see a whole lot of price volatility. But with milk you can see it go anywhere from $2.50 a gallon to $3.50 or even $4.75.
Mr. Gallagher points to comments from Peter Vitaliano, an economist with the National Milk
Producers Federation. Peters analysis is that
Global Dairy Drinks Consumption Growth
the strengthening of the global market pro(Source: Canadean Limited)
vides an underlying strength in domestic mar2007/06
2008/07
Country
ket so that after this period of high prices, we
% per Annum (Volume)
Asia
+5.1
+0.5
may not have the sharp declines that we had
Australasia
+2.3
+1.6
after the high prices in 2004.
Central & South America
East Europe
Middle East & North Africa
North America
Africa
West Europe
TOTAL

+0.9
-0.6
+1.1
+0.3
-1.6
0.0
+2.4

+1.3
+1.8
+2.0
-1.9
+4.7
-0.4
+0.5

In response, the dairy industry is looking to expand milks appeal past its usual breakfast
niche, with a renewed focus on new products,
innovation, nutrition and value. And the opportunity is there, claims Tom Gallagher, CEO
of Dairy Management Inc., and it lies in reinforcing and leveraging milks unique value propositionby providing the most nutrients per
calorie and per penny, reported Dairy Foods (February). According to USDA and Census Bureau numbers, fluid milk accounts for 30% of the U.S. milk supply with around $25 billion in
sales. At the same time, overall growth in the global dairy drinks market slowed to just
0.5% in 2008 from 2.4% in 2007, according to research from Canadean Limited, possibly a
repercussion from the Chinese melamine scandal in 2008.
Growth rates for white milk were halved in 2008, down to 0.3% from 2007s 0.6%, but remains the most important category overall, accounting for 79.4% of total global dairy
drinks demand in 2008, according to Canadean Limited. The slowdown was most apparent
in Asia, from a 5.1% growth rate in 2007 to 0.5% in 2008, and was compounded by consumption reductions in North America and West Europe. While milk is still mostly consumed at home, its increased availability in quick-service restaurants (QSR) may be a boon
as QSR sales increase. With more than 60,000 QSR chains now offering single-serve milk
on the menu, increased QSR traffic is good news for milk, claims Mr. Gallagher. Natural
and organic milk, while slowing down in terms of sales, does appear to have some staying
power through the current economic situation. USDA is also showing strength in both
whole (26.5%) and reduced-fat (23.9%) organic milk though these monthly increases are
steadily declining as each month goes by.
61

Flavored milk in single serve packages perhaps more than anything else, has helped nudge
milk slightly out of its commodity status and allowed it to act like a beverage. New products such as drinking yogurts, flavored milk and fermented milk could represent a growing
sector, but also experienced the biggest slowdown in 2008. Soy-based drinks are also on
the rise, along with strengthening in demand for evaporated and condensed milk and some
specific market niches, such as low fat milk, probiotic drinks, ESL milk, organic and fortified
milks. Drinks such as Starbucks Tea Lattes, made with steamed milk, and ready-to-drink
milk teas in Asia also represent potential in the future.
Adding extra nutritional value and removing fat and carbohydrates is another way companies are revamping milk to keeping sales growth going. According to Mintel, dairy foods
are the No. 3 category when it comes to new products touting their omega-3 content, reported Dairy Foods (February), although it is not a naturally occurring element in milk and
must be added in. This could be an important category, as 66% of respondents in a United
Soybean Board study view omega-3 fatty acids as very/somewhat healthy. A recent Packaged Facts report also comes to this conclusion, as the global market for omega-3 fatty
acids grew 34% from an estimated $3 billion in 2006 to almost $5 billion in 2007[and] will
approach $8 billion in 2012.
Butter Making A Comeback
While the milk industry has benefited from healthy trends, the butter industry has suffered.
The market for butter, margarine and table spreads reached $5.2 million in 2007, a 31% increase from 2002, according to Mintel. However, the increases are due mainly to rising dairy
prices instead of increased usage. Nearly half of butter users buy less when prices increase.
This benefits margarine processors as it sends consumers looking for cheaper alternatives.
Healthier alternatives like olive oil is seeing increased usage, sales rose 79% from 20022007, according to Mintel.
Yet despite the challenges, 80% of Americans use butter products on a regular basis, especially stick and tub margarine, according to Mintel. Total U.S. sales of butter and spreads
are expected to increase by nearly 1.2 billion through 2012. More than a third of consumers
have actually switched from margarines and spreads to butter in the past few years, a trend
that may reveal a desire for less chemically enhanced foods. New product launches are centering on health-conscious claims. Among the top health claims are kosher, organic and
low/no/reduced trans fat and cholesterol, according to Mintels Global New Product Database. Some 51 new products were launched between January and September 2008, more
than double than in 2003. However, evidence shows that no matter the claim a price ceiling
exists. Clever packaging, innovation, following trends, new formats and selling the idea of
trading up will aid companies in driving sales.
Natural Cheese Growth Strong
Like the milk and butter industries, the cheese industry has had to endure price spikes and
healthier trends yet it has seen both growth and usage increases. Consumption growth has
stemmed from convenience-driven and value-added products like shreds and slices, functional ingredients and/or organics. Nearly one in two consumers use chunk and pre-shredded cheese. Natural sliced cheese is among the fastest growing cheese products in recent
years and is the largest natural cheese segment. Around 74% report using individually
wrapped slices. More than 880 million units of natural shreds were sold in the period
62

ended Sept. 7, 2008, according to IRI. Slices are still the biggest selling form, processed or
natural. However, natural slice sales are growing while processed sales are receding. Natural
cheese is dominating the market with 61.6% of the $9.6 billion in FDM sales, according to a
Mintel report. Processed cheese experienced a 9.1% sales decline, the steepest of all the
segments.
Dollar sales for slices rose upwards of 16% with units experiencing a 3.8% increase during
the period ended Sept. 7, 2008, according to IRI. String cheese is benefiting from its reputation as a snack food, driven by single-serve packaging and popularity with children. Private
label brands are seeing the most growth; private label manufacturers accounted for over a
third of total sales in 2006. Americans consume more than 32.5-lbs. of cheese per person
and is expected to grow to 36-lbs. by 2016, according to the Wisconsin Milk Marketing
Board. Hispanic cheeses continue to grow, increasing 25% in dollar volume in the first quarter of 2008, according to a report from the International Dairy Foods Association. Other
news in the industry is the emergence of upscale in-store cheese centers and independent
shops.
As consumers become more cost-conscious, cheese manufacturers are offering their products in smaller, prepackaged varieties, reported Gourmet News (April). From 2005-2008,
volume sales rose by 4.5% for cheese sold in packages in less than 8-oz., according to Information Resources Inc. market data. Cheeses sold in 8-oz. packages were flat in volume sales
and most in packages 12-oz. and larger declined. Food safety concerns have aided the sales
in prepackaged cheeses, stated Olaf Glaser vice president/general manager of Champignon
North America. There are consumers out there willing to spend money for an imported
cheese but want a prepackaged cheese. They know nobody has touched it. Precut cheeses
can also offer new selling opportunities.
Cheese suppliers are seeing varied buying habits from consumers, as many see the category
as non-essential spending. The recession is affecting suppliers and importers of the top-selling specialty food category, reported Gourmet News (April). In 2007, the cheese and cheese
alternative category reported $3.3 billion in sales. While the numbers for 2008 are not available, all the companies that Gourmet News interviewed experienced a reduction in sales.
CHEESE BECOMING A POPULAR SNACK FOOD
Cheese is becoming a popular commodity in the $90 billion snack food industry. Some 4.5%
of consumers eat cheese as a snack, up from 2.5% a decade ago, according to NPD Group.
Overall, Americans consumed 1.1 billion cheese snacks in 2008. Children younger than six
were the largest consumers, followed by those in the six to 12 age group and 18 to 34 age
group. Women ages 18 to 34 ate slightly more cheese than men. Mintel found that 61% of
consumers view cheese as a healthy snack.
Specialty and imported cheese sales reached $853 million for the 52 weeks ending Oct. 4,
2008, which is an increase of 9.5% over the previous years figure of $779 million, according to Nielsen. The American artisan cheese trade has also expanded into the global market,
with cheeses like Rogue Creamerys Rogue River Blue Cheese being sold in London, Paris
and Amsterdam.
... Confectioneries, chocolate and ice cream seem to be some of the few segments that consumers are still willing to spend more for a high-end product. Sustainable, organic and
63

other green descriptors are often seen in this section, as ingredients (where they come
from and how they are processed) are more visible..
CONSUMERS CONTINUE TO SWEETEN UP TO PREMIUM CHOCOLATE
Growth and demand for premium chocolate is increasing, as sales were $3 billion in 2007,
growing 17% from 2006 and 200% since 2003, according to a Packaged Facts report (November), and now accounts for 18% of the total market share. Consumers often view premium chocolate as a healthy snack, and affordable self-indulgence or a meaningful gift to
another. At the same time, total U.S. retail chocolate sales rose only 4.3% from 2006 to
$16.5 billion. Both sectors are facing difficult times, with higher ingredient costs squeezing profits and a recessionary economic
Confectioners Merger & Acquisition Activity,
environment dampening
2003-2008
(Source: The Food Institute)
demand. In 2007 alone,
15
cocoa prices rose 53%, a
28-year high. The product
has found a niche in the
global population as more
consumers palates be9
come more diverse, and
premium chocolate offers
7
almost unlimited possibili5
ties.
4

Contrasting the general


situation of the chocolate
sector, premium chocolate
2003
2004
2005
2006
2007
2008
has much room to grow
and expand, as it is becoming more readily available in food supermarkets, drugstores and mass-merchandisers
(FDM), in addition to convenience stores and vending machines. Packaged Facts forecasted
that total chocolate sales would grow to 5.3% in 2008, while the premium sector would increase 15% in 2008, and 10% through 2012. New chocolate candy products increased 22%
in 2007, although this is predicted to trend down to around 11% in 2008. At the same time,
per capita consumption of premium chocolate rose from 10% in 2003 to 14% in 2007.
New product claims are becoming increasingly important and noticed by consumers, and
the top 20 package tags accounted for 88% of all claims. Premiumization claims (upscale,
gourmet, natural or organic) accounted for 60% of all claims, and health claims accounted for 11.8%. Some health-oriented terms include no preservatives, high antioxidants,
no trans-fat or no sugar. While the same five claims consistently ended up in the top 10 positions, the high antioxidants claim when from last (No. 30) to No. 7 in 2006.
The report identified several trends that are making their way through the premium chocolate sector, which can be utilized to push the segment as a whole forward.
- Microbatch So-called bean to bar chocolates focus on searching the world for unique
cocoa beans and making small batches with them. This in turn allows for greater control,
as well as greater innovation.
64

- Dark Milk & Upscale White There is resurgence in making


Top 10 Premium Chocolate
milk chocolate chic. Dark milk chocolate combines two benNew Product Claims
efits: milks ability to soften or round out the chocolate flavor
(Source: Packaged Facts)
with the health benefits of dark chocolates antioxidants and
2006
2007
lower sugar content. The sweetness of white chocolate is
Upscale
Upscale
being matched with new add-ins, such as Divines White
Chocolate with Strawberries.
Single Serving
Single Serving
- Sustainability According to a survey by Information Resources, Inc., half of respondents agreed that various environNatural
Gourmet
mental concerns were important to their purchasing
Gourmet
Natural
decisions. Several large chocolate companies like Cargill,
Nestle and Mars joined various sustainability programs and
Organic
Fresh
initiatives to ensure environmental protection. Organic and
free trade chocolates are also seeing growth.
Pure
Organic
- Premiumitizing the Familiar Using flavors that are recogHigh
Pure
nizable, often dessert-based, can open up consumer palates
Antioxidants
to new flavors, such as Russell Stovers New York Cheesecake
No
Fresh
Ganache and Doves Tiramisu bars.
Preservatives
- Exotic Flavors Out-of-context pairings are an alternative
Real
Real
approach, like Vosges Mos Bacon Bar, which utilizes appleHigh
No Trans-Fat
wood-smoked bacon, smoked salt and milk chocolate. Super
Antioxidants
fruits are also making their way into premium chocolate bars.
- Exotic Functions Chocolate has long been known to sometimes help ones mood, but
health-wellness chocolate is new to the game. Adding omega fatty acids, lowering sugar
content and bringing in dietary fiber is making chocolate more of a multitasker.
- Ultra Dark Bars Cocoa levels exceeding 70% are becoming more common as more consumers now look for the cocoa content on the outside packaging. Lindt is a little more daring with its Lindt Excellence 99% Cocoa Bar.
- Filled Bars This seems to be a largely untapped sector of premium chocolates, and companies are advised to change that. Nielsen claims that only 1.5% of chocolate bars are
filled, but that 62% of consumers consider them their favorite kind of chocolate.
SWISS MANUFACTURER INVENTS NO-MELT, LOW-CALORIE CHOCOLATE
Zurich based chocolate manufacturer Barry Callebaut created a low-calorie chocolate that is
melt-resistant. The product, called Vulcano, begins to melt only once it enters the mouth
because of the enzymes in the saliva, stated company spokeswoman Gaby Tschofen. Regular chocolate starts to soften at around 85 degrees, while Barry Callebaut claims that Vulcano can withstand heat up to 130 degrees, reported Time (July 22). The manufacturer also
claims that its new product has 90% fewer calories than standard chocolate because it contains less fatty ingredients such as cocoa butter.
CONFECTIONERY SEGMENT HOLDS POTENTIAL FOR GLOBAL INFLUENCE
The so-called maturing American palette is leading confectionery manufacturers to expand
their offerings by experimenting with flavors, flexibility and variety, according to the National Confectioners Associations Confectionary Industry Trend Report 2009. In 2008
alone, over 6,000 confectionery and snacks were introduced, and the confectionery category
as a whole led in sales and was third in food sales overall. This segment of the food industry is quite fortunate during these tough economic times, as consumers still consider them
65

IRI-Tracked Premium Chocolate Sales by Company


(Source: Packaged Facts)
Rank
1
2
3
4
5
6
7
8
9
10

Company
Creative Naturals
Alfred Ritter
Sherwood
Endangered Species
Ghirardelli
Maxfield
Lindt & Sprungli
Green & Blacks
Ferrero USA Inc.
R M Palmer

2007 Sales
% Chg.
CAGR
($ Millions) ('06 vs. '07) (2003-2007)
$2.7
91.6%
89.5%
$8.4
63.9%
36.2%
$3.4
59.7%
5.9%
$6.0
48.0%
85.1%
$86.1
45.0%
33.3%
$5.9
42.4%
7.9%
$131.1
33.2%
38.0%
$6.3
32.6%
100.0%
$85.9
23.5%
12.0%
$2.6
18.7%
-2.3%

to be affordable luxuries. Overall,


most confectioners are embracing to
some extent the social responsibility
trend, as 65% of experts claim that
eco-friendly practices will influence
product development and consumer
purchasing. Portion-control sized
products are also considered to be
the next big trend, especially products considered to be better for
you or those with supposed health
benefits.

In terms of chocolate, experts are


predicting that the product will start showing up more often in meals other than dessert, as
73% are expecting chocolate in main dishes while 38% think more will appear in appetizers.
A positive aspect of chocolate is its potential versatility, and the acceptance experts are expecting from the general public of these new varieties. About 43% claim consumers will become more open to chocolate and flavor infusions that includes spices, salts, herbs and
floral flavors. Pairing with exotic fruits such as mangoes, ethnic flavors and sweet and savory combinations like chocolate and bacon and chocolate and cheese will be on the rise in
the future, according to experts. The health benefits of chocolate will be emphasized in the
future, such as the amount of antioxidants in the product, and almost 50% of experts plan
to see more research into this segment. Consumer awareness about chocolate products
also seems to be expanding, and one-third of experts [claiming] consumers will become
more knowledgeable about the global origin of the chocolate they enjoy. Portion-controlled products are allowing consumers to incorporate candy and chocolate into a healthy
lifestyle, and 43% claim health-related influences will be the leading influence on new product development in the confectionary industry overall. Within the health category, there are
several driving factors, according to experts:
- 35% believe portion control is the leading influencer
- 25% think fortified products is the foremost driving factor
- 45% note an emerging trend towards healthier chocolate options
- In terms of oral-health care, 25% imagine that sugar-free gum options will become more
common.
Limited edition products, which allow confectionery makers the freedom to experiment
with flavors in a variety of ways, are foreseen to continue giving the American palette food
for thought. Global influences and ethnic flavors are also appearing in more confections
and chocolates and will have a large influence on new U.S. products, claims 58% of experts.
In 2009, Asian and Latin flavors are the biggest influences, although some experts were
pointing to Europe as well as Japan as emerging countries. At the same time, a third claim
that trends that occur in the U.S. will have the greatest impact on the dark chocolate market
and 20% think that the U.S. confection market will influence product pricing and economic
issues overseas. When it comes to confections for children, it seems that intense and interactive go hand in hand for popularity.
... With the increased cost of ingredients, the bakery sector has been one of the hardest hit,
and price increases in this section are not often tolerated by consumers. Consolidation in
the category has been widespread as smaller companies can not keep up with costs.
66

BREAD DOLLAR SALES GROW BUT UNIT VOLUME UNDER PRESSURE


Bread sales in 2008 were up 4.1% from 2007, according to Information Resources, Inc. (IRI)
This comes as a result of almost double-digit baking ingredient costs, which in turn made
prices rise and sales volume drop, reported Milling & Baking News. Unit sales were 3.1 billion, down 4.2%, according to IRI. Ingredient price pressures have been hard over the past
two years, especially in
relativity to the past 15
Top Food Processors: Bakery
years. For example,
(Source: Refrigerated & Frozen Foods)
standard bakery flours
2008 Sales
Company
Product Line
Plants
($ millions)
late February 2008
1 General Mills Inc. (1)
$4,000.0 *
Prepared dough, breads, sweet goods, pastries, desserts
N/A
peak price was $33.05,
Dough, par-baked sweet goods, breads, rolls, doughnuts,
up 216% from 2005. In
2 Rich Products Corp.
$1,900.0 *
7
cheesecakes, muffins
consequence to the
3 Sara Lee Corp.
$921.0
Cakes, pies, cheesecake, dough, pizza crusts
N/A
fast rise in prices, bakPar-baked breads, cookies, Danish, dough, biscuits, muffins,
Ralcorp Frozen
ers have had a hard
10
$800.0 *
4
waffles
Bakery Products (2)
time establishing apDawn Food Products
5
$600.0 *
Dough, cakes, donuts, muffins, desserts
N/A
Inc.
propriate price inPar-baked breads, rolls, cookie dough, pre-baked cookies,
8
6 Aryzta AG (3)
$587.5
creases in regards to
muffins, bagels, pastries
consumers. The bread
7 Schwan Food Co.
$550.0 *
Pies, cakes, desserts
2
Consumer Price Index
Un-baked, par-baked, finished bagels; pies, cookies, muffins,
8 Harlan Bakeries Inc.
$345.0 *
6
(CPI) was 164.8, up
hearth breads
Canada Bread
17% from July 2007,
$335.0 *
Par-baked bread, rolls, bagels
9
9
Frozen Bakery (4)
the first rise in price in
Maplehurst Bakeries
$330.0 *
Cakes, donuts, cookies, breads, pies, sweet goods
3
10
Inc. (5)
over 30 years.
As a rule, baking companies that were weak
when commodity prices
rose have weakened
further and companies
that were strong remain so. For example,
Sara Lee Bakerys unit
volumes in its North
American Retail Bakery
business were up 4.2%
in the fourth quarter.
We have been growing
our overall portfolio,
stated Tim Zimmer,
vice president of Sara
Lee Fresh Bakery.
Sales are up 2% to
2.5% from a pound/volume perspective. It has
been a matter of getting many pieces to
begin working together- the Sara Lee

11 Best Brands Corp.

$280.0 *

Cakes, muffins, brownies, specialty desserts, cookie dough

12 Pennant Foods (6)

$275.0 *

Puff pastry, cookies, croissants, cinnamon rolls, Danish,


muffins, bread dough, mixes

$220.0 *

Cookies, bread & roll dough, biscuits

$200.0 *

Doughs, cakes, muffins, scones, pastries

N/A

$180.0 *

Cookie dough

Breads, rolls

J&J Snack Foods


Corp.
CSM Bakery Supplies
14
North America (7)
Nestle Baking Group
15
(8)
13

16 Flowers Bakeries (9)

$168.7

Bama Companies
Inc.

$150.0 *

Hand-held pies, bisbuits, pizza crust, desserts

18 Hill Country Bakery

$150.0 *

Cakes, muffins, cookies, desserts, sweet goods

$145.0 *

Breads, rolls, cakes, puff pastry, pie shells

N/A

$140.0 *

Garlic bread, rolls, biscuits

N/A

$120.0 *

Cakes, pies, dessert bars

$120.0 *

Cookie, cinnamon rolls

$120.0 *

Breads, rolls

$105.0 *

Desserts

$85.0 *

Breads, rolls, buns

17

Pepperidge Farm
(10)
Lancaster Colony
20
Corp,
19

21 Sweet Street Desserts


Sweet Life Enterprises
(6)
Wenner Bread
23
Products
Heinz U.S.
24
Foodservice (11)
22

25 Alpha Baking Co.

*R&FF estimate
N/A = Not available.
(1) Bakery & foodservice sales plus retail refrigerated, frozen items (2) RalCorp Holdings subsidiary
(3) Reflects Aug. 2008 merger of IAWS Group plc, Hiestand Holding AG (4) Unit of Maple leaf Foods
(5) Unit of Weston Foods, george Weston Ltd. (6) Fresh Start Bakeries subsidiary (7) Unit of CSM nv,
Amsterdam (8) Unit of nestle USA (9) Unit of Flowers Foods Inc. (10) Unit of Campbell Soup Co.
(11) Unit of H.J. Heinz

67

Sales of Cookies and Cookie Bars


(Source: Mintel/ based on IRI's InfoScan Reviews data)

2008 (est.)
($ Millions)

Standard
Health-Oriented
Premium
Private-label
Cookie Bars
Total

% of
2006
Total ($ Millions)

$2,265
56.7%
$555
13.9%
$550
13.8%
$492
12.3%
$130
3.3%
$3,992 100.0%

% of
Total

% Chg.
08 vs 06

$2,304
56.9%
$559
13.8%
$551
13.6%
$481
11.9%
$154
3.8%
$4,048 100.0%

-1.7%
-0.6%
-0.2%
2.3%
-15.0%
-1.4%

brand reaching a large


enough size for the critical
mass needed to secure the
shelf space we are seeking.
From a planning perspective, everything is coming
together.

Interstate Bakeries Corp.


on the other hand has sustained double-digit sales
Note: Data may not equal totals due to rounding.
declines since filing for
bankruptcy in 2004. The
company is currently ranked third, however, if sales continue the way they have they could
easily slip to fifth place. Meanwhile, Flowers Foods achieved record profits in 2007, with
predictions for 2008 positive. The group has been active in its acquisitions, taking over
Phoenix, AZ-based Holsum Bakery and Lakeland, FL-based ButterKrust Bakery. The company
predicts the acquisitions will add about 10% to its annual sales, which reached $2,037 million in 2007. Net income was up 17% and sales were up 8% from 2007. Higher sales and
lower operating costs were not enough to offset high input costs for Grupo Bimbo S.A.B.
The group suffered a second quarter operating loss of $3.5 million. Campbell Soup Co.s
Baking and Snacking division has been weathering the storm, sales were up 11% while operating earnings were down. Weston Foods is also holding its own, operating income rose 29%
to $97.8 million.
CRACKERS MAKE A COMEBACK DESPITE MAJOR OBSTACLES
As the recession continues, consumers are using greater discretion when it comes to purchasing grain-based foods, including crackers. In the 52 weeks ended June 14, 2009, total
cracker dollar sales reached $3.9 billion, up nearly 4% from the same period a year earlier.
Unit sales, however, fell 4% to 1.6 billion, according to Information Resources, Inc. (IRI), reported Milling and Baking News (July 28, 2008). As with other grain-based categories, the
private label sector has fared well. Private label cracker dollar sales were up 19% in the 52
weeks ended June 14, while unit sales jumped 9%. The trend toward private label products
is not expected to change in the near future, according to Store Brands and the Recession,
a consumer research report issued in July by the Private Label Manufacturers Association.
Some 30% of consumers are buying more store brands then they did a year ago, the report
found.
The growth of private label is affecting name brands. Kraft Foods Inc. suffered a 0.77% drop
in dollar sales and 8% decline in unit sales during the period ended June 14. Units of the
companys best-selling brands, Nabisco Ritz, Nabisco Wheat Thins and Nabisco Triscuit fell
3%, 17% and 8%, respectively. Meanwhile, The Keebler Co., a subsidiary of The Kellogg Co.,
generated a 7% year-over-year dollar sales growth despite a narrow 0.46% drop in unit sales
during the period. Keebler experienced strong growth with its Sunshine Cheez-It brand. In
January, the brand rolled out Cheez-It Scrabble Junior crackers. We tested the concept of
Scrabble Jr. licensed property in the form of our Cheez-It crackers with moms, stated
Michael Morrissey, Kellogg spokesperson. They responded very well to it. They liked that
its a fun cheese snack that their kids could enjoy, and that encourages parent-child interaction. The product has done well and is now available nationally.
68

The Kellogg Co., although a relaTop-Selling Cracker Vendors*


tively small player in the cate(Source: Information Resources Inc.)
gory, is also finding success in
% Chg.
% Chg.
Dollar Sales
Unit Sales
the cracker business with prodYr. Ago
Yr. Ago
Kraft Foods Inc.
$1,143,351,000
-0.8%
404,963,900
-7.9%
ucts such as Special K crackers,
Keebler Co.
$767,827,000
6.8%
270,708,100
-0.5%
which launched in December
Pepperidge Farm Co.
$411,750,500
7.0%
178,320,700
0.1%
2008. Campbell Soups PepNonni's Inc.
$60,650,710
3.5%
20,375,620
-5.2%
peridge Farm, Inc. posted a 7%
Stacy's Pita Chip Co.
$58,964,380
26.3%
18,326,320
13.8%
Kellogg
Co.
$46,834,030
20.8%
15,732,480
13.0%
dollar sales growth on a 0.12%
Carr's
$45,378,020
-3.0%
13,425,670
-13.2%
gain in unit sales. The company
Dare Foods Ltd.
$31,135,260
0.7%
10,994,780
-1.1%
continued to benefit from its
Old London
$29,777,780
-1.5%
11,996,630
-7.4%
Goldfish brand, which garnered
Private Label
$130,313,100
19.1%
68,188,600
8.6%
$227.8 million in sales during
* 52 weeks ended June 14, 2009.
the 52-week period ended June
14. In late March, the company launched Goldfish Grahams in honey, chocolate and cinnamon flavors. The new Goldfish line earned the company some $6.8 million in sales since its
debut.
A major challenge for all the top cracker companies came in the form of an early January
2009 recall of peanut butter produced by the Peanut Corporation of America due to a Salmonella outbreak. Dollar sales for peanut butter-filled crackers fell 7% in the 52 weeks
ended June 14, 2009 on a 15% decline in unit sales. Kraft Foods and Lance, Inc. were greatly
affected by the recall, though neither companys products were directly involved with the recall. The industry is beginning to recover from the recall, and Lance, with unit sales down
2% year-over-year, is rebounding faster than most. We have seen a very meaningful rebound in sales since February and we currently anticipate pretty well normal volume levels
for the remainder of the year, according to David Singer, president and CEO of Lance.
SUCCESSFUL PRACTICES OF EIGHT CPG MANUFACTURERS
The CPG industry is mostly composed of a small number of multi-national brands with a
global presence, and a larger number of manufacturers who operate on a local, regional or
national level. Packaged Facts report Top Global Food and Beverage Companies: Strategies
For Success examined some of the largest CPG manufacturers, selecting eight who exemplify their ideal model for success: Nestle, Kellogg, Anheuser-Busch InBev, Wrigley, Kraft,
Heinz, Danone and Coca-Cola. The foremost trait among these companies is a commitment
to innovation and the ability to create products that meet the changing needs of a variety of
consumers. To accomplish this, these companies create brands that can be adapted to consumers on a local or cultural level in different markets, but retain a global iconic image that
is instantly recognizable around the world.
Food and beverage makers must build their brands with layers of tangible and intangible
benefits, including quality, taste and health, but the intangible benefits cultivated by advertising and promotion are equally as useful for establishing a brand, especially one that can
transcend geographical or social borders. Creating brand equity is very important for CPG
manufacturers, as it is considered a key business asset and can drive revenue or profitability. If a brand fosters a positive image or becomes identifiable for its unique characteristics,
it also becomes a commodity that can also be sold to another company if it no longer fits
with other brands in a companys portfolio. It is clear that establishing a brand is vital for increasing business and expanding into new markets. But considering how few food and bev69

erage manufacturers are able to position themselves or their brands globally, understanding
exactly why global giants like Nestle, Coca-Cola and Danone have succeeded offers numerous insights. While the current economic climate makes it enormously difficult to grow internationally, and competition today is fiercer than ever before, these firms continue to
expand throughout the world. Aside from extensive amounts of capital and the supply
needed to meet demand, what distinguishes these company strategies from those that can
not break into international markets?
First, CPG manufacturers must understand that the market has changed significantly within
the last few years, and changes are occurring at such a rapid pace that business models
need to be constantly revised. The CPG industry also is now facing more challenges and
trends driving change than ever before, according to Packaged Facts. Food and beverage
manufacturers must cater to a growing consumer preference for healthier food and beverages and also please stakeholders demanding the company take greater responsibility for
its impact on health, the environment and society. Competition among CPG companies has
also increased to unprecedented levels as continuous innovation sets new standards in mature markets. Internationally, emerging markets represent considerable growth opportunities, though global economic and commodity pricing pressures continue to impact on food
and beverage manufacturers everywhere. In Western economies, food and beverage producers typically operate under low volume growth and low margins, as the pricing influence of
global retail chains cut into manufacturer profits. And although some manufacturers have
decreased package sizes to offset costs, companies need to implement cost-shaving strategies without jeopardizing customer satisfaction and brand confidence.
While the influence of these mega-trends has existed for some time, what is new is how interrelated these mega-trends are, and the reach over numerous markets that they exert. In
particular, health, nutrition and corporate responsibility are all linked, with demands being
made by better-informed and empowered consumers, who expect more and are less engaged by traditional advertising. Company stakeholders also have higher expectations of
food and beverage manufacturers, echoing the same concerns as consumers for the sake of
their own investments. CPG companies must address such concerns to assuage any doubt
over the quality of products purchased or whether a company has enough integrity to remain a good investment.
The largest food and beverage manufacturers have taken note of these demands, as Deloittes Food and Beverage 2012 study found that 79% of the 93 top executives surveyed
claimed health/nutrition as the principle issue driving the industry forward. With the global
obesity epidemic affecting both developed and developing countries, the World Health Organization estimates that 1.5 billion adults aged over 15 are overweight and 400 million are
obese. Such staggering numbers have created new expectations for CPG manufacturers, and
consumers believe that food companies have a responsibility to keep their customers
healthy. The Ketchum study Food 2020: The Consumer As CEO found that of 1,000 consumers surveyed across the U.S., UK, Germany, Argentina and China, 75% would like CPG
manufacturers to create more products that reduce the risk of future major health issues. In
response, some manufacturers adopted self-regulatory strategies, such as Krafts promise
not to advertise unhealthy products to children under 12. But pressure to increase health
and nutrition standards is strong from industry and consumer associations, with Consumers
International calling for government regulation on the food and beverage industry.
The efforts of food manufacturers to answer criticism of their products have had mixed re70

sults. Danones divestiture of its biscuits business and the success of its Activia and Actimel
functional dairy products contributed to one of the strongest growth figures on Interbrands
Best Global Brand List 2008, at 8%. Other brands, like Coca-Cola and Kellogg, have not received the same praise in their own attempts to address consumer health concerns. The
sugar content in Kelloggs cereals also brought the food manufacturer unwanted attention
in 2006, and the food processor cut advertising to children a year later when faced with a
lawsuit. While some of the major food and beverage processors have stumbled in their efforts to rectify poor nutritional practices, to dismiss consumer alarm would be careless.
Strict regulation and adherence to safety standards would do much to prevent litigation and
distinguish one manufacturers devotion to todays problems from anothers token efforts.
Should greater legislation be enacted, the companies better prepared for it will suffer the
pains of mandated regulation much less.
For CPG manufacturers, the importance of innovation for success and longevity is incapable
of being overstated. As competition increases and profit margins shrink, it is a considerable
advantage to be at the forefront of innovation and beyond the efforts of other food and beverage companies. But innovation does not necessarily produce positive sales growth for
companies, at least when it pertains to new brands; Information Resources, Inc.s New Product Pacesetters (2007) found that less than 20% of new brands record revenues in excess of
$50 million. Innovation, when applied to other segments of the value chain such as retail
strategies, sustainable policies and technological changes can reduce costs, increase the
bottom line and better prepare brands for entrance into new markets or market consolidation.
Ultimately, innovation accomplishes little unless it contributes to an already existing brand,
especially a well-established one. So-called blockbuster brands benefit most from innovation, as they are the primary assets driving revenue and determining shareholder value, and
would thus experience the greatest benefits, in terms of scale, of innovative efforts. It
comes as little surprise that companies like Nestle and Mars Wrigley are expanding their research and development resources through acquisitions. On a smaller scale, innovation can
be focused on the premiumization of second- or third-tier brands within a companys portfolio, often through the inclusion of organic or functional ingredients in luxury brands and
products made for developed countries.
But it is the global megabrands that sit at the core
of a companys portfolio,
and are essentially the
lifeblood of any CPG manufacturer, according to
Packaged Facts. Value for
these brands is dependent
on reaching elevated quality
standards and extending
across numerous markets
to meet changing consumer
needs and desires. The
globalization of food distribution outlets and a convergence of consumer income

Top Category Growth In 2008 - Private Label


(Source: ACNielsen's What's Hot Around the Globe)

Category
1 Frozen Fruit
2 Eggs
3 Fresh Fish/Seafood
4 Canned Fruit
5 Frozen Fish/Seafood
6 Canned vegetables
7 Frozen vegetables
Non-Frozen Prepared/
8 Ready Meals
9 Olives/Pickles/Chutneys
10 Meat

Private Label
Category Share
62.6%
59.5%
51.4%
41.8%
39.4%
38.4%
37.9%

Private Label
Category Growth

Category
Growth Rate

16.9%
24.2%
7.2%
0.2%
7.3%
4.7%
8.5%

12.1%
19.0%
12.5%
1.7%

36.9%

6.8%

5.8%

36.0%
34.3%

7.5%
7.2%

3.1%
5.8%

= Manufacturer brands growing faster than private label.

71

5.0%
3.7%
6.5%

levels has allowed food and beverage manufacturers access to greater geographic and demographic markets, but innovation is key to maintaining the inherent quality expected of
a brand from consumers. Among the brands in the study, Coca-Cola adapted its Coke brand
to meet new customer desires for a low-calorie Coke beverage with the introduction of Coke
Zero while Nestle transformed itself into a global multifocal organization, bringing its brand
to localized, specific markets. As Nestle is aware, to be internationally successful, a food
and beverage manufacturer must adapt their brands locally, and balance standardization
with localization. To do this, ingredients, packaging, marketing and distribution may all
need to be adjusted to fit the consumer.
One global trend that has made business more complex and difficult for CPG manufacturers
is the simultaneous globalization and empowerment of grocery retailing, especially in developed markets. Large format stores have come to dominate the retail landscape, as Wal-Mart,
Carrefour and Tesco have all grown and expanded internationally, even into each others
spheres of influence, as is the case of Wal-Mart and Tesco in the western U.S. As retailers
make great strides in differentiating themselves from others and offer more services and
shopping experiences for consumers, they grew stronger and can now use greater influence
in their demands to CPG manufacturers. Along with this influence, the increased prominence of private brands on store shelves puts more pressure on the CPG industry, as retailers are no longer entirely reliant on manufacturers to fill shelves. Partly because of an
economic downturn tightening the purse strings of consumers and partly because of the
greater emphasis on own-brands by
Top Global Food & Alcohol Brands
retailers, food and beverage compa(Source: FI analysis of Business Week's Best Global Brands 2008)
nies must acknowledge private label
2008 Value
products as a serious competitor for
(millions)
Rank Company
Origin
Sector sales.
1
8
26
33
39
56
61
63
64
66
81
83
85
95

Coca-Cola
McDonald's
Pepsi
Budweiser
Kellogg's
Heinz
Wrigley's
Nestle
KFC
Danone
Pizza Hut
Moet & Chandon
Starbucks
Hennessy

$66,667
$31,049
$13,249
$11,438
$9,710
$6,646
$6,105
$5,592
$5,582
$5,408
$4,097
$3,951
$3,879
$3,513

U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
Switz.
U.S.
France
U.S.
France
U.S.
France

Beverages
Restaurants
Beverages
Alcohol
Food
Food
Food
Food
Food
Food
Food
Alcohol
Beverages
Alcohol

Much like the tiered branding of CPG


manufacturers, many private-label
brands offer multiple pricing and
quality levels for consumer needs.
Packaged Facts identifies Tesco as
one of the most successful in this regard, including in its private-label
portfolio Tesco Finest, Tesco Value,
Tesco Healthy Living and Tesco Organic, in addition to standard Tesco
labels. The variety of private-label
products from one retailer alone now
creates competition with CPG manufacturers on numerous tiers. As food and beverage manufacturers are dependent on retailers for a high proportion of sales, retailers and grocers
can use this leverage to demand more from producers; therefore close relationships with retailers are imperative for those in the consumer packaged goods industry.
For the larger food and beverage companies, diminishing profits in developed markets and
the international expansion of competitors necessitates a global presence. The economic
downturn and collapse of entire economies provides an excellent argument for the proliferation of a brand into numerous regions to reduce the impact of recession in certain markets.
Though the finances of the developed world are inseparably linked to the developing world,
declining consumer confidence, greater awareness and expectations in developed markets
72

all contribute to slimming margins there for CPG manufacturers, in addition to the growing
influence of private-label goods. To acquire new revenue sources and lower manufacturing
and service costs, entrance of brands into new global markets is essential, according to
Packaged Facts. Although the recognition of this need is simple, the execution of brand expansion is immensely difficult and time-exhaustive. The major CPG manufacturers studied
achieved brand recognition and a global presence after decades of focused effort, planning
and applied marketing prowess. The companies able to accomplish this did so by delivering
brands with a consistent set of values and pursuing rigorous innovations. Most important,
however, is the creation of a universal appeal for products that are not restricted within national or cultural boundaries.
Fortunately for food and beverage companies, the difference in income levels between developed and developing countries is evaporating, giving CPG manufacturers a larger group
of middle-class consumers to target. Combined with the high portion of food, beverage and
tobacco expenditures as part of total consumer expenditure in countries like India and
China, at 36.5% and 27.3% respectively, the prospects in developing markets are very attractive. Displacing local food producers and established brands is a difficult task for companies
on the outside of markets looking in, but mergers and acquisitions remain a successful
strategy for entering new territories. Not only can mergers remove brand competition or
lend new products the consumer acceptance earned by existing regional brands, they also
allow access to infrastructure and distribution networks.
Truly, the environment for smaller, more regionalized food and beverage manufacturers to
grow is not growing. Even if a CPG manufacturer employs the strategies that have made Anheuser-Busch InBev or Heinz successful, it is not likely that they would be able to compete
on the same level as the multinational giants. But, as a processor operating in a niche market, or growing within an established market, to not recognize the importance of maintaining positive relations with retailers or answering consumer health concerns will only bring
failure more swiftly. And for the numerous companies not mentioned among Packaged
Facts elite eight, it is possible that by recognizing a lucrative market, an unfilled consumer need and the practices that enabled some food and beverage manufacturers to capitalize on opportunities, a producer can begin the process of establishing a long-term
identity in a fresh area.

73

Top Food Processors: Meals & Entrees


(Source: Refrigerated & Frozen Foods' Top 150 Food Processors)

Company

2008 Sales
($ millions)

Product Line

Plants

Nestl USA

$4,000.0 *

Plated and hand-held entrees, pizza, pasta

Schwan Food Co.

$1,300.0 *

Pizza, entrees

Kraft Foods

$1,200.0 *

Pizza, entrees, lunch combinations, meatless entrees

N/A

ConAgra Foods

$900.0 *

Prepared meals, plated & handheld entrees, pot pies,


Mexican entrees

N/A

Gorton's Inc.

$800.0 *

Processed seafood, shrimp entrees

H.J. Heinz

$700.0 *

Entrees, soups, pot pies

N/A

American Seafoods
Group LLC

$650.0 *

Processed seafood, fish entrees

N/A

Pierre Foods Inc.

$643.3

Pinnacle Foods Group


Inc.

$641.1

Sandwiches, pre-cooked meat entrees, breakfast


entrees
Dinners, entrees, pizza, pot pies, breakfast entrees,
seafood

5
3

10 Bellisio Foods Inc.

$600.0 *

Entrees, sandwiches, pizza, chili

11 Kellogg Co.

$550.0 *

Breakfast entrees, meatless entrees, pizza

12 High Liner Foods Inc.

$500.5 *

Prepared seasfood entrees

13 Ruiz Foods

$500.0 *

Mexican entrees

13 Windsor Foods

$375.0 *

Ethnic entrees, chili

15 Sara Lee Corp.

$300.0 *

Breakfast entrees, handheld entrees

16 Little Lady Foods

$265.0 *

Pizza, sandwiches

17 General Mills

$250.0 *

Pizza, breakfast entrees

18 Amy's Kitchen

$240.0

Entrees, pizza, sandwiches, pot pies

19 Overhill Farms

$238.8

Plated meals, entrees, prepared meat entrees, pasta,


soups

$190.0

Pizza

$175.0 *

Prepared entrees, pasta

$165.0 *

Sandwiches, meat entrees, soups

23 Real Mex Foods

$155.0 *

Mexican entrees

24 Unilever US Foods

$150.0 *

Multi-serve dinners, soups

Fairmont Foods of
Minnesota

$150.0 *

Entrees, meal kits, soups

20

Nation Pizza Products


LP (1)

20 Request Foods
22

25

Simeus Foods
International

* R&FF Estimate
(1) Unit of OSI Group LLC.

74

4
N/A

N/A
3
N/A

N/A
1

PRODUCT LAUNCHES

... Despite the recession, manufacturers continue to introduce new offerings, especially new
versions of existing products. New product introductions for 2009 involved healthier versions of existing products, new flavor combinations, beverage introductions, snack and confectionery offerings and baby food products.
SUCCESSFUL NEW PRODUCTS REFLECT INNOVATION, CONSUMER TRENDS
Only approximately 25% of products introduced earn more than $7.5 million in the first year
of production, which qualified them to be on Information Resources Inc.s (IRI) 2008 New
Product Pacesetters report. These successful products reflect the trend that even in a recession, consumers are still looking for the
NEW PRODUCTS BOOST CONAGRAS SALES
occasional indulgence.
ConAgra Foods reported a 6.1% rise in third quarter fiscal 2009 sales, which the company attributed to new
product introductions and improvements on key brands,
such as Banquet and Marie Callender, reported
Brandweek (Mar. 26).

As for the 2009 top 10 list, the products


are all well-known brands from well-known
companies, which state that customers
trust these brands that provide value and
comfort [that] are [also] diversifying their
Healthy Choice Caf Steamers was also one of the top menus through brand extensions. Several
new product launches of 2008, according to market re- of the brands named are diet versions of
search firm IRIs annual New Product Pacesetters report.
existing products, such as Progresso Light
This past summer Alexia Premium Crunchy Snacks, and Pepsi Max, while others are convenience foods, like Healthy Choice Caf
reached full distribution.
Steamers and Hormels Compleats. In the
end, Gatorades G2 sports drink garnered
the top spot of IRIs food and beverage brand list with $159 million of product sold in its
first year. The product took advantage of several promising consumer trends at the beginning of them, explains Beverage Business Insights editor Gerry Khermouch, according to
Brandweek (Mar. 23). It tapped into the burgeoning awareness among consumers of the
high-calorie count even among beverages like Gatorade.
MCCORMICK PREDICTS COMBINATION OF OLD AND NEW FOR FLAVORS IN 2009
McCormick released its Flavor FORECAST for 2009, an annual look into the tastes and
trends that the food processor anticipated would influence American cuisine and restaurant
menus for the year. The forecast emphasizes a nostalgic feeling in the flavors as root beer
and chicken soup, among others, are paired with contemporary tastes and international delicacies. Seeing excitement in the blending of the new and the familiar, McCormick listed
the following top 10 flavor pairings for 2009:
- Toasted Sesame and Root Beer: An iconic soda is rediscovered for its versatility as a
cooking ingredient, paired with the bold nuttiness of toasted sesame seed.
- Cayenne and Tart Cherry: The flavors of two superfoods the heat of cayenne and sweetsour tang of tart cherry pack a multi-layered punch.
- Tarragon and Beetroot: This hip pair creates a sensory feast that is anything other than
predictable or restrained.
- Peppercorn Mlange and Sake: Japans notable rice wine finds a new partner in the quintessentially French unison of multicolored peppercorns.
- Chinese Five Spice and Artisan-cured Pork: Hand crafted artistry merges with a harmonious Asian blend to create an innovative taste sensation.
- Dill and Avocado Oil: Mild avocado oil finds an elegant partner in clean, minty dill re75

flecting the healthy goodness that comes from pure, natural ingredients.
- Rosemary and Fruit Preserves: Fresh-picked fruit flavors fuse with aromatic rosemary for
a progressive interpretation of sweet and savory.
- Garam Masala and Pepitas: A beautifully matched global combination of an intoxicating
spice blend from India and a prized seed popular in Latin America.
- Mint and Quinoa: Nutritious, whole-grain quinoa is taken to new heights when paired with
the exhilarating, cool taste of mint.
- Smoked Paprika and Agave Nectar: Smoky sweetness from the purity of nature celebrates a union of Spanish and Mexican ingredients.
McCormicks Flavor Forecast 2009 is available at http://www.flavorforecast.com, and also
includes recipes and photos for dishes served with the flavor pairings.
BEVERAGE BRANDS STAY AFLOAT VIA MARKETING STRATEGIES
Like most every segment in the food industry, the beverage market is subject to recessionary spending decreases, and 2008 experienced the first volume decline on record. Still, despite the fact that consumers are buying fewer bottled beverages, thousands of products
continue to launch each year, keeping it one of the most competitive categories in the industry. Advertising Age
(June 8) profiled five
Global Food And Drinks Market
brands that are performThe global food and drinks market was worth $3,498 billion in 2007, up
ing well in the category:
3.1% over 2006. The global food and drinks market is anticipated to grow
Bawls Guarana, Owater,
at a CAGR of 3.2% during 2007-10 to reach $3,843 billion in 2010. IncreasMuscle Milk, Sweet Leaf
ing demand for healthy products coupled with rising disposable incomes
in emerging economies is fueling demand for food and drink products, ac- Tea and Zico. These
brands are garnering atcording to MarketResearch.coms: The Top 10 Food and Drinks Ingredient
Companies: Emerging Opportunities, Growth Strategies And Innovation In
tention from larger comThe Leading Players.
panies in the beverage
and bottling market as potential acquisition targets, and their success is largely the result of the marketing strategies
that elevate the brands above the others fighting for market share in a harsh and lean economy.
Bawls Guarana originated as a college class project in 1996 when CEO Hoby Buppert began
his search for an alternative to coffee. Mr. Buppert created a high-caffeine soda using the
Amazonian guarana berry, which contains a form of caffeine almost three times stronger
than the kind used in traditional sodas. In 2008, BevNet named the companys G33K B33R
flavor Energy Drink of the Year.
Bawls Guarana is marketed through sponsorships in three particular communities often
overlooked by marketers: gamers, paintball enthusiasts and the BMX racing world. The beverage was also featured in movies and TV shows, appearing in the film Role Models as well
as HBOs Entourage. Bawls COO Christina Staalstrom describes the companys strategy as
focusing marketing initiatives to the consumer based not on the product, but on the
lifestyle; Support your consumers, and become a part of their culture, Ms. Staalstrom advised.
Tom First, co-founder of Nantucket Nectars, sold that beverage brand but later re-entered
the drinks market in 2004 with Owater, marketed as a healthy sports drink. Owater contains fewer calories than average sports drinks, and is made with no artificial flavors or colors. The brand reported almost $4 million in sales in 2008, and is expected to grow 65% in
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2009.
Mr. First is primarily using radio ads to market Owater, holding conversations with athletes
like Boston Red Sox outfielder Jacoby Ellsbury and the Boston triathlon team, who are also
slated to appear on product labels. Owater is available at Whole Foods Market, Stop & Shop,
Duane Reade and Au Bon Pain.
Muscle Milk started as a family-run operation in 1997 with five staffers and grew to employ
more than 200, largely on word-of-mouth marketing. The brand, which advertises itself as a
functional beverage, was awarded 2008s Beverage of the Year by BevNet. Recently, the
company hired San Francisco advertising agency Pereira & ODell in an attempt to reach beyond the fitness crowd that helped popularize Muscle Milk. Cytosport, which makes the
drink, plans to market the brand as more of a lifestyle drink for busy, on-the-go consumers,
and will increasingly focus on advertising to women. Muscle Milk retails at grocery stores,
Target and in some delis.
Cytosport Marketing VP Nikki Brown believes it is important for beverage manufacturers to
align themselves with a very robust, go-to-market, unified distribution system, which Cytosport did with Pepsi Bottling Group and Pepsi Americas. The company also made taste a
focal point of product development, not only to keep loyal customers pleased, but also to
appeal to a wider audience not entirely attracted by the drinks nutritionally focused advertising.
An early beverage in the natural and organic category, Sweet Leaf Tea was founded in 1998
by Clayton Christopher and David Smith. A $15.6 million investment from Nestle Waters will
bring the brand more into the mainstream, and the brand is expected to grow 50% in 2009
after selling fewer than two million cases in 2008. Sweet Leaf is now distributed to retailers
including Kroger and Safeway.
Sweet Leaf Tea, like Bawls Guarana, promotes itself through nontraditional channels and
plans to establish a marketing presence through sponsorships of popular music festivals
like Lollapalooza and Austin City Limits. The brand is looking to start sponsoring individual
athletes and bands, and is utilizing social media like blogs and Twitter to distinguish themselves from the many other specialty beverage brands presenting a naturalistic image. Sweet
Leaf held sampling events in large cities such as San Francisco, Los Angeles, Chicago and
Boston this past summer.
Natural sports drink Zico was introduced in 2004 by Mark Rampolla, a former Peace Corps
volunteer who was exposed to coconut water while in Central America. Produced in Brazil
with green coconuts, Zicos sales grew 250% each of the previous four years, Mr. Rampolla
claimed.
Zico is available at Whole Foods and natural-food retailers in larger cities, but the first stage
of growth in new markets begins at hot-yoga studios. Once a foothold is established, the
beverage brand focuses on sampling events and blogs centered around fitness. Explaining
Zicos growth strategy, Mr. Rampolla emphasizes the importance of discipline and patience;
while the brand is not profitable yet, the company is investing in growth and in sustained
public relations. Whether building initially on word-of-mouth marketing through yoga parlors and loyal consumers or slowly cultivating a larger brand image through PR campaigns,
Zico is interested in steadily constructing a foundation that will support the brand
TAZO TEA FOUNDER LAUNCHES NEW VENTURE
Tazo Tea founder Steve Smith launched a new venture, Portland, OR-based Smith Teamaker,
an outlet to distribute small batches of loose and ready-to-drink teas, reported
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OregonLive.com (May 14). Mr. Smith sold Tazo Tea to Starbucks in 1999 for a reported $9.1
million, and as co-founder of Stash Tea Co., sold out to Yamamotoyama in 1993. The tea
veteran, after leaving his position at Starbucks and a one-year sabbatical in France launched
the company in September. Mr. Smith believes specializing in small manufactured batches
will help to set the product apart from an already saturated tea market. Creative small
batches are areas where we can stretch, where a tea can go. Of course, before you start
breaking the rules, combining ingredients that may be somewhat unexpected, you also have
to cover the classics. If you want to sell to a great restaurant, hotel or specialty shop, you really have to cover those.
Smith Teamaker also plans on making a foray into the functional tea category. Mr. Smith
plans on drawing from Chinese medicine, eastern European herbals, American Indian traditions and Indian ayurvedic flavor profiles and formulas. The company is hoping to appeal to
early adopters, those that really understand tea as well as customers new to tea. The venture is a made-to-order tea program. Consumers will get a sense of where the product is
coming from, when it was harvested and when it was blended. Regarding launching a new
company amidst a recession, Mr. Smith stated that tea is an affordable luxury and that the
company plans to enter the market small after garnering community support. Ultimately,
my measure of success will be being recognized as an innovative player that, when placed in
the proper channels with the proper demographics in mind, makes money for the people
who handle it, whether thats a restaurant or retail shop, like Dean And Deluca.
CONFECTIONERY INDUSTRY POSTS 3.7% YEAR-OVER-YEAR GAIN: REPORT
The confectionery industry posted a 3.7% gain for the 52-week period ending Apr. 19, 2009
according to the National Confectioners Association (NCA). Candy, chocolate and gum continued to lead the snack category in sales. Overall, the industry ranked No. 3 in food sales.
Premium chocolate sales rose 28% in 2008, its fourth year of double-digit growth; dark
chocolate sales increased 12%. Sugar-free gum posted a 10% sales increase during 2009.
Licorice sales grew 7% over the same time period and gummies and chewy (non-chocolate)
candy increased 10.7%, according to NCAand Information Resources, Inc. data.
Some 3,345 confectionery products were introduced in 2008, including some 1,873 chocolate products, according to Datamonitor. About 1,291 non-chocolate products were released
and 181 new gums came out. About 3,121 snack, cookie and cracker products debuted
over the past year, among them cookies (777), crackers (228), potato chips (434), popcorn
(127), nuts and seeds (307), cereal bars (430) and other snacks, including pretzels, puffed
snacks, fruit snacks and meat snacks (818).
Leading product trends in 2009/2010 will include super fruits and exotic origins, classic
remix, sweet sophistication, super sour and flavor-full, red carpet chocolate, flavor flash
back and holiday hot spot.
NEW CHOCOLATE PURCHASING PATTERNS SWEET NEWS FOR HERSHEY
While supermarket sales in the premium chocolate category in the fourth quarter of 2008
were flat versus last year, noted Hersheys chief executive David West, Hershey Co.s fourth
quarter profit (up 51%) and sales growth suggests the demand for chocolate remains strong,
reported The Wall Street Journal (Jan. 28). However, the demand is for lower-priced chocolates. Consumers are trading down when it comes to chocolates, just as they are doing in
other areas such as eating out and coffee, amid the slumping economy.
Consumers already traded down to Hersheys lower-priced Reeses Peanut Butter Cups, Hersheys chocolate bars and Kit Kat wafers, stated Mr. West. Also, the Pennsylvania-based
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chocolate maker noticed an increase in sales at discount retailers and convenience stores as
gasoline prices fell.
Sales gains from Hershey bars and other core products were partially offset by a decline in
sales of Hersheys Kisses. The brand suffered from an abundance of Kisses varieties, noted
Mr. West. Currently, the company is scaling back the number of products and launching
new ads.
Retailers will probably devote less shelf space to premium chocolates, according to Mr.
West, who noted manufacturers have been making premium chocolates faster than consumers have been buying them.
Although Hershey is also a player in the premium chocolate segment, it was slow to come
on board. In 2008, Hershey was struggling to keep pace with rival Mars Inc., which captured market share with its upscale Dove dark-chocolate candies. Hershey responded last
year with its Bliss chocolates, and teamed up with Starbucks Corp. to develop a line of premium chocolates is flavors such as caramel macchiato and Madagascar vanilla bean.
Some high-end chocolatiers similarly noticed changes in spending patterns. Katrina Markoff,
president and founder of Chicago-based Vosges Haut-Chocolat, reported slower sales in the
fourth quarter in 2008. Consumers are not splurging on offerings that cost $100 and up,
but sales of products in the $25 to $50 range are growing, added Ms. Markoff.
Lindt & Sprungliag, the Swiss chocolate maker of premium Lindt chocolates, posted a 5.8%
sales increase in 2008, but stated it was at the low end of its long-term goal of 6% to 8% annual sales growth.
Meanwhile, Jim Goldsan, chief executive of Yildiz Holdings Godiva Chocolatier Inc, expects
sales to grow. One of our best-selling products this holiday season was the Ultimate Collection, a $130 offering of the best of Godiva truffles, chocolate and biscuits, stated Mr.
Goldsan. Lower-priced items also sold well during the winter holidays, added the executive,
while projecting strong Valentine sales.
NEW BABY FOOD PRODUCTS DESIGNED TO ATTRACT MOMS LONGER
Food industry insiders estimate that baby foods and formulas generate around $5 billion in
annual sales, and that supermarkets account for 50% of baby formula and 60% of baby food
sales, according to Groceryheadquarters.com (Jan. 1). Everyone knows that young moms
are a high-value customer, stated Ken Kotkin, director of business analytics and category
management for Nestle Infant Nutrition, maker of Good Start, Gerber and Graduate brands.
Lengthening the time children eat baby food is one way to secure heavier trips for our grocery partners.
Nestle Infant Nutrition continues to expand into what company officials call up-age food
products. The Graduate brand, which was created specifically for toddlers, grew 14% to 15%
year-over-year for the past five years, estimates Mr. Kotkin. Beech-Nuts Lets Grow! line was
also designed for toddlers with the intention of keeping moms in the baby aisle longer. Our
research shows that the introduction of Lets Grow! attracts additional shoppers, which will
spur additional sales for retailers, stated Christoph Rudolf, president of Hero North America/Beech-Nut. Thats our strategy for Lets Grow!not to substitute sales, but grow the
overall category.
In addition to the Graduate line, Nestle Infant Nutrition is expanding its nutritional beverage
strategy with the launch of healthier versions of existing nutritional beverages. The new
beverage products include an expansion of dairy offerings and yogurt drinks. Products that
include omega-3 DHA also drive the category, according to Rick Klauser, Nestle Infant Nutri79

tions vice president of marketing. With the knowledge that moms are continuously looking
for nutritious and convenient foods, Beech-Nut also created its Beech-Nut Advanced Nutrition platform.
New moms may find it difficult to determine exactly what food is right for their baby, which
can enhance the communication and shopability at the retail level, resulting in greater sales
volume. In an effort to help consumers and drive sales, Nestle Infant Nutrition created what
it terms an integrated eating system, which encompasses its foods from birth to 48 months.
The system features product iconography and color-coding throughout the companys entire portfolio and provides important information on-package that will help moms understand what stage their child is in as well as which products should be served to their babies.
As part of Beech-Nuts plan to strengthen its consumer message, the company rolled out a
packaging and labeling update intended to strengthen their all-natural and nutrition-based
products. Like Nestle, the plan includes product color-coding. Beech-Nuts color-coding corresponds to the fruits and vegetables, meats and cereals on the USDA food pyramid. Callouts on infant stage products intended to create greater segmentation are included as well.
ENTRES
Entre products introduced in 2009 reflected the greater market trend toward healthier
and convenience-oriented products. Food processors continued to focus on offering meals
with both convenience and price in mind.
Nestle U.S.A. launched Hot Pockets Ultimate, individually wrapped sandwiches that are 50%
larger than a regular Hot Pockets sandwich. Hot Pockets Ultimate sandwiches, featuring
meats and cheeses wrapped in a cheese flavored crust, are available in Pepperoni Pizza and
Ham and Cheese flavors.
Palermo Villa, Inc., Milwaukee, rolled out Breakfast Pizza, marking its debut in the frozen
breakfast category. Breakfast Pizza has a rising crust, cheddar cheese sauce and scrambled
eggs, bacon and Italian sausage.
Bernardi, the Italian food division of Windsor Foods, Houston, unveiled two Grand-i-Olis flavors, Breaded 5-Cheese and Shrimp Scampi, extending the stuffed pasta line to six products.
Seapak Shrimp Co., St. Simons Island, GA, introduced Culinary Classics, a line of fish filets,
and Tilapia Tenders, whole, hand-cut and lightly battered tilapia fillets.
Ruiz Foods, Dinuba, CA, introduced Tornados by El Montereyflour tortilla rolled in a crispy
seasoned batter and stuffed with savory meats and real cheese to retail grocers. The convenience-oriented product, which can be prepared by microwaving, pan frying, deep frying
or in a conventional oven, is available in six flavors: Ranchero Beef & Cheese Tornados,
Grilled Chicken & Cheese Tornados, Chicken Club Tornados, Southwest Chicken Tornados,
Cheesy Pepper Jack Tornados and Cheesy Pepperoni Tornados.
Kahiki Foods, Ohio, introduced a line of all-natural Tempura white meat chicken in four flavors: General Tsos, Sweet and Sour, Crispy Honey and Mandarin Orange. The Tempura
chicken products include sauce packets for dipping.
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Nestles Lean Cuisine brand is out with two new Caf ClassicsBeef Chow Fun and SunDried Tomato Pesto Chicken, and two new One Dish FavoritesPasta Romano with Bacon
and Linguine Carbonara.
CONDIMENTS/SAUCES/FLAVORS/ETC.
New flavors, natural ingredients and classic favorites dominated the condiments and
sauces product launches in 2009.
Resers Fine Foods, Beaverton, OR, rolled out a six-item premium dip line under the Stonemill Kitchens brand, featuring varieties such as Artichoke & Jalapeno, Three Cheese Peperoncini and Cajun Seafood.
Rudolph Foods, Inc., Lima, OH, teamed up with The Original Louisiana Hot sauce brand to
introduce a crunchy snack, Louisiana Hot OnYums.
Land O Lakes, Inc. introduced Land OLakes Butter with Olive Oil, an all-natural product
with 50% less cholesterol, 0g trans fat per serving, and 45% less saturated fat than traditional butter.
H.J. Heinz Company is out with Lea & Perrins Thick Classic Worcestershire Sauce.
JUICE/FUNCTIONAL DRINKS
The juice and functional beverage market has always been dominated by better-for-you
health claims. In 2009 smoothies, low-calorie beverages and probiotics dominated the category. The launches tapped into consumers desire for healthier, more natural ingredients.
Odwalla Inc., a California-based subsidiary of The Coca-Cola Co., is out with two reducedcalorie beverages in two varieties, Mojito Mambo and Pomegranate Strawberry. Both beverages feature Truvia, the reduced-calorie brand sweetener derived from the stevia plant.
Old Orchard Brands, Sparta, MI, entered into a licensing agreement with Chiquita to produce
frozen fruit smoothie concentrates. The Chiquita Frozen Fruit Smoothies are available in recyclable 12-oz. plastic cans, which provide three, 8-oz. servings when blended with ice and
water. Each smoothie serving reportedly contains at least one-half cup of fruit and 100% of
the recommended dietary allowance of Vitamin C. The line includes flavors such as Strawberry Banana, Banana Colada, Peach Mango and Mixed Berry.
Sunny Delight Beverages Co., Cincinnati, rolled out out SunnyD Smoothies in two flavors:
Orange Whirl and Strawberry Swirl. SunnyD Smoothies, touted as providing kids with as
much calcium and vitamin D per serving as milk, are available in 48-oz. bottles.
Nestle Healthcare Nutrition unveiled BOOST Kid Essentials Nutritionally Complete Drink in
chocolate, vanilla and strawberry flavors. The product, providing probiotics through a
straw, along with 25 vitamins and minerals, seven grams of protein, antioxidants and 244
calories, comes in a spill-resistant and easy-to-grip package.
DAIRY
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Dairy dessert launches in 2009 were marked by brand name product extensions. Manufacturers offered new flavor combinations and gourmet ingredients to entice consumers
back to the segment.
Starbucks Coffee Co. and Unilever launched a new super-premium ice cream line, featuring
five flavors including: Caramel Macchiato, Mocha Frappuccino, Java Chip Frappuccino and
Coffee.
Haagen-Dazs introduced the Haagen-Dazs Five Series, ice creams that are made with five ingredients that have one-third the fat of its regular ice cream. The flavors are Brown Sugar,
Coffee, Ginger, Milk Chocolate, Mint, Passion Fruit and Vanilla Bean.
Happy & Healthy Products, Inc., Boca Raton, FL, is out with a new Fruitfull bar in a Horchata
variety. The dairy-based stick novelty is reminiscent of its namesake Mexican beverage that
combines rice milk with cinnamon.
The Ghirardelli Chocolate Co., San Francisco, introduced Ghirardelli Luxe Milk, a milk chocolate collection in five flavors: Luxe Milk, Luxe Milk Hazelnut, Luxe Milk Almond, Luxe Milk
Crisp and Luxe Milk Duet.
BEVERAGES
Soft drink introductions in 2009 included more natural and new flavored offerings. The
coffee and tea segment introduced creative combinations, organics and upscale offerings.
Sports, energy and enhanced water highlighted new formulations for enhanced energy and
catering to those with special needs.
SOFT DRINKS
PepsiCo, Purchase, NY, introduced three new products, Pepsi Natural, Pepsi Throwback and
Mountain Dew Throwback, all sweetened with natural sugar.
Meanwhile, Hydrive Energy, LLC, Rye, NYDiet Mountain Dew expanded with mixed berryflavored Diet Mountain Dew UltraViolet. This launch marks the first time PepsiCo is introducing a Diet Dew-only line extension.
TEA/COFFEE
Peets Coffee & Tea, Inc. introduced Peets bottled iced teas, crafted from green, oolong,
white and black teas, in six varieties: Jade Green Lime, Little Dragon Peach, Moroccan Mint
Green, Snow Leopard with Honey, Summer House Citrus and Summer House Classic.
NBI Juiceworks introduced Sun Shower organic Super Blend coffee and tea drinks in five flavors: Mocha Cappuccino, Chocolate Raspberry Frappe, Iced Coffee, Green Tea Latte and
Chai Tea Latte. Each 9.5-oz. bottle of Sun Shower Organic Super Blends is described as containing only 170 calories, no added sugar, no preservatives, low sodium and fortified with
the Lifeguard Protection nutritional package.
S&D Coffee, Concord, NC, introduced a Perfect Iced Coffee line. The line is available in
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vanilla, mocha, hazelnut, caramel, unsweetened Vanilla, and original flavors.


SPORTS/ENERGY/ENHANCED WATER
Gatorade Company introduced the limited edition Jordan series of Gatorade Thirst
Quencher. The new offerings include Championship Blue (Berry Cherry Blend) and Championship Gold (Citrus Orange Blend) flavors.
Diabetica Research Solutions, Inc., Boca Raton, FL, introduced the DRSI Restore! Energy formula, intended for diabetics and pre-diabetics.
Dr Pepper Snapple Group rolled out HYDRIVE Energy Drinks and HYDRIVE Energy Chews in
the majority of its U.S. distribution locations.
Monster Energy launched Nitrous Monster, an energy drink that features nitrous oxide gas
technology, in three varieties: Killer-B, Super Dry and Anti-Gravity. Nitrous Monster is packaged in the resealable 12-oz. Rexam SLEEK Cap Can.
SNACKS
Snacks took note of consumers busy lives and seemingly constant need for energy and
introduced products promising health-benefits, stamina and low-calorie options. Other introductions included, healthy snack packs for consumers who want to eat healthy on-the-go,
brand-new flavor combinations and alternate varieties.
Appleboost Products, Inc., Churbusco, NY, introduced AppleBoost energy snacks into the
mainstream market. The energy snacks were developed for athletes and distributed to the
U.S. Olympic team in the summer. The snacks, in mango peach and wildberry flavors, come
in squeezable and freezable 32-gram packaging and are 30 calories each.
Kellogg Co., Battle Creek, MI, launched Kelloggs FiberPlus Antioxidants bars in Chocolate
Chip and Dark Chocolate Almond varieties. In addition, Kellogg is out with Special K Crackerscontaining 90 calories and eight grams of whole grains per 17 crackersin two flavors,
Italian Tomato & Herb and Multi-Grain.
Vitalicious Inc., New York, expanded its line of VitaTops muffin tops with a Banana Nut variety in June.
Advanced Food Products LLC, New Holland, PA-based division of Bongrain Cheese USA, entered into a licensing agreement with Jelly Belly Candy Co., Fairfield, CA, to produce Jelly
Belly Pudding Snacks in six varieties, including: Bubble Gum, Green Apple, Blueberry, Peach
and Watermelon. The puddings, which are being rolled out in Wal-Mart stores nationwide,
are fortified with calcium, fiber (in the form of inulin) and omega-3 fatty acid DHA.
Pepperidge Farm, Inc., the Norwalk, CT-based subsidiary of The Campbell Soup Co., extended its Goldfish line with Goldfish Grahams in three flavors: Honey, Chocolate and Cinnamon.
FRUITS/NUTS
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Blue Diamond Growers, Sacramento, CA, is targeting industrial customers with the addition
of four new flavors to its oil-roasted line of almonds- fire roasted tomato salsa, Kansas City
Barbeque, Hickory Smoked and Teriyaki- for us as ingredients in snack, nut and trail mixes.
Germack Pistachio Co., Detroit, added Castachio Nuts, a combination of whole cashews and
shelled pistachios, roasted and lighted salted, to its lineup.
Lifestyle Foods, Inc., York, PA, launched the Awake snack and Essential snack. The Awake
snack combines apple slices, red seedless grapes, a granola bar and a healthy trail mix with
nuts, seeds and dried fruit. The Essential snack includes a mini honey wheat bagel, lite
cream cheese, whole hard boiled egg, apple slices and red seedless grapes.
BAKERY/CHIPS
Ellison Bakery Inc., Fort Wayne, IN, launched a nine-variety line of soft, premium cookies:
molasses, date filled, rocky road, raspberry filled, apple raisin, soft chocolate chip, oatmeal,
oatmeal raisin and classic sugar.
Marinela USA, Forth Worth, TX, introduced a line of 100 Calorie snack cakes and cookies:
Choco Roles, Pinguinos, Gransito, Strawberry Sponch! And Triki-Trakes. Marinela is produced by Bimbo Bakeries USA, a division of Mexicos Grupo Bimbo.
Natural Snacks, LLC, Adison, IL, extended its offerings with Michael Seasons Baked Multigrain Chips in three varieties: Original, Cheddar and Honey Chipotle.
YOGURT/CHEESE
Yogurt and cheese products that touted functional and beauty benefits were dominant in
2009. Gourmet flavor offerings also made a showing.
Beauty foods, though most popular in Asia, are experiencing rapid growth in the U.S. Dannon is leading the way in this category with its Light & Fit Crave Control yogurt made with
fruit cereal, fiber and protein.
General Mills, Minneapolis, introduced two new additions to the Yoplait Light Thick &
Creamy lineCherry Cobbler and Cinnamon Roll.
Cultured dairy products captured a major share of the functional foods category, as the
Mintel Global New Products Database reports that spoonable yogurt was the second most
active category among all U.S. functional foods in 2007.
Omega-3 enhanced products became the most visible and influential cultured dairy products. Last year, Breyers and Blue Bunny launched omega-3 yogurts in the U.S., while Yoplait
also introduced omega-3 yogurt products, both spoonable and drinkable.
YoCream International, Inc., Portland, OR, Alouette brand eliminated all artificial flavors, colors and preservatives from its line of soft spreadable cheeses. It offers nine new varieties of
all-natural spreadable cheeses: garlic & herbs, light garlic & herbs, spinach artichoke, sundried tomato & basil, savory vegetable, creamy onion & shallot, peppercorn parmesan, light
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cucumber dill and berries and cream.


GRANOLA/BREAKFAST BARS/CEREAL
As with most new products in 2009, the Granola/Cereal category was dominated by allnatural, healthy, fortified foods.
Kozy Shack Inc., Hicksville, NY, introduced an all-natural, ready-to-eat multigrain cereal line
with low fat milk. Ready Grains, made with a variety of whole grains, come in Strawberry,
Maple Brown Sugar, Original and Apple & Cinnamon varieties.
Vroom Foods, Inc., Costa Mesa, CA, introduced Buzz Bites Mint Chocolate Energy Chews,
containing caffeine, ginseng, taurine and B vitamins.
Quaker Oats, a Chicago-based unit of PepsiCo Inc., launched Quaker True Delights Granola
Bars, combining real fruit, whole nuts and dark chocolate mixed into honey-drizzled Quaker
Oats. The bars are available in three varieties: Toasted Coconut Banana Macadamia Nut,
Dark Chocolate Raspberry Almond and Honey Roasted Cashew Mixed Berry.
B&G Foods, Inc., Parsippany, NJ, introduced Cream of Wheat Healthy Grain Instant Hot Cereal, which is available in Original and Maple Brown Sugar varieties. The new Healthy Grain
products, made from 100% whole grain, are cholesterol free, low-fat and contain zero grams
of sugar, with the Maple Brown Sugar variety being sweetened with Splenda.
CONFECTIONERY
Artsianal offerings and remakes of old favorites were the highlights of the confectionery
category for 2009.
Just Born, Inc., Bethlehem, PA, added a chocolate mousse flavored bunny to its PEEPS brand
marshmallow candies. Orange chicks and green bunnies were added to the spring PEEPS
line.
Seattle Chocolate Co. will unveiled an artisan line of fresh cream ganache chocolate truffles
in September. Truffles are available in eight varieties: Cherry Praline, Salt Water Caramel,
Magma 65 Dark, Crme 40 Milk, Pura Vida Coffee, Savory Hazelnut, Crme Burlee and
Limoncello.
MARS Snackfood US, Hackettstown, NJ, expanded its DOVE chocolate portfolio with DOVE
Silky Smooth Milk Chocolate with Peanut Butter, in bags and single bars.
The Hershey Co. introduced Reeses Dark Chocolate Peanut Butter Cups, available in two-cup
packages, six-packs and Reeses Miniatures Dark Chocolate Peanut Butter Cups.
NATURAL/ORGANIC FOODS
Organic and natural foods continued to spread across categories in 2009. Despite the recession, product launches continued to expand and become mainstream.
Decas Botanical Synergies, LLC, a Carver, MA-based subsidiary of Decas Cranberry Products,
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Inc. introduced a new addition to the Fruticeuticals line, BluCrans, touted as a healthy fruit
snack bursting with antioxidants. Cape Cod cranberries, naturally high in antioxidants, are
supercharged with extra potent blueberry, which lends the added antioxidant power of blueberry anthocyanins.
Starfish, a subsidiary of Pacific Seafood Group, based in Mukilteo, WA, rolled out a new line
of all-natural and gluten-free crispy battered wild harvested seafood products in halibut, cod
and haddock offerings.
Turtle Island Foods, Hood River, OR, expanded its marinated, organic tempeh strips with
three new flavorsSesame Garlic, Lemon Pepper and Coconut Curry.
Peter Rabbit Organics Ltd., London, brought Peter Rabbit Organics fruit pouches to the U.S.
this past spring. The organic fruit pouches, with no added sugar, salt or artificial ingredients, are designed for babies and young children. No straws or spoons are required; youngsters can eat the organic fruit right from the squeezable pouch. Also, it features a
choke-free cap. There are three kid-friendly fruit combinations: Apple and Grape, Strawberry
and Banana and Mango, Banana and Orange.
Hilton Soy Foods, Canada, launched Soybutter, a peanut-free peanut butter replacement. It
does not contain any added colors, flavors or preservatives.

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PRIVATE LABEL

... In 2009, private label products grew in popularity due to increases in available products
and in correlation with the depressed economy. Nearly two-thirds of shoppers buy private
label over name brands, according to Information Resources, Inc.s Private Label 2009: Understanding and Mitigating Private Label Threat. Consumers have cultivated the desire for
value and quality at a lower price.
PRIVATE LABEL POPULARITY INCREASES
U.S. shoppers spent $81 billion on store brand items in 2008, marking a 10% increase in
sales in 2007, reported Whole Foods Magazine (June). Over half of shoppers (62%) state
store brands are as good in quality as name brands, with 35% willing to pay as much or
more for a high-quality store brand. Private label retailing, while not a new concept, has finally come into its own, stated Douglas Preston, president of Preston Private Label Products.
A factor giving the segment tread is the transformation to a quasi name brand. This involves enticing consumers with products that are competitive with brand names in areas
that go beyond price. Retailers have masterfully shifted the consumer consciousness from
generic to private label, from no brand to store brand. This category now implies a strong
consumer value: high quality and low price. Store brands are as thoughtfully packaged as
their branded counterparts, with the quality backed by integrity of the retailer, stated Karl
S. Halpert, president and CEO of Private Label Select Ltd. Co.
Store brands can add to stores individuality, offering something new and different. This can
be especially true of younger shoppers who have begun to identify more with niche brands
than mass brands, distinguishing themselves as unique and individualistic, stated Mr. Preston.

Private Label Sales In Supermarkets:


Private Label Dollar Volume - 2008
(PLMA's 2009 Private Label Yearbook/The Nielsen Company)

Total Private Label


Total Brands
Total Channel

2008 Dollar
Sales

2007 Dollar
Sales

(in billions)

(in billions)

$53.8
$241.2
$295.0

$49.2
$237.9
$287.1

%
Change
9.4%
1.4%
2.8%

Private Label Unit Volume - 2008


(PLMA's 2009 Private Label Yearbook/The Nielsen Company)

Total Private Label


Total Brands
Total Channel

2008 Unit
Volume

2007 Unit
Volume

(in billions)

(in billions)

26.1
91.3
117.5
87

25.7
95.4
121.1

%
Change
1.6%
-4.3%
-3.0%

Private Label Sales In Supermarkets:


Dollar & Unit Share By Department, 2008
(PLMA's 2009 Private Label Yearbook/The Nielsen Company)

Department
Dry Grocery
Frozen Food
Dairy
Deli
Packaged Meat
Fresh Meat
Fresh Produce
Alcoholic Beverages
Total Food
Non-Foods Grocery
General Merchandise
Health and Beauty Aids

Net Share Point All Brands Dollar


Net Share Point
Private Label 2008
Private Label
Change 2008 vs.
Volume (in
Change 2008 vs.
Dollar Share
2008 Unit Share
2007
billions)
2007
14.8%
1.0
$129.9
19.3%
0.9
20.1%
1.2
$29.5
21.6%
1.2
40.7%
1.5
$41.2
41.0%
1.4
27.1%
0.7
$5.7
19.2%
0.2
13.6%
0.2
$10.1
14.9%
0.3
30.0%
1.0
$1.6
28.9%
0.5
17.0%
1.9
$13.8
16.3%
1.5
0.6%
0.0
$16.8
0.8%
0.0
19.2%
1.1
$248.4
22.5%
1.0
15.0%
8.5%
11.0%

0.7
0.6
0.8

$26.6
$6.0
$13.9

24.1%
13.4%
14.8%

1.0
0.6
0.8

All Brands Unit


Volume (in
billions)
64.8
10.3
17.3
1.8
3.6
364.4*
5.5
1.9
105.6
7.1
1.7
3.1

IRI EXPLORES CURRENT AND EMERGING PRIVATE LABEL TRENDS


Consumer behaviors have changed dramatically over the last few years. Despite signs of
economic improvement, consumers remain in savings mode. This attitude change increased
the popularity and sales of private label products, according to Information Resources, Inc.s
(IRI) Times And Trends: Private Label 2009: Game Changing Economy Taking Private Label
To New Heights report. Over the years, retailers polished their private label offerings in
terms of differentiation. The timing of these efforts was scrupulous and in consequence private label was elevated to a new level. Private labels share of spending is the highest in the
grocery channel; however, dollar and drug retailers are also seeing positive growth. Private
labels in many categories are able to compete on quality and price and retailers continue to
increase their offerings. For example, Kroger increased its brands over three tiers: private
brands (premium tier), banner brands (mid-tier) and value brands (value tier). However, private label sales are concentrated among a small segment of the population, with heavy buyers accounting for 62% of sales. Private label categories, which represent 17% of CPG
categories, account for 69% of sales. The top 50 national brands represent less than half of
total dollar sales. Even heavy private label buyers only devote 22% of their CPG budget to
store brands. Innovation and affordability-focused brand positioning strategies can be used
to mitigate penetration gains.
Innovation and promotional support is increasing in the sector and indications are that recession-induced changes will remain long after the economy stabilizes and sees improvement. Retailers increasingly refined strategies should attract a larger and more diverse
shopper base. Manufacturers and retailers with an inside understanding will be able to develop and implement strategies successful within corporate goals and consumer needs. This
is the time for retail-based brands to excel and for national brands to increase competitive
efforts.
Current competition for CPG spending is intense. The average private label discount versus
88

national brand is 30%, but the average price gap varies across departments. Manufacturers
should invest to identify optimal price gap versus private labels by testing price changes
prior to and after rollouts and supporting price strategies with value-oriented promotions.
PRIVATE LABEL GROWTH AREAS: IRI
About 78% of both lower and higher-income consumers believe private labels are typically of
excellent quality, according to Information Resources, Inc.s Private Label 2009: Understanding and Mitigating Private Label Threat. During the first half of 2009, private label unit
share rose in five of six departments, led by fresh/ perishables and followed by healthcare
and frozen foods. Dollar share increased in 13 of 15 categories. At the forefront was natural
cheese, butter and canned vegetables, followed by refrigerated fresh eggs, milk and frozen
seafood. Developing categories include peanut butter and cookies. Growth is slow amongst
coffee creamer, frozen seafood and refrigerated meat categories.
Regionally, grocery channel private label share is highest in the West at 25.2% and lowest in
the Northeast at 19.2%. As for individual markets Wichita, KS leads in unit sales at 33.3% in
2008 and New York City had the lowest with 14.2%. Consumers across all income levels and
age groups agree that variety is a strong factor when purchasing private label. About 65%
prefer stores with high private label variety, up five points from 2007. This change indicates
that retailers should think about variety in terms of products and packaging within a category, while manufacturers should think of ways to expand consumer expectations when it
comes to choice.
Drug Chains:
Private Label Dollar Share

Supermarkets:
Private Label Dollar Share
(Private Label Manufacturers Association, 2009 Yearbook)

16.5%

17.1%

18.2%

2006

2007

2008

(Private Label Manufacturers Association, 2009 Yearbook)

11.7%

12.2%

2006

2007

Supermarkets:
Private Label Unit Share

2006

21.2%

2007

(Private Label Manufacturers Association, 2008 Yearbook)

13.2%

15.2%

15.6%

16.6%

2008

2006

2007

2008

Drug Chains:
Private Label Unit Share

(Private Label Manufacturers Association, 2009 Yearbook)

21.3%

Combined Channels*:
Private Label Dollar Share

Combined Channels*:
Private Label Unit Share

(Private Label Manufacturers Association, 2009 Yearbook)

(Private Label Manufacturers Association, 2008 Yearbook)

22.3%

2008

13.5%

14.1%

15.2%

2006

2007

2008

* Consists of supermarkets, drug chains and mass merchandisers (excluding Wal-Mart), with additional reporting from Nielsen Household Panel Services.

89

20.2%

20.0%

20.8%

20.2%

20.0%

20.80%

Regional Shares
of Private Label Products
(PLMA's 2009 Private Label Yearbook/The Nielsen Company)

Supermarkets
New England
East North Central
East South Central
West North Central
West South Central
Middle Atalantic
South Atlantic
Mountain
Pacific

Drug Chains
New England
East North Central
East South Central
West North Central
West South Central
Middle Atalantic
South Atlantic
Mountain
Pacific

Combined Channels*
New England
East North Central
East South Central
West North Central
West South Central
Middle Atalantic
South Atlantic
Mountain
Pacific

Dollar Share
2008
2007
17.0%
15.8%
18.3%
17.1%
21.5%
20.0%
16.8%
15.6%
19.6%
19.0%
15.3%
14.5%
18.3%
17.1%
21.4%
20.1%
18.4%
17.3%

Chge.
(Pts.)
1.3
1.3
1.6
1.2
0.6
0.7
1.3
1.2
1.1

Unit Share
2008
2007
20.4%
19.2%
22.3%
21.3%
26.2%
24.8%
21.4%
20.5%
25.5%
24.6%
18.7%
18.2%
22.1%
20.8%
25.8%
24.6%
21.4%
20.5%

Chge.
(Pts.)
1.2
1.1
1.4
0.9
1.0
0.5
1.3
1.2
1.0

Dollar Share

Chge.

Unit Share

Chge.

2008
13.1%
14.9%
12.4%
24.2%
21.9%
11.2%
14.0%
12.7%
12.3%

2007
11.9%
13.9%
11.7%
20.4%
21.6%
10.4%
12.8%
12.1%
11.3%

Dollar Share
2008
16.2%
17.1%
20.1%
15.5%
18.1%
14.3%
17.3%
19.4%
16.7%

2007
15.0%
16.0%
18.7%
14.4%
17.5%
13.7%
16.1%
18.3%
15.7%

(Pts.)
1.2
1.0
0.6
3.8
0.3
0.8
1.2
0.6
1.0

2008
15.1%
17.2%
13.9%
26.2%
23.2%
12.5%
15.9%
15.5%
14.5%

Chge.
(Pts.)
1.2
1.2
1.4
1.1
0.5
0.7
1.2
1.1
1.0

Unit Share
2008
19.7%
21.2%
24.8%
20.0%
24.0%
17.8%
21.1%
24.2%
20.1%

* Consists of supermarkets, drug chains and mass merchandisers (excluding Wal-Mart).

90

2007
14.0%
16.2%
13.3%
22.6%
22.8%
11.7%
14.8%
14.7%
13.4%

2007
18.5%
20.2%
23.6%
19.1%
23.2%
17.3%
19.9%
23.2%
19.2%

(Pts.)
1.2
1
0.6
3.6
0.4
0.8
1.1
0.8
1
Chge.
(Pts.)
1.2
1.0
1.2
0.8
0.8
0.5
1.2
1.1
0.9

Private Label Sales In Supermarkets:


Top 10 Dollar Gains In Private Label, 2008
(PLMA's 2009 Private Label Yearbook/The Nielsen Company)

Dollar
Volume
% Gain
51.4%
33.3%
31.8%
28.4%
27.3%
25.2%
23.9%
22.3%
21.0%
20.8%

Flour
Pasta
Shortening/Oil
Baby Food
Dry Vegetables & Grains
Frozen Breakfast Foods
Salad Dressing, Mayonnaise & Toppings
Frozen Pizza & Snacks
Cheese
Housewares & Appliances

Dollar
Volume
(Millions)
$120.2
$359.4
$744.4
$31.1
$305.6
$204.5
$309.8
$337.4
$3.8 *
$16.3

Dollar
Share
21.3%
23.0%
33.5%
1.0%
30.8%
14.8%
11.4%
9.4%
36.4%
4.3%

Minimum Private Label Category Size $1MM


* In Billions

Top 10 Unit Gains In Private Label, 2008


(PLMA's 2009 Private Label Yearbook/The Nielsen Company)

Unit
Volume
% Gain
28.2%
19.4%
17.0%
15.1%
14.3%
13.3%
12.2%
11.7%
11.3%
9.9%

Baby Food
Wine
Flour
Pet Food
Personal Soap & Bath Needs
Frozen Breakfast Foods
Frozen Pizza & Snacks
Gum
Fresh Produce
Ice Cream

Unit
Volume
(Millions)
12.6
4.7
61.6
328.2
28.9
100.4
145.1
3.0
902.2
362.8

Unit
Share
1.4%
0.7%
26.0%
13.3%
8.3%
19.6%
12.1%
0.5%
16.3%
30.9%

Minimum Private Label Category Size 1MM

Private Label Sales In Supermarkets:


Top 5 Private Label Categories by Unit Volume, 2008
(PLMA's 2009 Private Label Yearbook/The Nielsen Company)

1.2
Fresh Eggs

1.4
Cheese

1.7
Canned Vegetables

2.2
Bread & Baked Goods

2.7
Milk

91

Private Label Sales In Supermarkets:


Five Year Unit Volume Sales Trends
(PLMA's 2009 Private Label Yearbook/The Nielsen Company)

117.5

127.0

126.0

123.3

121.1

Private Label
Total Channel

26.1

25.7

2008

2007

26.9

26.3

2006

(in billions)

26.8

2005

2004

Private Label Sales In Supermarkets:


Five Year Market Share Trends in Dollars and Units
(PLMA's 2009 Private Label Yearbook/The Nielsen Company)

22.3%
21.4%

21.3%

21.2%

21.1%

18.2%
17.1%

16.5%

16.5%

16.5%

Dollars
Units

2008

2007

2006

2005
92

2004

ECONOMY CAUSING CONSUMERS TO CHANGE SHOPPING HABITS


U.S. consumers are changing their supermarket shopping habits and are shifting towards an
increase in private label purchases, according to a nationwide poll conducted by GFK Custom Research North America for the Private Label Manufacturers Association. According to
Store Brands and The Recession, more than 30% of consumers are buying more store brand
products compared to 2008, and about 23% expect to buy more private label in 2010.
Nearly 75% of consumers state the current economic conditions are an important factor in
deciding to buy more private label items. Moreover, one out of three claim the economy is a
very important overall purchasing factor.
The number of consumers that buy private label products frequently increased to 55%
from 41% in 2006 and 12% in 1991. This ties in with the fact that more than 77% believe
store brands are as good as, if not better than, national brands. This trend was shared
across all income levels and regional demographics. In addition, consumers are looking beyond traditional supermarket concepts to do their shopping, about 59%, a drop of 11% from
2006. The survey also found that 67% of respondents go to two or more stores to do their
main grocery shopping; reasons include lower prices and variety. In addition, 50% of respondents expect to prepare and eat more meals at home. Looking ahead to the future, almost
half claim they expect to do much of the same for the rest of 2009.

Regional Combined Channels*


Private Label Dollar & Unit Volume
(PLMA's 2009 Private Label Yearbook/The Nielsen Company)
Dollar Volume (billions)
Region
2008
South Atlantic
Total Private Label
Total Brands
Pacific
Total Private Label
Total Brands
East North Central
Total Private Label
Total Brands
Middle Atlantic
Total Private Label
Total Brands
West South Central
Total Private Label
Total Brands
Mountain
Total Private Label
Total Brands
West North Central
Total Private Label
Total Brands
East South Central
Total Private Label
Total Brands
New England
Total Private Label
Total Brands

2007

% Change 2008
vs. 2007

Unit Volume (billions)


2008

2007

% Change
2008 vs. 2007

$12.7

$11.4

11.2%

$5.6

$5.4

3.9%

$60.6

$59.4

2.0%

$21.0

$21.7

-3.3%

$10.2

$9.4

8.8%

$4.1

$4.0

2.1%

$50.9

$50.3

1.1%

$16.4

$17.0

-3.5%

$9.8

$9.0

9.8%

$4.6

$4.5

1.7%

$47.6

$47.2

0.9%

$17.1

$17.9

-4.3%

$7.5

$6.9

8.9%

$3.4

$3.4

1.2%

$44.6

$43.3

2.8%

$15.9

$16.3

-2.5%

$6.5

$6.0

8.5%

$3.5

$3.4

1.8%

$29.3

$28.1

4.5%

$10.9

$11.2

-2.6%

$5.2

$4.8

8.4%

$2.4

$2.4

2.2%

$21.6

$21.4

0.9%

$7.5

$7.8

-3.6%

$3.8

$3.5

9.3%

$1.8

$1.9

-0.3%

$20.8

$20.7

0.4%

$7.4

$7.8

-5.3%

$3.7

$3.3

9.9%

$1.8

$1.8

0.6%

$14.6

$14.5

0.6%

$5.6

$5.9

-5.7%

$3.6

$3.2

10.9%

$1.6

$1.5

3.9%

$18.5

$18.3

1.1%

$6.5

$6.8

-3.8%

* Consists of supermarkets, drug chains and mass merchandisers (excluding Wal-Mart).

93

SURVEY: FOOD PRICES AFFECT CHOICES


The current economy has forced consumers to change their longstanding patterns of eating
out and buying food and beverages in retail stores. It is likely that these new, frugal behaviors will be carried throughout a consumers lifetime, according to the National Grocers Association/SupermarketGuru 2009 Consumer Panel Survey.
American consumers expect food retailers to satisfy them more in areas of price/cost savings, service and assortments with special attention on healthful, locally grown foods. With
most households spending $96 or more each week on groceries, stores that help them save
with little compromise will gain a vital edge and help reinforce a long-term relationship.
Some 84% of survey respondents claim to buy the majority of their food in supermarkets.
Mass merchandiser stores attract 7% and clubs 3%. The three lowest income tiers made up
the highest numbers of respondents who stated that they primarily shop in supermarkets:
15% in the $25,001-$45,000 tier, 14% in the $45,001-$65,000 tier and 11% in the $25,000
or less tier. These same three income groups posted higher in their share of primary mass
shoppers for food: 23% in the $25,001-$45,000 tier, 20% in the $45,001-$65,000 tier and
18% in the $25,000 or less tier. Bargain hunters from the $105,001-$125,000 tier came in
fourth at 6%. A year ago, 84% of respondents cited supermarkets, 6% mass and 3% specialty
food stores and clubs as their primary food sources.
Low prices have risen significantly as a consumer concern from 2008. Some 52% of respondents claim that low prices are very important, while another 45% claim it is somewhat important. At the same time in 2008, 45% of respondents thought price was very important.
More than one in four consumers shop at a primary food
Private Label Sales In Supermarkets:
store despite being dissatisfied
Top 20 Private Label Categories
by prices. Only 22% of conby Unit Volume, 2008
sumers feel their primary food
(PLMA's 2009 Private Label Yearbook/The Nielsen Company)
store offers excellent low prices.
Unit Volume
Nearly six in 10 (58%) respondents claim that sales and
money-saving specials are very
important, while 35% claim sales
and money-saving specials are
somewhat important. Some 97%
of consumers feel that accurate
pricing on shelf displays is important. The economy has intensified interest in private label
products. Seven in 10 consumers
(69%) feel that private label
brands are important when deciding where to shop, in comparison with 62% last year. Ninety
percent feel that their primary
grocery store has a good or excellent stock of private label
products.

Category

1 Milk
2 Bread & Baked Goods
3 Canned Vegetables
4 Cheese
5 Fresh Eggs
6 Paper Products
7 Fresh Produce
8 Carbonated Beverages
9 Frozen Vegetables
10 Bottled Water
11 Yogurt
12 Condiments, Gravies & Sauces
13 Packaged Meat
Cottage Cheese, Sour Cream &
14 Toppings
15 Soup
16 Shelf Stable Juice Drinks
17 Cereal
18 Canned Fruit
19 Snacks
20 Ice Cream
* In Millions

94

(billions)

2.7
2.2
1.7
1.4
1.2
1.0
137.0
632.0
715.2
695.4
669.9
571.0
541.4

*
*
*
*
*
*
*

425.9
424.7
414.2
397.3
388.6
388.4
362.8

*
*
*
*
*
*
*

... In response to consumer trends, retailers are offering more private label products than
ever before. Whether products are being introduced or extended, consumer sentiment has
been noted.
RETAILERS EXPAND PRIVATE LABEL OFFERINGS
More stores are increasing their private label offerings in response to heightened consumer
demand, according to a study from Clear Seas Research, reported Private Label Buyer.
About 91% of retailers surveyed in May 2009[stated] they intend to expand their private
label offerings over the next several years. The largest group 42% - reported plans to increase own brand penetration more than five points. Customer loyalty, differentiation from
competitors and higher margins were all listed as reasons for retailers to enhance their
product lines, while the best opportunities, according to the article, will be found in shortterm growth in center store, refrigerated/frozen, natural/organic and upscale/gourmet departments.
Retailers favor a balanced approach in terms of growth, as the majority stated that an
amalgamation of three types of programs (national brand equivalent, value/economy and
upscale/premium) would provide the optimal likelihood of success. Who should bear the
brunt of the financial responsibility of the program, meanwhile, was a hotly contended
issue, with 48% claiming the supplier should take the majority and 45% stating the burden
should be shared, while only 7% thought the retailer alone should be impacted. Some 44%
of retailers cited pricing as the biggest challenge in the private label retailer-supplier relationship, followed by lack of innovation and lack of packaging options. The report also
found that most retailers (60%) currently use 25 or fewer manufacturers to supply their private label program, while 34% manufacture some or all of their own private label products.
The private label sector as a whole grew 9.3% in 2008, as compared to 4.5% for branded
food sales, and may grow 8.1% more by the end of year, according to Mintel-GNPD. In 2009,
1,800 new U.S. private label foods appear on retail shelves: 27% of all food products introduced this year. In 2005, private label food comprised only 13% of new food product
launches. Private label products have evolved over the past few years, going from no-label
brand-name alternatives to staying current with recent food trends. Premium ingredients
used in quality in-home meals will be key to keep consumers coming back, such as SUPERVALUs Culinary Circle
brand, which includes
Pork Carnitas Enchilada
Private Label Sales In Supermarkets:
Casse role and WalPrivate Label Dollar Share - 2008
Marts Sams Choice
(PLMA's
2009 Private Label Yearbook/The Nielsen Company)
brand thin crust pizza.
As more consumers
2008
2007
% Change
are eating at home and
Total Private Label
18.2%
17.1%
1.1%
bring lunch from
Total Brands
81.8%
82.9%
-1.1%
home, supermarkets
Total Channel
100.0%
100.0%
portable lunches are
another area that can
Private Label Unit Share - 2008
be developed, such as
(PLMA's 2009 Private Label Yearbook/The Nielsen Company)
Safeways Rice Noodle
Soup Bowl. And while
2008
2007
% Change
convenience continues
Total Private Label
22.3%
21.2%
1.0%
to be a main driver in
Total Brands
77.7%
78.8%
-1.0%
consumer food attiTotal Channel
100.0%
100.0%
tudes, health and nutri95

tion is slowly gaining as well. Lucerne Foods Eating Right brand spans multiple meals, including whole-wheat mini ravioli, apple cinnamon granola and light ice cream cups. Retailers no longer only launch me-too products to compete against major national brands,
explains Mintel senior analyst Krista Faron. Instead, private labels are hotbeds of creativity,
driving markets and establishing themselves as trend leaders.
CONSUMERS TURNING TO VALUE AND PREMIUM BRANDS
Consumers are gravitating towards value brands as a way to save money, but they are also
increasing their purchases of premium brands, according to Information Resources, Inc.s
(IRI) Times & Trends Report: The Value/Dichotomy: Growth at Both Ends of the Spectrum.
However, mid-tier brands are lagging behind. On a unit sales basis, value brands grew over
2% in 2009 over 2008, while premium brands sales decreased just over 1% and mid-tier
brands declined by almost 3%.
Several consumer trends united to create this dichotomy. One such trend is the move towards trading down. Consumers are putting aside loyalty to their traditional brands and opting for value brands instead, with both retailers private brands and economy brands from
national brand manufacturers. However, consumers are still interested in premium brands,
through what IRI calls sophisticated splurging. Premium brands are still being bought but
are being purchased at value stores. Premium sales increased the most at dollar stores, supercenters and Walmart, while reducing at grocery, drug, mass merchandise and club
stores.
In addition to this trend, retailers increased the sophistication of their private label offerings. Many offer high-end brands that offer a premium experience at a cost lower than premium national brands. However, premium brand sales are increasing due to consumers
concerns with health and wellness. For example, although bottled water unit sales decreased by 3% over the last year, premium bottled water unit sales rose 11%, driven by products like Glaceaus VitaminWater. Similarly, yogurt sales remained flat over the last year,
while premium yogurt sales rose 34%.
Consumers regarded as living comfortably increased premium brand spending by 2.4%
and those getting by heightened spending by 2.1%. Meanwhile, spending among the
doing well segment, which accounts for single-member households earning more than
$35,000 and two or more member households earning more than $55,000, dropped 1.4%.
Another trend is that consumers are trading dining out for maintaining other indulgences,
which includes confections. Of the top 10 items where brand preference is preferred to
price as the most important influence, chocolate candy was No. 1, as well as cookies and ice
cream/sherbet.
Manufacturers and retailers looking to increase and drive growth in both value and premium
brands should consider identifying new growth opportunities through shopper insights.
This can be done by continually monitoring economic, demographic and social shifts in
order to anticipate emerging trends. Tracking share shifts at the market and store levels
and across important income and consumer segments on a monthly basis is also helpful.
Another tip is to assess purchase trends across important categories and brands to determine pricing, promotion and distribution implications.
Manufacturers should also align strategies with altering shopping patterns. This can be
done by investing in product, merchandising and packaging innovation across key categories and brands. Working with retail partners to identify and improve product assortment
is also beneficial. Another tactic for both retailers and manufacturers is to measure and
monitor program impacts by tracking share shifts before and after changes in advertising,
96

pricing and promotion.


Retailers should also work with manufacturers to identify optimal assortment at the store
level. They should try to drive incremental purchases with cross-merchandising and crossmarketing programs, creating tie-ins and solutions-based programs when applicable. In addition, retailers should try redefining pricing strategies to ensure relevance and impact
through the new lens of affordability. This also means placing lower thresholds on quantity discounts, smaller pack sizes and lower price points. Continually monitoring actual versus projected sales growth cumulatively, across consumer segments and trip missions, is
also helpful.
PRIVATE LABEL ICE CREAM SEGMENT
GROWING IN SIZE, POPULARITY
As more consumers are buying private label food items because of the economic downturn,
more food companies are following that trend by putting their products into private label
form. Ice cream, once mostly brand names, is experiencing a growth phase to include
many private labels as well, according to Dairy Foods (January). Almost contrast to the
growth of private is the entire ice cream segment. Dollar sales across the main ice cream
sub-category was virtually flat through Nov. 2, 2008 while unit sales receded about 3%.
Overall, both ice cream-sherbet and novelties garnered sales gains in the 13 weeks ended
Sept. 28, 2008.
In 2005, private label ice cream items only took almost 18% of the market share. Private
label now enjoys 24% of
the total dollar share,
Top Brands of Novelties
which is up almost 12%.
(Source: Dairy Foods)
As these private labels
grow and take up more
room, a rising number of
brand names must share
Klondike
$118M in Sales
a smaller space, and
-5.33%
many top brands are in
decline. There could be
Popsicle
Private Label
several reasons to the
$95M in Sales
$348M in Sales
sudden uptick, between
-5.40%
+5.08%
the economy, consumer
price sensitivity or simply
better private label products.
The Skinny Cow
$122M in Sales
+24.78%

Dreyer's/Edy's
$130M in Sales
+61.42%

Weight Watchers
$177M in Sales
+15.32%

Nestle Drumstick
$140M in Sales
+0.35%
97

At the same time, there


were some brand name
novelties that experienced a gain in the 52
weeks ended Nov. 2,
2008, both in unit and
dollar sales.
Dreyers/Edys dollar
sales rose more than
61%, even though the
brand is still a relatively

new entrant in this category.


Weight Watchers, Nestle Drumstick and The Skinny Cow also observed dollar sale gain, although Klondike and Popsicle dropped slightly.
... As more retailers join the private label fray, the share of sales becomes more competitive.
Retailers and manufacturers are attempting to employ promotion and discount offers to entice customers to their products.
BATTLE FOR MARKET SHARE BETWEEN CPG COMPANIES, RETAILERS HEATS UP
The battle for market share between retailers touting private label offerings and consumer
packaged goods (CPG) manufacturers is continuing. Seeking sales and market share, retailers are utilizing tactics including giving away their own private label brands to consumers
purchasing branded foods and offering coupons to promote higher purchasing rates of private label offerings. Retailers are also continuing to go public with sentiments that consumer packaged goods companies should lower prices and continue to do so. To counter
these happenings, CPG companies are invoking their names in advertising campaigns and
introducing more lower-priced products.
Publix offered shoppers who purchased Kelloggs Special K Red Berries cereal, Special K cereal bars and Quaker raisin, date and walnut cereal the Publix-brand equivalents free, reported Supermarket News (May 29). The weeklong deal, which ended June 2, 2009 was

Private Label Sales In Supermarkets:


Top 10 Dollar Volume Gains in Private Label, 2008
(PLMA's 2009 Private Label Yearbook/The Nielsen Company)
25.3%

Gum

17.0%

Personal Soap and Bath Needs

16.6%

Non-Carbonated Soft Drinks

15.9%

Grooming Aids

14.8%

Frozen Prepared Foods

14.6%

Housewares Appliances

11.9%

Cookware
Deli Dressings, Salads & Prepared
Foods

9.1%
8.1%

Skin Care Preparations

Shaving Needs

6.3%
98

limited to one per customer. Were so confident


youll like Publix brand products, well let you
try ours for free, the company wrote in its circular. Food Lion gave private label purchasers with
store loyalty cards coupons ranging from $1 for
the purchase of four items to $10 for the purchase of 10 through June 23, 2009 according to
Supermarket News (May 28). The coupons expire two weeks from the date issued.

PRIVATE LABELS ARE POPULAR IN


INTERNATIONAL MARKETS
In the developed parts of the world, the recession
prompted many consumers to purchase private label
products and frequent hard discounters, according
to revised forecasts from Canadean.
Specifically, the UK has one of the most advanced
private label markets in the world (valued at around
$100 billion), according to the USDA Foreign Agricultural Service Gain Report, United Kingdom Retail Food
Sector UK Retail Market Brief 2008. The UKs major
supermarket chains dominate the private label market and on average 40%-50% of products in their
stores are private label. They give UK retailers the
opportunity to diversify their product ranges and develop new revenue streams. The extreme of UK private label grocery shopping can be witnessed by
visiting a Marks and Spencer (M&S) food hall. Ninetynine percent of what M&S sells is own label goods.

In a conference call in 2009 with investors,


Costco executive vice president and CFO
Richard A. Galanti emphasized that CPG manufacturers are starting to reduce prices, possibly
in reaction to rising private-label sales. The
branded companies are not passing all the savings back yet, but were starting to see them do
so, which is the right thing to do and its great
for consumers, stated Mr. Galanti, reported Supermarket News (May 29). Mr. Galanti suggested the CPG actions may be in response to the 300-basis-point increases Costco
registered in private label penetration relative to brands during the current fiscal year - increases Mr. Galanti pegged at 10% to 15%, compared with normal increases of 0.50% to
0.75%. That increased penetration of private label is equal to the decline in the sale of
those branded items, noted Mr. Galanti.

CPG companies are retaliating in various ways. For example, Conagra overtly used its name
in its advertising for the first time as part of its Food You Love campaign. The company
has an acute interest in promoting itself, as all of the companys sales are from branded
packaged food products, with about two-thirds from sales to retail customers. In 1998, 24%
of ConAgras sales were derived from branded food, 51% were from fresh meat and other
commodities and the rest from items including flour and spices, reported The Associated
Press (June 1). The adverting campaigns main targets are investors and retailers, not consumers, as they are already sold on brands including Egg Beaters and Orville Redenbacher,
according to CEO Gary Rodkin. The campaign is important, noted Christopher Shanahan, a
research analyst with Frost & Sullivan. Retailers want strong national brands. They produce
a lot of private label products but they want products in their stores that have a lot of marketing dollars behind it, stated Mr. Shanahan.
Meanwhile, Procter & Gamble Co. (P&G) increased its offerings of lower-priced products.
Outlining P&Gs strategies to improve sales in a difficult economic climate, chief executive
A.G. Lafley stated that every business at P&G is working to reach more consumers by widening the price range of its products, reported The Wall Street Journal (May 29).
SAFEWAYS PRIVATE LABEL BRANDS AGGRESSIVELY EXPANDING
GLOBALLY TO OTHER CHAINS
Two of Safeways private label brands, O Organics and Eating Right, boosted their presence
internationally as well as domestically. O Organics, featuring over 300 products in 30-plus
categories, and Eating Right, with over 225 products in 20-plus categories, made their
debut at ShopRite and Exito supermarket chains in South Africa and Columbia, respectively.
Currently, the lines are sold in seven countries: Taiwan, Hong Kong, Singapore, Mexico,
99

Chile, the Philippines and Saudi Arabia.


With global demand for organic and better-for-you foods rapidly expanding, we are
thrilled at the opportunity to reach consumers on a worldwide scale, stated Alex Petrov,
president of Lucerne Foods Inc., a Safeway subsidiary. Through our easily implementable
store-wide solution with expansive product portfolios and ability to meet the order volume
of the largest supermarket chains, we can help retailers fulfill this fast-growing demand by
delivering the highest quality options to everyone, everywhere.
Domestically, Albertsons LLC introduced the O Organics lineranging from baby food to
dairy, beverages, snacks and full meal optionsin its stores. Privately-owned Albertsons
operates nearly 250 stores in Arizona, Arkansas, Colorado, Florida, Louisiana, New Mexico
and Texas. Price Chopper, with 117 stores in six Northeastern states, unveiled the betterfor-you Eating Right brand at its stores. Hy-Vee, Inc., operator of 225 stores in seven Midwestern states, also launched the Eating Right brandfeaturing products such as frozen
entrees, cereal soups, pasta and salad dressingsat its stores.
Growing from O Organics 2005 launch and Eating Rights 2007 debut in Safeway stores,
the brands are now available in over 3,000 retail stores.
Private-label sales grew industrywide by 9.1% to $84.8 billion from last year, according to
March sales figures from the Nielsen Co., reported The Wall Street Journal (May 7, 2009).
During that same time, national brands rose just 1.7% to $421 billion.

Top 5 Most Valuable Global Brands


(Source: Brandz Top 100 Most Valuable Global Brands)

Rank

Company

Coca-Cola

2009 Brand Value in millions


$67,625

% Change from 2008


16%

McDonald's

$66,575

34.0%

21

Tesco

$22,938

-1.0%

44

Pepsi

$14,966

-3.0%

47

Carrefour

$14,961

-1.0%

WALMART: A LESSON IN CONTINUOUS IMPROVEMENT


Walmarts current and past successes rely on its ever-present expansion efforts and focus
on delivering low prices, such as its Everyday Low Price promotion. However, the companys success stems from a finer distinction than just low prices, according to Information
Resources Inc.s Times & Trends Report: Walmart Stores, Helping Consumers Navigate a
Transforming Economy. Walmart doubled its private label strategy, with its Great Value
brand encompassing over 100 categories. The brand, along with the companys other private label brands, account for 25% of dollar sales. The company learned how to understand
shopper attitudes and behaviors and remake its value proposition to meet customers evolving needs. Walmarts strategies also force other retailers to meet its standards.
100

LOBLAW REINVENTS NO NAME, PRESIDENTS CHOICE BRANDS


Nine years ago, Loblaw successfully launched its private label Presidents Choice rising crust
pizza, only to be overtaken when McCains released its own version of the product. In an effort to gain market share with its private label products, Loblaw switched the rising crust
pizza to its lower-price No Name private label and lowered the price by a dollar, according
to The Globe and Mail (Mar. 20). The No Name pizza was then given prominent display
space in stores and sales began to rebound. We werent differentiating our product, in the
eyes of the consumer, stated Paul Uys, a senior vice president at Loblaw Cos. Ltd. Slowly
but surely Kraft and McCain came in and took the business away from us. The consumer
didnt see that Presidents Choice was a very different product.
Rising crust pizza is but one of the private label products that Loblaw is attempting to
repackage and differentiate in a bid to draw bargain hunting consumers during the current
economic downturn. To lure customers, the company wants their offerings to stand apart
from national brands and will sharpen the distinctions between its No Name and Presidents
Choice products.
In recent years, the grocers sales generated by private-label products have grown about 1%
a year. Prices for private label goods are as much as 50% lower than name brands, while the
products gross margins can be as much as 10% to 12% higher than national brands, according to industry insiders.
Loblaw is aiming to generate 30% of its sales from private label products by the end of
2011, compared with about 25% presently. To achieve its targets, the company is working
with former Loblaw executive Dave Nichol, who helped develop the stores No Name and
Presidents Choice brands. In this economy, its probably easier to steal your competitors
customers than at any other time, Mr. Nichols stated. The consumer is willing to switch
supermarkets if you give them a real reason why they should change. Its probably a oncein-a-lifetime opportunity.
To make the Presidents Choice line stand out on store shelves, Loblaw is repackaging the
line in white, so the consumer sees seas of white, according to Mr. Uys. The No Name line
is returning to yellow packaging, so that shelves resemble a sea of yellow.
BEST U.S. RETAIL BRANDS OF 2009
INTERBRANDDESIGNFORUM recently compiled The Best U.S. Retail Brands of 2009, basing
its information and rankings using public marketing and financial data.
WalMart (No. 1): With a brand value of $129.8 billion, Walmart is the largest mass retailer in
North America and is making significant rebranding efforts, including a new logo and
tagline. The company is working to make brand touchpoints clear and relevant, including
store environment, product mix and sustainability. On average, customers are staying 14
minutes longer per trip to Walmart stores. The company is also striving to be entirely supplied by renewable energy and is partnering with sustainability suppliers to facilitate the creation of green jobs.
Target (No. 4): With a brand value of $17.1 billion, Targets iconic bullseye is recognized by
96% of Americans and the company claims a disproportionate share of affluent shoppers
under 45. The brand spends nearly $1 billion a year on advertising, more than its major
competitor Walmart. Target ranks 14th on BusinessWeeks list of 119 Best Places to launch a
career and scores high on the American Consumer Satisfaction Index. The company also
recognizes the importance of its environmental footprint, and four of its Chicago stores
have green roofs.
101

CVS (No. 5): With a brand value of $12.6 billion, CVS is a competitor in both the pharmacy
and supermarket categories. Its acquisition of Longs substantially increases its presence,
and allows for greater control of the Hawaii and Southern California markets. Despite the
economic downturn, CVS maintained consistent same-store sales growth and revenue
growth for the first 26 weeks of 2008. More than 65% of front-end sales use the stores loyalty card. In addition, private label makes up about 15% of front-end sales, a reflection of
both the downturn and the companys brand strategy.
Walgreens (No. 7): With a brand value of $11.1 billion, Walgreens has a greater number of
stores than its competitor CVS. Some 139.1 million Americans live within two miles of one
of its stores. The company merged with Option Care, enabling it to offer in-store nurse practitioners. Walgreens employs an internal brand police to protect and evaluate the quality
and standard of its product offerings so that brand equities will not become diluted. Walgreens excels at offering a variety of formats to meet the needs of each community, such as
smaller footprints in high-density markets. Drive-thru pharmacies, 24-hour druggists and
online services accommodate all customer types and needs.
Sams Club (No. 9): With a brand value of $9.5 billion, Sams Club is second in market share
to Costco in the warehouse clubs category. Its branded value is higher than that of Costcos
due to its niche with the small business market. Membership fees account for the majority
of Sams income. The company has made an effort to increase membership loyalty, for example, by allowing college memberships. It has employed few new merchandise-mix strategies despite the growing demand across retail for private labels. The company must focus
on its target segment and creating a better shopping experience.
Costco (No. 15): With a brand value of $5.7 billion, Costco is the warehouse club market
leader by revenue. The company focuses on a high-income consumer, but the companys
primary attention is on being a low-price provider and investing in the success of its popular
Kirkland private label. The retailer enjoys high consumer satisfaction scores in a Colloquy
survey, whose metrics are a mix of quality, low-price and experience. Membership prices account for approximately 75% of revenue. Costco has 518 stores in 39 states. It has not
changed its store format, but expanded offerings into banking, pharmacy, gas and refreshed its online services.
Whole Foods Market (No. 47): With a brand value of $496 million, the brands success is
born of its skills as a retailer. Decomposable shopping bags, value tours where customers
learn to shop the store on a budget, organic and value private labels and Whole Foods commitment to helping local and global food economies make it a leading innovator in the category. Some $45 million in corporate support is in place for the remodeling and rebranding
of the Wild Oats acquisition. Whole Foods has the highest quality, but the weakest customer
loyalty in the industry, perhaps due to its prices being beyond what many shoppers can afford.
... While slow economic growth and recovery is good for the industry as a whole, the change
could prove detrimental to private labels. Factors involved in the change are an increase in
consumer confidence and more importantly a slow down in the surge of price increases.
PRIVATE LABEL GROWTH SLOWING
Sales of private label products, though still growing, are tapering off due to signs of an economic recovery on the horizon, price increases abating and consumer confidence on the
rise, according to analysts. The private label sector lost a 0.8 unit share point in the food,
drug and mass channels during the four weeks ended Apr. 18, 2009 compared to the same
102

period a year ago, according to The Nielsen Co.,


reported Brandweek (June 6).

PRIVATEL LABEL DOLLAR AND UNIT SHARE DIP

Although nearly 80% of consumers in 2008 indicated


Further, in a research note published May 29,
positive attitudes towards private label compared to
J.P. Morgan food analyst Terry Bivens stated that
73% in 2007, dollar and unit shares remain below
private-label share gains, while up on a year25%.
over-year basis in most categories, remains relatively steady rather than growing quickly as
they had in the past. Additionally, Heinz CEO Bill Johnson noted in the companys fourthquarter earnings call that private labels growth, while still a major concern, does appear to
be easing somewhat, albeit at higher sustained share levels.

Though consumer confidence is greatly affected by the economywhich is perceived to be


on course for a reboundEdward Jones food analyst Matt Arnold stated, At the moment,
the economic and financial factors that enable consumers to trade up are still off the
table. However, Mr. Arnold added, there is a bit less of a rampant mind-set where the consumers wallets are completely shut. Its gotten a lot better in terms of people trading down
at all costs.
Mr. Arnold, who also analyzes the performance of Costco and Wal-Mart, stated that in actuality, private label sales are still performing well (despite Wal-Marts first-quarter net sales
being down 0.6%). Wal-Mart is, in fact, currently expanding its Great Value private line. Two
to four months ago, there was this concern that private labels threat was going to keep
going on and on, stated Christopher Growe of investment banking firm Stifel Nicolaus. The
fact that private label growth is slowing so quickly is actually a good thing, Mr. Growe
added.
However, food analyst Alexia Howard, who covers Kraft, Campbell Soup Co. and Hersheys
at Sanford C. Bernstein, posed another theory: Private labels uptick has no direct correlation with economic circumstances, though consumers may be more prone to purchase store
brands in times of financial duress. Instead, much of private labels gains stem from sticker
shock to rapid and sudden food price increases. With price growth slowing down, many
economically stressed consumers are now returning to branded goods.

Private Label Sales In Supermarkets:


Five Year Market Share Trends in Dollars and Units
(PLMA's 2009 Private Label Yearbook/The Nielsen Company)

Dollars
Units

2008
18.2%
22.3%

2007
17.1%
21.2%

2006
16.5%
21.3%

103

2005
16.5%
21.4%

2004
16.5%
21.1%

Private Label Sales In Supermarkets:


Five Year Dollar Volume Sales Trends
(PLMA's 2009 Private Label Yearbook/The Nielsen Company)

$295.0

$287.1
$277.2

$272.9

$267.1

Private Label
Total Channel

(in billions)
$53.8

$49.2

2008

$45.6

2007

$45.0

2006

$44.1

2005

2004

Private Label Sales In Supermarkets:


Top 20 Private Label Categories
by Dollar Volume, 2008
(PLMA's 2009 Private Label Yearbook/The Nielsen Company)

Dollar Volume
(billions)

Category
1 Milk
2 Bread & Baked Goods
3 Cheese
4 Fresh Eggs
5 Fresh Produce
6 Paper Products
7
8
9
10
11
12
13
14

$7.7
$3.9
$3.8
$2.5
$2.3
$2.0
$1.5
$1.4
$1.3
$1.2
$1.1
$1.1
$999.2
$868.0

*
*

$855.2

Shelf Stable Juice Drinks

$852.4

Carbonated Beverages
Wrapping Materials & Bags
Shortening & Oil
Butter & Margarine

$794.7
$786.0
$744.4
$732.0

*
*
*
*
*

Deli Dressings, Salads & Prepared Foods

Packaged Meat
Frozen Unprepared Meat & Seafood
Frozen Vegetables
Canned Vegetables
Ice Cream
Bottled Water
Cereal
Cottage Cheese, Sour Cream &
15 Toppings

16
17
18
19
20

* In Millions

104

Private Label Sales In Drug Chains:


Top 10 Dollar Volume Gains in Private Label, 2009
(PLMA's 2009 Private Label Yearbook/The Nielsen Company)

Dollar Volume % Dollar Volume


Dollar Share
Gain
(in millions)
Frozen Prepared Foods
Jams, Jellies, & Spreads
Frozen Desserts, Fruits & Toppings
Bread & Baked Goods
Children's Cologne
Baby Food
Canned Fruit
Computer/Electronic Products
Pet Care
Household Supplies

6702.0%
816.4%
728.5%
245.8%
183.1%
134.4%
110.0%
82.8%
73.1%
62.7%

$1.9
$3.3
$1.2
$11.5
$1.8
$4.7
$1.5
$9.7
$14.7
$27.7

3.5%
12.8%
7.2%
6.8%
17.9%
1.8%
8.1%
3.9%
9.1%
17.8%

(Minimum Private Label Category Size $1MM)

Top 10 Unit Volume Gains in Private Label, 2009


(PLMA's 2009 Private Label Yearbook/The Nielsen Company)

Bread & Baked Goods


Canned Fruit
Detergents
Coffee
Household Supplies
Women's Fragrances
Spices, Seasoning & Extracts
Laundry Supplies
Cheese
Nuts

Unit Volume
% Gain

Unit Volume
(in millions)

Unit Share

220.6%
113.4%
54.2%
51.4%
46.5%
36.0%
34.9%
34.2%
32.4%
30.4%

9.2
1.2
6.0
1.6
8.5
3.4
6.2
9.9
9.7
67.0

9.2%
6.6%
4.6%
2.9%
21.9%
14.6%
31.0%
17.8%
71.1%
53.5%

(Minimum Private Label Category Size 1MM)

105

Private Label Sales In Drug Chains:


Top 10 Categories By Dollar Volume, 2009
(PLMA's 2009 Private Label Yearbook/The Nielsen Company)

Category
Medications/Remedies
Cough And Cold Remedies
Vitamins
First Aid
Pain Remedies
Paper Products
Nuts
Batteries/Flashlights/Chargers
Office/School Supplies
Candy

Private Label
Category
Private Label
Dollar Volume Dollar Volume
Dollar Share
(in millions)
(in millions)
$1.1
$558.1
$457.6
$344.6
$290.1
$283.7
$190.2
$165.5
$146.6
$132.0

$4.6
$2.5
$1.9
$988.0
$1.2
$1.1
$323.4
$662.3
$924.6
$2.3

*
*
*
*
*

25.2%
22.4%
23.5%
34.9%
24.0%
26.7%
58.8%
25.0%
15.9%
5.8%

* (in billions)

Top 10 Categories By Unit Volume, 2009


(PLMA's 2009 Private Label Yearbook/The Nielsen Company)

Private Label Category Unit


Private Label
Unit Volume (in Volume (in
Unit Share
millions)
millions)
Medications/Remedies
Paper Products
Office/School Supplies
Cough And Cold Remedies
Candy
First Aid
Bottled Water
Vitamins
Nuts
Pain Remedies

167.0
162.8
119.4
114.9
109.7
106.9
79.9
68.7
67.0
58.3

* (in billions)

106

571.1
418.8
444.0
383.2
1.6
213.0
278.7
226.2
125.1
198.0

29.2%
38.9%
26.9%
30.0%
6.8%
50.2%
28.7%
30.4%
53.5%
29.4%

Private Label Sales In Drug Chains:


Private Label Dollar and Unit Share By Department
(PLMA's 2009 Private Label Yearbook/The Nielsen Company)

Department

Dry Grocery
Frozen Food
Dairy
Deli
Packaged Meat
Fresh Meat
Fresh Produce
Alcoholic Beverages
Total Food

Private Label
2008 Dollar
Share
8.7%
16.7%
20.0%
0.4%
2.5%
13.9%
11.4%
0.2%
7.8%

Net Share
Net Share
All Brands
All Brands
Private
Point
Point
Dollar
Label 2008 Change Unit Volume
Change
Volume (in
(in millions)
Unit Share
2008 vs.
2008 vs.
millions)
2007
2007
0.8
$7.7 *
8.9%
0.9
4.6
1.4
$384.4
19.6%
1.7
146.5
1.3
$659.7
19.0%
1.4
253.3
0.1
$42.1
0.4%
0.1
17.6
0.3
$32.1
2.7%
0.3
11.9
13.9
$1.3
6.1%
6.1
430.0
1.3
$2.5
12.0%
2.9
1.6
0.0
$2.4 *
0.2%
0.0
251.8
0.8
$11.2 *
9.3%
0.9
5.3

**

0.8
1.4
1.4
1.2

$6.3
$3.7
$21.2
$31.2

*
*
*
*

17.1%
26.5%
20.2%
20.3%

0.7
1.6
1.5
1.2

1.6
1.0
3.5
6.1

Total Non-Food

9.7%
17.5%
16.3%
15.1%

Total

13.2%

1.0

$42.5 *

15.2%

1.1

11.3

Non-Foods Grocery
General Merchandise
Health and Beauty Aids

* In Billions
** In Thousands

Private Label Sales In Drug Chains:


Private Label Dollar and Unit Volume
(PLMA's 2009 Private Label Yearbook/The Nielsen Company)

Total Private Label


Total Brands
Total Channel

2008 Dollar Sales


(billions)

Percent Change
from 2007

$5.6
$36.9
$42.5

14.4%
4.1%
5.3%

2008 Unit Volume


(billions)
1.7
9.6
11.3

Percent Change
from 2007
9.1%
0.2%
1.5%

Private Label Dollar and Unit Share - 2009


(PLMA's 2009 Private Label Yearbook/The Nielsen Company)
2008 Dollar Sales
Market Share
Total Private Label
Total Brands

13.2%
86.8%

Net Share Point


Net Share Point
2008 Unit Volume
Change 2008 vs.
Change 2008 vs.
Market Share
2007
2007
1.0
-1.0
107

15.2%
84.8%

1.1
-1.1

*
*
*

ORGANIC, NATURAL &


SPECIALTY FOODS

... Due to economic concerns the organic, natural and specialty food industries have seen
their share of decreased sales and lowered profits. The sectors normally higher prices alienated many consumers who instead opted for cheaper alternatives. However, those invested
in the products continued to pay a premium for ensured safety, as 2009 bore witness to
several widespread food recalls. Hope remains that the sector will rebound and see a return
to universal popularity in the future.
THE STATE OF THE ORGANICS INDUSTRY
Since the late 1990s, production of organics in the U.S. has more than doubled. That being
said, the consumer market for organic products is growing even faster. Organic products are
firmly established in the American food system and are now found in mainstream retailers
such as Wal-Mart, and even in club and mass settings such as Costco. While organic sales still
account for only about 3% of total U.S. food sales, most Americans now purchase organic products at least occasionally, according to USDAs Emerging Issues in the U.S. Organic Industry
report. Some 69% of U.S consumers purchased organic products in 2008, according to an annual survey conducted by the Hartman Group. [Since 1997], Organic food sales increased from
$3.6 billion to $21.1 billion in 2008. Sales of organic foods increased annually at a rate between 12 and 21% during this 11-year period, according to Nutrition Business Journal (2008).
Market penetration also grew steadily over this time period, with organic products accounting
for more than 3% of total U.S. food sales in 2008. The top two categories, produce and dairy,
accounted for over half of the total organic food sales in 2008, followed by soymilk and other
beverages, packaged foods, breads and grains, snack foods, condiments and meats.
U.S. certified organic crop acreage more than doubled between 1997 and 2005, and organic
production spread to all 50 states and every commodity sector during that time. However, the
pace of expansion is slowing in some sectors. Organic acreage for some crops, including soybeans, declined between 2000 and 2005. Fruits and vegetables still account for the largest
percentage of all organic certified crops.
During the early 1990s, organic farmers main concern was a lack of consumer demand for
their products. While limited demand can still be a problem at times for organics, limited supply became the major issue over the last 10 years. By the late 1990s, organic handlers faced
difficulties procuring large enough quantities of organic product to suit consumer demand,
faced issues with locating organic producers from whom to purchase, and had issues gaining
access to shelf space in supermarkets (Dimitri and Richman, 2000).

SALES OF SPECIALTY FOOD BY RETAIL CHANNEL-2008


(Source: Specialty Food Magazine/Mintel/SPINS/ACNielsen)
2006

Mainstream
Specialty Food Stores
Natural Food Stores
TOTAL

$ Million
$19.4
$4.9
$1.7
$26.0

2007
2008
2006-2008
%
%
%
%
Share
Share
Share
$ Million
$ Million
Change
74.7%
$21.6
74.6%
$23.1
74.3%
18.9%
18.7%
$5.3
18.5%
$5.7
18.2%
16.5%
7%
$2.0
6.9%
$2.3
7.5%
33.8%
100%
$28.9
100%
$31.1
100%
19.4%

Note: The totals listed here do not include sales through Trader Joe's or Wal-Mart
Data may not equal totals due to rounding.
108

More recently, long-term organic handlers reported that the lack of reliable supplies for organic
raw materials is a major factor that constrained business growth, according to the Organic
Trade Association (OTA). In particular, organic dairy producers and soy food producers face
shortages of domestically produced organic feed grains and soybeans. According to USDA,
some 13% of all handlers were unable to meet market demand for at least one of their organic
products during 2004. Further, some 44% of organic handlers found necessary ingredients or
products in short supply in 2004. In an effort to remedy these shortfalls, handlers are attempting to develop relationships with new or less experienced suppliers and are becoming more
flexible on shipment size.
In 2002, the U.S. National Organic Program (NOP) streamlined the certification process for domestic and international trade of organic product, permitting farmers and handlers around
the globe to export organic products to the U.S., provided that they meet NOP standards,
along with regulatory standards and are certified by a public or private organic certification
body with USDA accreditation. In 2007, USDA-accredited groups certified 27,000 producers
and handlers worldwide to the U.S. organic standard, with approximately 16,000 in the U.S.
and 11,000 in over 100 foreign nations. Farmers and handlers certified to NOP standards are
most common in Canada, Italy, Turkey, China and Mexico, which together accounted for half
the total foreign organic farmers/handlers in 2007.
The U.S. does not have updated data on organic trade because organic product codes have
not yet been established within the U.S. A USDA report estimated that the value of organic imports in 2002 was between $1.0-$1.5 billion and the value of U.S. organic exports was between
$125-$250 million. Imports increased as growth in organic demand exceeded domestic supply.
Organic dairy remains the fastest growing organic sector, with organic milk accounting for
over 3% of all milk products sold in the U.S. last year. The primary difference in the production
practices used by organic versus conventional dairies is the feeding system. In 2005, more
than 60% of organic operations reported using pasture-based feeding that provides more than
half of seasonal forage from pasture, compared with 18% of non-organic dairy producers. Further, the growth hormone rbST is not available for use by organic producers, but was used by
17% of conventional operators. Organic operations averaged about 13,600-lbs. of milk per
cow in 2005, versus nearly 19,000-lbs. of milk in conventional operations.
USDA examined costs of production for organic and conventional dairy systems in order to
determine whether organic milk price premiums allow organic systems to compete with conventional systems. Average operating and capital costs for organic dairies, including an estimate of the additional costs incurred during transition, was an estimated $6.38 per cwt of
milk higher than for conventional dairies in 2005. Most organic dairies are small operations,
with returns that compare favorably with those of small conventional operations.
Meanwhile, organic soybean acreage in the U.S. has been at a standstill since the early 2000s,
despite the fast-growing market for organic soymilk and feed grains and large price premiums
for organic soybeans. Still, research suggests that growing organic soybeans can be more
profitable than growing conventional soybeans. According to Lynn Clarkson, president of an
organic grain supply company, grain supplies are tight despite high demand and price premiums. Also, as the number or organic soybean producers increased worldwide, U.S. producers
have faced increased competition for the domestic market, as well as for the Japanese organic
soybean market, which was a major purchaser of U.S. organic soybeans in the late 1990s and
early 2000s.
According to USDA, average soybean operating costs per acre are not significantly different
between conventional and organic producers, but total operating and capital ownership costs
109

DOLLAR SALES OF SPECIALTY FOODS


(Source: Specialty Food Magazine/Mintel/SPINS/ACNielsen)
2008 Dollar 2008 Share
Sales (In of Specialty % Chg.
Millions) Food Sales 2006-2008

Category

Cheese & Cheese Alternatives


Condiments
Frozen & Ref. Entrees, Pizzas & Convenience Foods
Frozen & Ref. Meats, Poultry & Seafood
Chips, Pretzels, and Individual Snacks

$3,407

11.0%

19.8%

$2,429

7.8%

6.7%

$1,704

5.5%

30.3%

$1,543

5.0%

20.4%

$1,387

4.5%

29.2%

Frozen Desserts
Frozen and Non-Frozen Bread and Baked Goods
Ref. Juices and Functional Beverages
Coffee, Coffee Substitutes and Cocoa
Shelf-Stable Sauces, Salsas and Dips
Cookies and Snack Bars
Milk, Half & Half and Cream
Candy and Individual Snacks
Yogurt & Kefir

$1,338

4.3%

5.3%

$1,101

3.5%

22.5%

$1,063

3.4%

54.4%

$1,014

3.3%

9.3%

$870

2.8%

14.8%

$851

2.7%

25.6%

$842

2.7%

33.1%

$811

2.6%

38.3%

$699

2.2%

55.3%

Cooking Oils
Carbonated, Functional and RTD Tea and Coffee Beverages
Shelf-Stable Pastas
Baking Mixes, Supplies and Flour
Shelf-Stable Fruits & Vegetables
Teas

$688

2.2%

3.4%

$687

2.2%

15.7%

$684

2.2%

32.7%

$638

2.1%

20.5%

$627

2.0%

10.7%

$599

1.9%

7.5%

Cold Cereal
Shelf-Stable Juices & Functional Beverages
Ref. Entrees, Sushi and Grab-and-Go Meals
Ref. Non-Dairy Beverages
Ref. Sauces, Salsa and Dips
Crackers and Crispbreads
Water
Soup
Seasonings
Beans, Grains and Rice
Entrees and Mixes
Nuts, Seeds, Dried Fruit and Trail Mixes

$584

1.9%

27.9%

$581

1.9%

7.3%

$556

1.8%

23.3%

$511

1.6%

19.2%

$498

1.6%

23.7%

$471

1.5%

5.8%

$456

1.5%

13.0%

$427

1.4%

14.0%

$417

1.3%

12.5%

$405

1.3%

28.8%

$397

1.3%

19.8%

$354

1.1%

6.5%

Other Dairy
Energy Bars and Gels
Sweeteners
Shelf-Stable Meat, Poultry and Seafood
Conserves, Jams and Nut Butters
Frozen Fruits and Vegetables
Shelf-Stable Non-Dairy Beverages
Eggs
Frozen and Ref. Meat Alternatives
Pudding and Shelf-Stable Desserts
Hot Cereal
Tofu
Baby Food
Rice Cakes
Frozen Juice and Beverages

$350

1.1%

11.4%

$339

1.1%

29.4%

$245

0.8%

22.0%

$240

0.8%

-0.5%

$221

0.7%

17.7%

$199

0.6%

29.0%

$187

0.6%

19.8%

$174

0.6%

30.2%

$152

0.5%

12.4%

$109

0.4%

8.2%

$75

0.2%

16.4%

$61

0.2%

4.1%

$58

0.2%

69.7%

$17

0.1%

9.9%

$8
$31,077

0.0%
100.0%

-0.1%
19.4%

Total
*Does not inlcude sales through Wal-Mart, Trader Joe's or PLU sales.
110

and total economic costs were higher for organic soybean production. Conventional producers
had higher chemical costs, while organic producers substituted field operations for chemical
costs and hired labor costs. Average organic soybean yield is typically lower than conventional,
producing 31 bushels per acre compared to 47 bushels per acre, respectively.
... The recession has put pressure on the organics industry, causing consumers to become
more selective regarding what products they choose to pay a premium for. While consumers
have not abandoned the sector completely, they have become much more selective.
2009 ORGANIC MARKET EXAMINED; CONSUMERS BEING MORE SELECTIVE
U.S. sales of organic products, both food and non-food, reached $24.6 billion by the end of
2008, growing 17.1% over 2007 sales, according to the Organic Trade Associations 2009 Organic Industry Survey. The survey, conducted by Lieberman Research Group, found that organic food sales grew by 15.8% to reach $22.9 billion in 2008. Organic food sales now account
for approximately 3.5% of all food sales in the U.S. Increased use of coupons, the proliferation
of private label brands and value-positioned products offered by major organic brands all
aided in increasing sales, according to the Organic Trade Association.
However, in the fourth quarter of 2008, reports emerged of changing consumer behavior, as
well as indications that a plateau was reached in overall organic sales in several categories,
reported Specialty Food Magazine (March). Consumer use of organics dropped four percentage
points, from 73% in 2006 to 69% in 2008, according to The Hartman Groups The Many Faces
of Organics: 2008 report. Contributors to the slowdown include food recalls, confusion over
the meaning of organics and price-point frustration. Kara Nielsen, trendologist for the Center
For Culinary Development, stated that a better understanding of what organic means and stories about how organic products are produced and why they are important may help the organic market grow.
Consumers are being more selective about what organic products they will purchase in reaction to the economic downturn, reported Food Business News (Apr. 14). Consumers are not
leaving the organic marketplace, but they certainly are making decisions about what matters
to them within organic and what doesnt, stated Laurie Demeritt, president and chief operating officer of The Hartman Group. So we are starting to see some consumers who are having
to make some trade-offs because of the economic situation, but we certainly dont believe
that means people are leaving the category entirely.
Products that seem the most recession-proof are the gateway items such as dairy, produce,
meat and other perimeter-of-the-store foodstuffs. Meat and poultry, fresh fruit, soymilk, milk,
fish and seafood and bread are the top fresh categories consumers are willing to pay 30% or
more for than the conventional version, according to The Hartman Group. Meat and poultry
increased from 54% of organic consumers being willing to pay such a premium in 2006 to
65% in 2008, while milk increased from 49% in 2006 to 62% in 2008.
Emerging organic categories include kid-friendly packaged refrigerated meals, artisan products, chocolate, coffee, designer beverages, ethnic foods, convenience foods (frozen,
canned/jarred) and raw food like nuts.
The Hartman Group found that buying local is increasing in relevance with 52% of respondents
stating it was important, whereas 23% stated it was important for them to buy organically
grown food whenever possible. The group also found that 30% of consumers were concerned
about and prioritized organic foods being available at fine dining restaurants, with only 18%
feeling the same way for full-service restaurants. We dont think there is going to be a ton of
new entrants, stated Ms. Demeritt. We do see people who are already engaged sometimes
111

UNIT SALES OF SPECIALTY FOODS


(Source: Specialty Food Magazine/Mintel/SPINS/ACNielsen)
2008 Unit
Sales (In
Millions)

Category
Condiments
Cheese and Cheese Alternatives
Chips, Pretzels, and Individual Snacks
Shelf-Stable Pastas
Frozen and Ref. Entrees, Pizzas and Convenience Food
Shelf-Stable Fruits and Vegetables
Frozen and Non-Frozen Bread and Baked Goods
Yogurt and Kefir
Frozen Desserts
Frozen and Ref. Meats, Poultry and Seafood
Shelf-Stable Juices and Functional Beverages
Shelf-Stable Sauces, Salsas and Dips
Ref. Juices and Functional Beverages
Carbonated, Functional and RTD Tea and Coffee Beverages
Candy and Individual Snacks
Cookies and Snack Bars
Energy Bars and Gels
Baking Mixes, Supplies and Flour
Water
Milk, Half & Half and Cream
Teas
Seasonings
Entrees and Mixes
Crackers and Crispbreads
Soup
Cold Cereal
Ref. Non-Dairy Beverages
Beans, Grain and Rice
Ref. Sauces, Salsas and Dips
Coffee, Coffee Substitutes and Cocoa
Shelf-Stable Meat, Poultry and Seafood
Ref. Entrees, Sushi and Grab-and-Go Meals
Nuts, Seeds, Dried Fruit and Trail Mixes
Other Dairy
Cooking Oils
Shelf-Stable Non-Dairy Beverages
Pudding and Shelf-Stable Desserts
Frozen Fruits and Vegetables
Baby Food
112

% Chg.
20062008

709
621
426
408
395
384
339
338

-1.3%
4.5%
16.1%
12.7%
17.2%
-4.5%
4.3%
20.7%

311
303
297
286
276
275
265
265
201
192
192
189
158
153
151
149
149
134
124
122
120
116
108
90

3.3%
17.4%
-8.9%
10.4%
43.0%
5.8%
15.2%
8.6%
23.3%
4.3%
0.0%
28.6%
1.9%
5.5%
4.9%
-3.9%
1.4%
18.6%
11.7%
-0.8%
17.6%
0.0%
-12.2%
11.1%

85
84
74
64
61
60
49

-8.6%
-1.2%
-3.9%
10.3%
13.0%
17.6%
44.1%

buying new products or more products. So we think a lot of the growth is going to come from
folks who are already buying, but they maybe only are buying a few organic items.
The largest organic buying demographic is mid-level consumers, who represent 65% of organic
consumers. While core consumers are becoming more engaged in buying organic and expanding into non-food categories, mid-level consumers are leveling off their organic purchases.
STATE OF THE SPECIALTY FOOD INDUSTRY 2009
While sales are leveling off due to the current global economic downturn, the future looks
bright for the specialty food sector. Although more people are eating at home, consumers are
still willing to pay more for gourmet food items, according to Specialty Foods Magazines State
of the Specialty Food Industry 2009 report. Overall, the total specialty food industry recorded
$60 billion in sales in 2008, and accounts for 15.9% of all retail food sales. At the same time,
the number of new specialty food products introduced in 2008 fell to 2,349 from 3,158 in
2007.
Roughly 80% of the $60 billion spent for specialty food items were bought through retail channels, while the retail dollar sales increased 8.4%. Mainstream retailers (mostly supermarkets)
account for the majority of sales of specialty foods (74% in 2008), followed by specialty food
stores (18%) and natural food stores (7.5%). And while natural food stores were ranked last in
sales, it is the sector that is growing the fastest, with a 33.8% increase over 2006 dollar sales.
Overall, specialty food product introductions are down 3.7% from 2006 levels, totaling 2,349
products in 2008. In the past three years, 2007 had the most new product introductions, with
3,158, up almost 30% from 2006. At the same time, the amount fell more than 25% from
2007 to 2008. The largest change from 2006 to 2008 was for dairy products, up 135%; the
lowest was baby food, which was down 100% in 2008 from six introductions in 2006 and 16
in 2007. Fittingly, the sector ranked in the top spot of dollar sales of specialty foods at retail
was cheese and cheese alternatives, with sales of $3.4 billion. Condiments, frozen and refrigerated entrees, frozen and refrigerated meats and chips, pretzels and individual snacks
rounded out the top five, with cumulative sales of almost $10.5 billion in 2008. Surprisingly,
of the 47 segments that the specialty food markets had been divided into, only two sectors
showed a negative growth from 2006: shelf-stable meat, poultry and seafood and frozen juice
and beverages, -0.5% and 0.1%, respectively. Even so, these percentages are only small declines, while the biggest increase was yogurt and kefir with growth of 55.3%.
Meanwhile, specialty food manufacturers are trying to minimize the negative impact of the
economy. More than 50% of manufacturers are reporting that the economy affected their sales
negatively, while only 15% are reporting an increase of 10% or more. About 47% of manufacturers are producing the same amount of environmentally-friendly products, compared to 51%
in 2007. At the same time, the amount of manufacturers making more environmentallyfriendly products increased 1% from to 27% in 2008. An increasing amount of companies are
importing from Europe while products from Asia and Africa fell. Products from South America
are enjoying an increase, with 16% of importers getting products from that area, compared to
only 8% in 2007. Organic and natural products also now account for almost 50% of imports,
with Fair Trade taking 26% and eco-friendly taking 28% in 2008.
Specialty food stores are becoming more of a one-stop shopping destination, according to
the report, as more stores diversify their offerings. In 2008, more than 80% of specialty food
stores offered specialty grocery, 76% offered non-foods and more than two-thirds offered
cheese. Produce, meat and seafood and bakeries are now featured in more than 40% of stores
and more than half now offer wine and other alcoholic beverages. Of the products that are
113

offered at these stores, 28.7% are characterized as artisanal, followed by locally sources, organic, eco-friendly and Fair Trade, 19.6%, 19.1%, 15.4% and 10.2%, respectively.
... Trends in the organic and specialty food sectors in 2009 revolved around consumers seeking more environmentally-friendly offerings, healthier and more functional foods and locallygrown products.
CONSUMERS SEEKING ENVIRONMENTALLY-FRIENDLY PRODUCTS
Slightly more than one-third of consumers claim they are more likely to buy environmentally
responsible productsand another 44% report their environmental shopping habits have not
changed as a result of the recession, revealed the 2009 Cone Consumer Environmental Survey
conducted by Opinion Research Corp. Fewer than one in 10 (8%) claim they are less likely to
buy these products.
Among other findings: 35% of Americans have more interest in the environment currently than
they did one year ago; 35% have higher expectations for companies to make and sell environmentally responsible products and services during the economic downturn; and 70% indicate
that they are paying attention to what companies are doing with regard to the environment
today, even it they cannot buy until the future.
The fact that consumers continue to be interested in the environment and mindful of corporate efforts, even in the midst of a grueling recession, is evidence that this is more than just
a passing trend, stated Jonathan Yohannan, senior vice president of Corporate Responsibility,
Cone. Environmental responsibility is not just an expectation in times of prosperity.
BETTER FOR YOU FOODS TO GROW OVER NEXT DECADE: NPD
Better for you foods are likely to be among the fastest growing food trends over the next
decade, according to The NPD Groups A Look into The Future of Eating report. According to
the company, organic food will grow 41% over the next 10 years, followed by restaurant meals
eaten in-home with 20% growth and light/lite/diet/low calorie labels, which are expected to
grow 18%. As the population ages, levels of concern regarding food and nutrition are expected
to rise, stated Ann Hanson, author of the study and director of product development at NPD.
For this reason, better for you food options are forecasted to grow strongly over the next
10 years.
The NPD report also identified the foods that will be declining over the next decade. Among

TOTAL U.S. RETAIL SPECIALTY


FOOD DOLLAR SALES-2008
(Source: Specialty Food Magazine/Mintel/SPINS/ACNielsen)

Sales At Current Prices


$ Million
Index
% Chg.
2006
2007
2008

$39,727
$44,351
$48,061

100
112
121

Sales At Constant 2008 Prices*


$ Million Index % Chg.

N/A
11.6%
8.4%

$42,411
$46,036
$48,061

Note: Does not include sales through Wal-Mart


* Adjusted for inflation using the all itms CPI
114

100
109
113

N/A
8.5%
4.4%

them are quick assembly lunch/dinner foods, which are dominated by sandwiches, certain
breakfast foods and side dish breads.

WHOLE FOODS MARKET BRINGS FOCUS BACK TO HEALTH, WELLNESS


Whole Foods Market Inc. is emphasizing healthy living and return to its natural-foods origins
in an effort to reverse falling sales. Products sold are focused on health. We sell a bunch of
junk, stated CEO John Mackey. The retailer launched a healthy eating initiative with cooking
demonstrations and recipes in fall 2009. One employee in each store is charged with answering consumers questions about food choices and provides reference information. In addition,
the company mobilized a team of health experts to develop a program to reward employees
who hit targets for weight loss, quitting smoking and improving blood pressure, reported The
Wall Street Journal (Aug. 5). The initiatives should help the company foster loyalty among organic and natural food shoppers, according to Ed Aaron, a RBC-Capital Markets analyst.
To stay competitive, Whole Foods Market, which boasts 282 stores totaling 10.4 million-sq.
ft., lowered many prices and expanded its private label 365 offerings by 5% to 2,300 products.
Mr. Mackey stated the company now considers Costco a competitor and is bundling products
including cereal in some locations to offer volume discounts. The company is also increasingly
interested in Trader Joes, and in many cases matches its 365 prices to those set by the retailer.
We have a policy that our 365 private label has to match Trader Joes prices, unless there is
a significant difference in quality, in which case it probably shouldnt be a 365 product, stated
Mr. Mackey. Also, Whole Foods is pricing items such as salmon individually as opposed to by
the pound. Sales are advertised more prominently as well. For instance, large yellow sale signs
are positioned throughout its flagship Austin, TX-based store.
FUNCTIONAL FOODS MARKET INCREASED 6% IN 2008: REPORT
The U.S. retail market for functional foods and beverages increased 6% in 2008, with sales totaling almost $31 billion, according to Packaged Facts Functional Foods and Beverages in the
U.S., 4th Edition report. Total U.S. retail sales of functional foods and beverages will continue
to grow at a steady pace through 2013, and reach approximately $43 billion. During the fiveyear period from 2003 to 2008, several functionally oriented food and beverage categories
performed well, including yogurt, energy drinks, nutritional snacks and trail mixes, milk substitutes and soymilk, and refrigerated blended fruit drinks.
BUY LOCAL MESSAGE HAS APPEAL, BUT NEEDS MORE SUPPORT
One in six consumers, or 17%, buy local products and services as often as possible, according
to Mintels consumer survey on local shopping. These True Locals are willing to pay a higher
price and they will even buy local if competitive products are better. However, Mintel identified
30% of respondents as Aspirational Locals, or consumers who claim they would purchase
local goods and services, but are unsure where to find them. Further, some 27% of consumers
are No Locals, and do not have a preference as to where their food and services come from.
We found that although the buy local mantra has gotten strong media coverage and government support, most Americans havent yet incorporated it into their lifestyles, stated Krista
Faron, senior analyst at Mintel. Nonetheless, local products offer unique benefits and are
more accessible than ever before, so we think the local movement has relevance with todays
consumer.
115

Mintels survey found that consumers who purchase local goods most often purchase food.
Local fruits and vegetables are by far the most common, with three in 10 adults (31%) claiming
to purchase them at least once a week. Approximately one in four shoppers buy local baked
goods, meats or cheese/dairy products once a week or more.
In 2008, Mintels Global New Products Database tracked several new local food and drink
launches in the U.S. For example, Natural Directions Organic Flour is produced in a small mill
in Utah, while Blue Chair Fruit Company launched Meyer Lemon Marmalade with Mandarins &
Lavender, claiming to use local, sustainable ingredients to support local farms.
Local is becoming a desirable product claim, as people try to save money, support their communities and preserve the environment, stated Ms. Faron. We found that over half of local
shoppers are trying to help their local economy, but they also buy local products for convenience, better taste and the environment. Companies should use these motivations to craft marketing messages that appeal to locally conscious consumers. Mintel views 25 to 34-year-olds
and families with children as the most enthusiastic local shoppers.
... As interest in the gourmet and specialty food market grows, more retailers are looking to
place these products in their stores. Due to their popularity, select retailers are looking to expand despite the harsh economy.
SHOPPING CENTERS SEEK GOURMET AND SPECIALTY FOOD MARKETS
Owners of malls and retail centers are increasingly seeking to open specialty food markets
such as Whole Foods Market, Fairway Market, Stew Leonards and Trader Joes, according to
The Record (Mar. 22). Usually were a big draw for any shopping center, because we get
100,000 customers a week in our food stores, stated Stew Leonard Jr., president and chief
executive officer of the Stew Leonards chain. Were a high-traffic generator. Landlords like
us for that reason.
Interest in fresh-style markets among developers intensified by the success of the Whole
Foods chain, whose New York and New Jersey stores often draw more than 100,000 shoppers
per week. Landlords are coming to us and asking, Are there any food markets that we can
bring in, because we need someone to generate traffic, stated Chuck Lanyard, president of
Paramus, NJ-based real estate brokerage firm The Goldstein Group.
Landlords want to incorporate Whole Foods locations into their shopping centers because
other retailers can latch on to the foot traffic that Whole Foods will bring to a center, stated
Michael Fasano, regional manager of the New Jersey office of Marcus & Millichap, a real estate
investment firm. Stores such as Whole Foods and Fairway are prized tenants for several reasons, according to food retail consultant Bill Bishop. The demographics of a fresh food store
are very attractive, stated Mr. Bishop, chairman of Willard Bishop LLC. The income level skews
upward. The stores also draw customers from a geographic area substantially larger than a
supermarket because people will drive farther to get something special, Mr. Bishop stated.
Shoppers tend not to use the gourmet or specialty-food markets as their primary grocery
stores, but shop there for out-of-the-ordinary items, which actually makes them ideal to combine with other shopping trips, stated Mr. Bishop. People will say, Im going to the lifestyle
shopping center and were going to get a wonderful loaf of bread at the same time as we do
two or three other things, because thats the only place I can get that bread or that pie, or
that piece of salmon.
Stew Leonard Jr. believes the appetite on the part of shoppers and developers has been fueled
by the popularity of the Food Network and television cooking shows. People are much more
into cooking, Mr. Leonard stated. Theyre making an event of eating at night.
116

Despite the sectors positives, retail sales of specialty or gourmet food rose in 2008 until the
fourth quarter, when sales began to fall, according to The National Association For the Specialty Food Trade, Inc., reported St. Louis Post-Dispatch (Mar. 25).
PHILS FRESH FOODS PLANS EXPANSION
Boulder, CO-based Phils Fresh Foods plans to expand into warehouse stores and additional
supermarkets. Owner Phil Anson is optimistic that the pullback in consumer spending will
benefit sales of his burritos, which sell for about $2.50 in varieties including chicken red chile
and green chile breakfast. The company already sells its burritos in some 1,500 natural foods
stores, including about 140 Whole Foods locations. In fact, Whole Foods provided the company
with a $96,000 loan from the companys Local Producer Loan Program, which Phils used to
install more manufacturing and quality control equipment and expand into a 5,000-sq. ft. facility, reported the Rocky Mountain News (Jan. 15).
FOODZIE BREAKS INTO ONLINE FOOD SALES MARKET
Online specialty grocer Foodzie, founded by Rob LaFave, Emily Olson and Nik Bauman, sells
products from small producers in 25 states and relies on attractive photos and an uncluttered
design to compete with other online specialty grocers including Amazon and IGourmet, reported BusinessWeek (Apr. 24). What was lacking in online [food stores] was an experience
that makes you hungry, Mr. Bauman stated. The company is attempting to give artisan food
producers a bridge from local farmers markets to crowded virtual grocery-store shelves, and
profit from increased online food sales, which totaled $4.8 billion in 2008 and were up 11%
in 2009s first quarter, according to market researcher Comscore. [Online food sales] is one
of the biggest consumer categorie now, and even a small sliver of that can be attractive,
stated Sucharita Mulpuru, an analyst at Forrester Research. However, online food sales can be
challenging as perishable goods and shipping costs erode profit margins.
Items on Foodzie generally sell at higher prices than at supermarkets, with pasta sauce made
with extra virgin olive oil selling for $8 and boxes of marshmallow cookies selling for $24.
However, the site does offer more affordable items, such as popcorn at $5 for 1.5-lbs. The

117

Foodzie team considers its products small luxuries, in which consumers can still indulge despite the current economic downturn. People are looking to change the way they eat, stated
sMs. Olson. The company developed software that allow food bloggers and consumers to
share links to the Foodzie website in Facebook.

ORGANIC SWEETNER AND GRAINS MARKET EXPANDING


The global organic food market is expected to reach $70.2 billion by the end of 2010, according to Research and Markets Emerging Organic Food Markets report. The North American
market grew at a compound annual growth rate (CAGR) of around 21% from 2005-2007, according to Milling & Baking News. Europe and North America accounted for 96% of global organic revenues in 2007. The natural and organic food and beverage market in the U.S. grew
nearly 68% between 2005-2008, a CAGR of 19%, according to Packaged Facts.
Growth potential lies in childrens products and grain-based foods. About 67% new organic
baby products were launched in the U.S. in 2007, compared with 61% in 2006 and 35% in
2005, according to Mintels Global New Products Database. For example, HappyBabys organic
product line HappyBellies includes brown rice, oatmeal and multigrain cereals. Organic readyto-eat cereals and tortilla chips surpassed $100 million in U.S. sales, according to The Nielsen
Co. Cereal sales were $130 million for the period ended July 12 in food, drug and mass merchandiser stores, excluding Wal-Mart. The sales were a 6% increase from $123 million in the
previous 52-week period. Tortilla chips sales reached $101.4 million, up 4% from the previous
year. Annual U.S. sales for organic bread is nearing $100 million, according to The Nielsen
Co. Sales reached $95.5 million in the 52 weeks ended July 12, 2008 up more than 18% from
$80.7 million the previous period.
Organic sweeteners were showcased at the All Things Organic exposition in Chicago. Briess
Malt & Ingredients Co. featured its organic BriesSweet tapioca syrup as a 1:1 replacement for
corn syrup. Cargill featured its organic cranberry almond granola bars sweetened with organic
glucose syrup. Ciranda launched organic inulin, a prebiotic fiber from agave. The resistance
from food manufacturers to offer organic products seen earlier in the decade has generally
disappeared. The companies at one time may have thought an organic line would put its general line in a negative light, according to Prescott Bergh, director of marketing for Ciranda.
DAIRY SEGMENT CONTINUES TO SEE GROWTH
Despite the impact of higher prices, yogurt and other cultured product sub-segments continue
to offer growth opportunities. Dollar sales for yogurt grew nearly 10% during the 52 weeks
ended Sept. 7, 2008, according to Information Resources Inc. (IRI), reported Dairy Foods (November 2008).
Among the fastest growing brands of yogurt and yogurt drinks are three functional products
from Dannon. Activia is now the No. 5 brand, including private label. IRIs numbers show that
dollar sales for Activia were up 25% in the 52 weeks ended Sept. 7, while unit sales grew
almost 14%. Activia Light is a much newer product, yet it is the No. 8 brand. Dannons yogurt
shot, DanActive, which claims to help boost the immune system, is now among the top 15
brands. Combined sales of these three Dannon Products were more than $300 million in market channels. Yoplaits Yoplait Light brand also experienced growth during the same period,
with dollar sales up 20% and unit sales up more than 13%.
Cottage cheese is the second largest sub-category in cultured dairy. Dollar sales increased
steadily since July 2007 as prices increased and specials were restricted. By the end of January,
dollar sales jumped 12.2% for the quarter while unit sales fell 7.7%.
118

Sour cream sales totaled more than $750 million in sales, while refrigerated dips accounted
for more than $445 million in sales for the same period, with private label taking about 20%
of the total. Most top brands saw some unit declines, while private label grew slightly. Kraft
experienced double-digit declines by both measures.
Cultured dairy products captured a major share of the functional foods category, as the Mintel
Global New Products Database reports that spoonable yogurt was the second most active category among all U.S. functional foods in 2007. Omega-3 enhanced products became the most
visible and influential cultured dairy products. In 2007, Breyers and Blue Bunny launched
omega-3 yogurts in the U.S., while Yoplait also introduced omega-3 yogurt products, both
spoonable and drinkable.
Beauty foods, though most popular in Asia, are experiencing rapid growth in the U.S. Dannon
is leading the way in this category with its Light & Fit Crave Control yogurt made with fruit cereal, fiber and protein. Stonyfield Farm continues to lead the organic category as the worlds
largest organic yogurt company.
Greek style yogurt is cited in the report as one of the fastest growing categories in the cultured
dairy foods segment. Agrofarma Inc.s Chobani is becoming popular, as it contains more than
twice the amount of protein of traditional American yogurts. Chobani also contains five live
and active cultures, including three described as probiotics. Stonyfield also produces the Greek
style line Oikos Organic Greek Yogurt in partnership with Euphrates, while 3 Greek Gods LLC
markets Greek Yogurts in traditional fig, honey and pomegranate flavors. SKYR, an Icelandic
yogurt that resembles Greek yogurt, Australian-style organic yogurt and Kefir are also becoming popular in this category.
GENERAL MILLS SEES OPPORTUNITIES FOR GLUTEN-FREE PRODUCTS
General Mills Inc.s Betty Crocker brand rolled out gluten-free mixes for cookies, brownies and
cakes, which the company claims are the first gluten-free offerings from a major brand in the
cake-mix segment, reported The Wall Street Journal (July 2). General Mills decided to pursue
gluten-free products in 2008 after its customer-relations department noticed that customer
concerns and inquiries about food allergies were mostly focused on the presence of gluten in
foods, according to General Mills president of baking products Ann Simonds. Gluten, a key
protein in wheat, cannot be digested by sufferers of Celiac disease without causing damage
to their digestive system. Currently, only 1% of the U.S. population is diagnosed with Celiac
disease, but the numbers are rising and dieting fads that reduce gluten intake are becoming
popular. General Mills own research finds that about 12% of U.S. households would like to reduce gluten in their diets, even though doctors state that gluten is nutritionally important for
the diets of those without Celiac disease.
General Mills released a gluten-free version of its Chex cereal July 2007, and the company
claims it received many emails and phone calls expressing gratitude for the product. Recognizing the demand for gluten-free products, General Mills sought to add more items without
the protein to its brands. However, the company found it difficult to create gluten-free mixes
that measured up to customer expectations for its Betty Crocker brand. Most traditional baked
goods contain at least 30% wheat flour, and gluten in wheat flour helps the dough rise and
stay springy and also keeps cookies intact. General Mills initially experimented with yellow
cake, a rice-flour mix, and baked more than 1,000 pans of brownies, cookies and cakes between September and December of 2007 to find a suitable formula. The resulting mixes sell
for about $2 more than traditional, gluten-containing Betty Crocker mixes.
What is novel about General Mills new line is the marketing program behind it. While the
spending budget for the program was not disclosed, the company revealed that it is much
119

less than is traditionally spent on national product launches. It used to be, as a marketer in
the food industry, you needed a $50 million idea to make the business model work, stated
Ms. Simonds, but claimed that currently you can meet an unmet need that will be a $5 million
business.
Partly because of the limited customer base, General Mills is taking a non-traditional approach
to market its gluten-free mixes. In May, Betty Crocker sponsored a booth at a Celiac Disease
Foundation event in California, and plans to participate in more gluten-related events while
advertising in gluten-free lifestyle magazines. Following the lead of large corporations like
Mars Inc. and Procter & Gamble Co., General Mills is also focusing on digital marketing tools
instead of TV or print media advertising. The company paid for product links to appear more
prominently in Google searches for gluten-free products and sent product samples to bloggers
writing about Celiac disease.
General Mills intends to continue with its gluten-free product launches, and plans more items
in their lines in the future. Most gluten-free products are currently supplied by small food companies, and General Mills believes it can capitalize on an underrepresented market. The marketing manager for the bakery products division stated that the company refers to its
gluten-free product base as narrow but deep, as the companys products may be the only
mix that someone with Celiac disease would buy. And as retailers are cutting product lines
from shelves, a spokesperson for Supervalu Inc. stated that gluten-free products are becoming
an area of dietary concern for consumers, and the chain wants to ensure that their stores can
meet those customers needs.

CONSUMERS CONTINUE TO SWEETEN UP TO PREMIUM CHOCOLATE IN 2008


Total chocolate sales grew 5.3% in 2008, while the premium sector increased 15% in 2008,
and 10% through 2012, according to a Packaged Facts report (November 2007). Growth and
demand for premium chocolate is increasing. Sales were $3 billion in 2007, growing 17% from
2006 and 200% since 2003, and accounting for 18% of the total market share. Consumers
often view premium chocolate as a healthy snack, and affordable self-indulgence or a meaningful gift to another. At the same time, total U.S. retail chocolate sales rose only 4.3% from
2006 to $16.5 billion. Both sectors are facing difficult times, with higher ingredient costs
squeezing profits and a recessionary economic environment dampening demand. In 2007
alone, cocoa prices rose 53%, a 28-year high.
So how does one define premium chocolate? Packaged Facts admits that the definition is open
to debate, as it can be defined by price, ingredients and percentage of cocoa, or more intangible terms like technique, craft, innovation, creativity, vision and simplicity. The product
found a niche in the global population as more consumers palates become more diverse, and
premium chocolate offers almost unlimited possibilities.
Contrasting the general situation of the chocolate sector, premium chocolate has much room
to grow, as it is becoming more readily available in food supermarkets, drugstores and massmerchandisers (FDM), in addition to convenience stores and vending machines. New chocolate
candy products increased 22% in 2007, and was predicted to trend down to around 11% in
2008. At the same time, per capita consumption of premium chocolate rose from 10% in 2003
to 14% in 2007. On the other hand, a company must be careful not to over-extend itself as
Moonstruck Chocolates did, according to OregonLive.com (Dec. 2). The companys new CEO,
Dan Hossley, closed all nine of Moonstrucks cafes outside Oregon in fall of 2007, which enabled Moonstruck to focus more on providing fresh chocolates to its local customers. The
120

SPECIALTY FOOD PRODUCT INTRODUCTIONS - 2008


(Source: Specialty Food Magazine/Mintel's Global New Products Database)

Category
Chocolate Confectionary
Bakery
Sauces and Seasonings
Non-Alcoholic Beverages
Alcoholic Beverages
Sugar and Gum Confectionary
Snacks
Dairy
Desserts and Ice Cream
Sweet Spreads
Meals and Meal Centers
Processed Fish, Meat and Egg Products
Savory Spreads
Side Dishes
Breakfast Cereals
Fruit and Vegetables
Soup
Sweeteners and Sugar
Baby Food
Total

2006

2007

191
356
491
375
134
128
191
51
76
81
72
63
41
49
16
41
65
11
6

334
420
546
497
126
182
278
80
68
137
139
72
42
48
32
94
40
7
16

2,438

3,158

2008
338
325
312
261
235
218
180
120
78
69
56
37
37
33
27
11
9
3
0

% Chg. 2006-2008
77.0%
-8.7%
-36.5%
-30.4%
75.4%
70.3%
-5.8%
135.3%
2.6%
-14.8%
-22.2%
-41.3%
-9.8%
-32.7%
68.8%
-73.2%
-86.2%
-72.7
-100.0

2,349

-3.7

*Percent increase greater than 1,000%.

company also hopes to create a regional identity with locally grown fruits and nuts.
New product claims are becoming increasingly important and noticed by consumers, and the
top 20 package tags accounted for 88% of all claims. Premiumization claims (upscale,
gourmet, natural or organic) accounted for 60% of all claims, and health claims accounted
for 11.8%. Some health-oriented terms include no preservatives, high antioxidants, no transfat or no sugar. While the same five claims consistently ended up in the top 10 positions, the
high antioxidants claim went from last (No. 30) to No. 7 in 2006.
The report identified several trends that are making their way through the premium chocolate
sector, which can be utilized to push the segment as a whole forward.
- Microbatch So-called bean to bar chocolates focus on searching the world for unique
cocoa beans and making small batches with them. This in turn allows for greater control, as
well as greater innovation.
- Dark Milk & Upscale White There is resurgence in making milk chocolate chic. Dark milk
chocolate combines two benefits: milks ability to soften or round out the chocolate flavor
with the health benefits of dark chocolates antioxidants and lower sugar content. The sweetness of white chocolate is being matched with new add-ins, such as Divines White Chocolate
with Strawberries.
121

- Sustainability According to a survey by Information Resources, Inc., half of respondents


agreed that various environmental concerns were important to their purchasing decisions. Recently, several large chocolate companies like Cargill, Nestle and Mars joined various sustainability programs and initiatives to ensure environmental protection. Organic and free trade
chocolates are also seeing growth.
- Premiumitizing the Familiar Using flavors that are recognizable, often dessert-based, can
open up consumer palates to new flavors, such as Russell Stovers New York Cheesecake
Ganache and Doves Tiramisu bars.
- Exotic Flavors Out-of-context pairings are an alternative approach, like Vosges Mos
Bacon Bar, which utilizes applewood-smoked bacon, smoked salt and milk chocolate. Super
fruits are also making their way into premium chocolate bars.
- Exotic Functions Chocolate has long been known to sometimes help ones mood, but
health-wellness chocolate is new to the game. Adding omega fatty acids, lowering sugar
content and bringing in dietary fiber is making chocolate more of a multitasker.
- Ultra Dark Bars Cocoa levels exceeding 70% are becoming more common as more consumers now look for the cocoa content on the outside packaging. Lindt pushes the envelope
with its Lindt Excellence 99% Cocoa Bar.
- Filled Bars This seems to be a largely untapped sector of premium chocolates, and companies are advised to change that. Nielsen claims that only 1.5% of chocolate bars are filled,
but that 62% of consumers consider them their favorite kind of chocolate.

122

RESTAURANTS & FOODSERVICE

... In 2009 the restaurant and foodservice industry took a severe hit. As prices increased and
more consumers suffered from layoffs, eating out was one of the first things to be cut. The
trend became global, affecting eateries around the world. Restaurants and chains began to
close in large numbers and employees suffered the brunt of the downward trend.
RESTAURANT INDUSTRY OUTLOOK: FAST FOOD SEES GAINS, BUT STILL AT RISK
Restaurants now have a debt-to-equity ratio more than double that of 2006, with cash levels
dropping to a rate of 6.5% annually since 2004, according to a study by AlixPartners LLP. Only
the lower end of the market registered earnings and returns on investments. The study looked
at four main categories: fine dining, casual dining, fast-casual dining and quickservice restaurants.
Rising unemployment, low consumer confidence and weather conditions kept consumers from
frequenting restaurants in 2008, according to The NPD Groups Consumer Reports on Eating
Share Trends. For the quarter ending February 2009, foodservice traffic declined 1.5% from
the same quarter a year ago. For the second consecutive quarter in 2009, restaurant traffic
dipped below 2008 levels, as weekday visits declined. In contrast, weekend visits rose, reversing the trend of previous quarters. The quickservice segment experienced its first decline this
quarter since 2003, with customer counts down 1%, while spending for commercial foodservice
rose by 0.5%.
However, compared to other segments, the quickservice/fast food industry is thriving. Consumer expenditures on fast food rose significantly in the past few years, accounting for about
30% of all restaurant industry sales in 2008. Busy lifestyles, cost advantage and the increasing
demand for convenience food helped fuel popularity, according to RNCOS U.S. Fast Food Market Outlook 2010. The U.S. fast-food industry is expected to grow at a compound annual
growth rate of nearly 5% until 2010. Consumers are spending nearly half their food budget on
restaurants, with the fast food share continuously increasing.
Despite challenges, strong restaurants have acquisition and market-share opportunities, according to AlixPartners LLP. The group states that applying lean principles to all restaurant
operations may stave off some losses. Aggressively leaning-out costs at every level, including
in the supply chain, can definitely help restaurants deal with this current environment, stated
Andy Eversbusch, managing director of the company.
FOODSERVICE GENERALLY WEAK ACROSS THE GLOBE IN 2008
Among the effects of the worldwide economic downturn was fewer visits to foodservice outlets
across the globe, according to The NPD Group. The last half of 2008 was particularly weak for
global foodservice traffic, largely due to a sharp drop in demand in the fourth quarter.
According to NPDs CREST, which tracks commercial foodservice usage in France, Germany,
Japan, Spain, the UK, U.S. and Canada, and now China, restaurant traffic counts declined in
Japan and across Europe. Italy and Spain saw relatively steep traffic declines while the U.S.,
compared to other countries, was relatively resilient and ended the year slightly up from prior
years. Canada is an exception to the lackluster year for the global foodservice market.
While deals and promotions helped drive the small traffic growth at U.S. restaurants in 2008,
such value-oriented practices are largely unfamiliar in other countries, stated Bob OBrien,
senior vice president of global foodservice at NPD. Instead, other countries are much more
aggressive with product variety as an enticement to visit. The average eater check for the U.S.
was $6.34, $5.73 in Canada, $8.42 in Japan, $6.51 in the UK, $8.36 in France, $7.56 in Germany, $6.36 in Italy and $6.98 in Spain.
123

Restaurant Industry Food-and-Drink Sales Projections


For 2009
(Source: National Restaurant Association)
Projected F&D Sales ($000s)
2008
2009

% Chg.

Commercial Restaurant Services 1


Eating Places
Fullservice restaurants 2
Limited-service (quickservice) restaurants 3

$181,063,362

$182,873,996

$157,456,626

$163,754,891

4.0%

0.4%

$5,021,325

$4,940,984

-1.6%

-5.2%

Cafeterias, grill-buffets and buffets 4


Social caterers
Snack & nonalcoholic beverage bars
Total Eating Places
Bars & taverns
Total Eating-and-Drinking Places

1.0%

% Real
Growth
Chg.
-2.5%

$6,276,708

$6,402,242

2.0%

-1.6%

$20,088,885

$19,926,620

-0.8%

-4.4%

$369,906,906

$377,898,733

2.2%

-1.4%

$16,632,146

$17,097,846

2.8%

-0.4%

2.2%

-1.3%

$386,539,052

$394,996,579

Managed Services6
Colleges & universities

$11,912,863

$12,913,543

8.4%

4.5%

Manufacturing & industrial plants

$7,258,371

$7,373,927

1.6%

-2.0%

Primary & secondary schools

$5,255,883

$5,602,771

6.6%

3.0%

Recreation & sports centers

$4,752,369

$4,847,417

2.0%

-1.5%

Hospitals & nursing homes

$4,511,960

$4,818,773

6.8%

3.2%

Commercial & office buildings

$2,543,250

$2,606,831

2.5%

-1.1%

In-transit restaurant services (airlines)


Total Managed Services

$2,022,224

$1,949,523

-3.6%

-7.1%

$38,256,920

$40,112,785

4.9%

1.2%

$26,931,904

$27,551,338

2.3%

-1.2%

Lodging Places
Hotel restaurants
Other accommodation restaurants

$396,145

$398,522

0.6%

-3.0%

$27,328,049

$27,949,860

2.3%

-1.2%

Retail-host restaurants 7

$26,248,943

$27,590,792

5.1%

1.5%

Recreation & sports 8

$13,170,911

$13,331,844

1.2%

-2.3%

Vending & nonstore retailers 9

$10,844,637

$10,969,351

1.2%

-1.7%

$1,014,868

$1,013,671

-0.1%

-3.7%

$503,403,380

$515,964,882

2.5%

-1.0%

Total Lodging Places

Mobile caterers
Total Commercial Restaurant Services

Noncommercial Restaurant Services

10

Hospitals 12

$14,482,181

$15,114,014

4.4%

1.4%

Clubs, sporting & recreational camps


Nursing homes, homes for the aged, blind, orphans

$9,041,143

$9,091,877

0.6%

-2.9%

& the mentally & physically disabled 13

$7,200,391

$7,387,601

2.6%

0.3%

Colleges & universities

$5,811,296

$5,749,996

-1.1%

-5.3%

Public & parochial elem., second. schools

$5,916,285

$6,083,317

2.8%

0.8%

Transportation

$1,865,415

$1,852,595

-0.7%

-4.0%

Community centers
Employee restaurant services 11

$1,963,027

$2,057,252

4.8%

2.6%

Total Noncommercial Restaurant Services

$463,150

$442,686

-4.4%

-7.5%

$46,742,888

$47,779,338

2.2%

-1.0%

$1,397,245

$1,460,122

4.5%

1.0%

Military Restaurant Services 14


Officers & NCO clubs (Open mess)
Military exchanges

$629,532

$653,455

3.8%

0.2%

$2,026,777

$2,113,577

4.3%

0.8%

GRAND TOTAL $552,173,045

$565,857,797

2.5%

-1.0%

Total Military Restaurant Services

124

2008-2009 REGIONAL/STATE EATING-PLACE SALES


(Source: National Restaurant Association)

Eating Place
Sales, 2009
($ Million)

South Atlantic
Florida
Georgia
North Carolina
Virginia
Maryland
South Carolina
District of Columbia
West Virginia
Delaware

Pacific
California
Washington
Oregon
Hawaii
Alaska

East North Central


Illinois
Ohio
Michigan
Indiana
Wisconsin

Mid-Atlantic

$85,892,459

Mountain

$26,955,745
$14,150,384
$12,904,838
$11,487,626
$8,278,205
$6,385,824
$2,301,655
$2,032,313
$1,395,869

2.6%

West North Central

$76,165,212
$56,236,159
$9,463,415
$5,997,348
$3,245,435
$1,222,855

2.7%
2.6%
3.2%
3.2%
2.3%
3.2%

$63,193,071

1.9%

$18,800,107
$15,935,105
$12,553,615
$8,572,746
$7,331,498

2.4%
1.3%
1.7%
2.2%
2.2%

New England

$55,793,827

Maine
Vermont

New York

$27,795,102

Pennsylvania
New Jersey

$15,543,519
$12,455,206

2.1%
1.7%

$48,428,246

3.6%
4.0%
2.4%
2.5%
2.4%

Texas
Louisiana
Oklahoma
Arkansas

($ Million)

2.4%
1.8%
2.5%
2.9%
2.9%
2.8%
2.9%
3.0%
1.8%

1.6%
1.2%

West South Central

Eating Place % Chg.


Sales, 2009 From 08

% Chg.
From 08

$34,964,729
$5,912,141
$4,374,770
$3,176,606

$8,391,868
$8,679,558
$5,240,389
$3,004,581
$2,676,348
$1,751,132
$1,486,540
$754,984

3.2%
3.4%
3.2%
3.5%
2.8%
3.3%
2.9%
3.2%
2.7%

$27,020,924

2.2%

Missouri
Minnesota
Kansas
Iowa
Nebraska
South Dakota

$8,420,060
$7,709,251
$3,347,048
$3,448,499
$2,291,027
$1,018,009

2.0%
2.4%
2.2%
1.8%
2.8%
2.6%

North Dakota

$787,030

2.8%

$23,442,081
$11,788,189
$5,207,161
$2,089,688
$1,772,136

1.9%
1.8%
1.8%
2.8%
1.6%

$1,788,165
$796,742

2.0%
2.3%

$23,188,147

Colorado
Arizona
Nevada
Utah
New Mexico
Idaho
Montana
Wyoming

Massachusetts
Connecticut
New Hampshire
Rhode Island

East South Central

125

$31,985,400

Tennessee

$8,835,916

2.4%
2.4%

Kentucky
Alabama
Mississippi

$5,710,825
$5,639,928
$3,001,478

1.9%
2.9%
2.2%

TOP 20 BROADLINE DISTRIBUTORS


(Source: MyIDAccess' Top 50 Report)

Company
1 Sysco Corp.
2 U.S. Foodservice
3 Performance Food Group
4 Gordon Food Service
5 Reinhart Foodservice
6 Maines Paper & Food Service
7 Services Group of America
8 Ben E. Keith Foods
9 Shamrock Foods Co.
10 Labatt Food Service
11 Cheney Brothers Inc.
12 IFH Foodservice Distribution
13 Agar Supply Co.
14 Glazier Foods Co.
15 Conco Foodservice
16 Nicholas & Co., Inc.
17 Saladino's
18 Perkins
19 Cash-Wa Distributing Co.
20 Merchants Foodservice
Top 20 Sub-Total
Remaining Companies
TOTAL TOP 50

# of Distrib.
Centers

2008 Sales

2007 Sales

($ Millions)

($ Millions)

180
69
66
19
25
9
13
7
4
4
3
2
1
2
3
1
2
2
3
3
418
47
465

$37,850.0
$19,800.0
$10,200.0
$6,800.0
$3,599.0
$2,700.0
$2,650.0
$2,005.0
$1,700.0
$810.0
$787.0
$596.0
$551.0
$429.0
$420.0
$404.0
$387.0
$381.0
$343.0
$310.0
$92,722.0
$5,258.0
$97,980.0

$36,370.0
$20,000.0
$6,300.0
$6,200.0
$3,087.0
$2,071.0
$2,550.0
$1,639.0
$1,625.0
$675.0
$750.0
$545.0
$527.0
$343.0
$391.0
$367.0
$275.0
$387.0
$308.0
$234.0
$84,644.0
$4,761.0
$89,405.0

% Chg.
4.1%
-1.0%
61.9%
9.7%
16.6%
30.4%
3.9%
22.3%
4.6%
20.0%
4.9%
9.4%
4.6%
25.1%
7.4%
10.1%
40.7%
-1.6%
11.4%
32.5%
9.5%
10.4%
9.6%

FOODSERVICE INDUSTRY JOBS HARD HIT IN ECONOMIC DOWNTURN


On the last business day of January 2009, there were 246,000 job openings in the foodservice
and accommodation industries in the U.S., or a rate of 2.2%, according to the Bureau of Labor
Statistics. That is down 340,000 openings since the starting point of the downward trend in
September 2007.
Although the hiring rate of 4.8% for the same workers actually rose in January from 3.9% a
month earlier, the rate has also trended downward over the last 15 months. At 522,000 in
January, monthly hires was down 317,000 since the starting point of the downward trend in
October 2007 - a 38% decline.
... In order to have a chance of survival, restaurants were forced to make changes in order to
lure back customers. Many operators decided to step outside the box in order to redefine
brand images. Some added retail food space, in an effort to build traffic during the slower day
part and offer a convenience factor. Adding fresh produce and specialty and in-houseproduced non-alcoholic beverages to menus was another tactic operators used to inflate sales.
126

RECESSION FORCING RESTAURANTS TO INNOVATE


As the recession continues to take its toll on the restaurant industry, many companies are
launching innovative products that
potentially redefine what their
brands stand for. The financial crisis has brought with it a redefining
of boundaries, according to Hud(Source: MyIDAccess)
son Riehle, research chief at the National Restaurant Association. The Company
% Increase
industry has never faced a period of
113%
stress like this, stated Alan Hickok, Doerle Food Services
a veteran restaurant industry con- Performance Food Group
62%
sultant.

TOP 10 BROADLINER PERCENT


SALES INCREASES, 08 vs. 07

Innovations beyond a chains usual


offerings can build sales by helping
to incorporate variety into the
menu, thus effectively negating the
veto vote, or the one consumer in
a group who can stop or divert a
visit to an intended foodservice operator because they are not partial
to that particular operators menu,
reported USA Today (May 26). This
is even more important in tight economic times, when consumers who
eat out take on a one-size-fits-all
mentality, wanting to go to just one
place to satisfy the entire family or
groups needs, according to
Christopher Muller, director of the
Center for Multi-Unit.
RESTAURANTS INCORPORATE
RETAIL AND MARKET SPACE
INTO OPERATIONS

Saladino's

41%

Merchants Foodservice

32%

Maines Paper & Food Service

30%

Glazier Foods Co.

25%

Wood Fruitticher

23%

Ben E. Keith Foods

22%

Driscoll Foods

22%

Labatt Food Service

20%

TOP 10 BROADLINER DOLLAR


SALES INCREASES, 08 vs. 07
(Source: MyIDAccess)

$ Increase
Company

(Millions)

Performance Food Group

$3,900.0

A growing number of restaurants


are adding retail food space to their
operations with the hope of boosting incremental sales at a time
when consumers are dining at
home more often, according to Nations Restaurant News (Apr. 27).
These additional retail operations
boast the potential to build traffic
during less busy dayparts and appeal to consumer demand for convenience.

Sysco Corp.

$1,480.0

The owners of New Orleans-based

Merchants Foodservice

Maines Paper & Food Service

$629.0

Gordon Food Service

$600.0

Reinhart Food Service

$512.0

Ben E. Keith Foods

$366.0

Labatt Food Service

$135.0

Doerle Food Service

$120.0

Saladino's

$112.0

127

$76.0

Top 20 Full-Service Chains


(Source: R&I Top 400 2009)

Top 400
Rank

Chain

2008 Sales
($ Millions)

11
12
16
18
19
20
24
25
27
32
33
35
36
38
43
44
45
46
47
48

Applebee's
Chilli's Grill & Bar
Olive Garden
Outback Steakhouse
T.G.I. Fridays
Red Lobster
Denny's
Cracker Barrel
IHOP
Carl's Jr.
Golden Coral
The Cheesecake Factory
Chipotle Mexican Grill
Buffalo Wild Wings
Texas Roadhouse
Bob Evans
Hooters
P.F. Chang's
LongHorn Steakhouse
Waffle House

$4,700.0
$4,200.0
$3,070.0
$2,935.0
$2,700.0
$2,630.0
$2,400.0
$2,384.0
$2,200.0
$1,519.7
$1,518.0
$1,400.0
$1,332.0
$1,229.0
$1,148.6
$1,020.0
$1,010.0
$920.0
$884.5
$850.0

Cochon and Herbsaint restaurants added a


storefront called Butcher earlier this year,
where they sell artisanal meats, housemade salami, sausages and fresh steaks,
many of the same ingredients used in their
restaurants. Stephen Stryjewski, chef and
co-owner of Cochon, stated that he and his
partner, Donald Link, decided to open
Butcher in January 2009 in a separate space
next door. It was a natural progression to
[produce specialty meat] and sell it retail,
Mr. Stryjewski stated. Butcher is not only a
retail space, but also has seating for about
35 guests should they chose to eat-in. Most
of the shops dishes retail for less than $10,
and wine and beer are available by the
glass. Mr. Stryjewski claims that Butcher
alone has the potential for reaching $1 million in sales by the end of 2009.

At Greenlawn, NY-based Ruvo Restaurant, co-owner Jimmy DeNicola and his brothers decided
to open a market next door about four years ago when the space became available. Minor renovations were made to connect the restaurant and shop. The retail space offers freshly
butchered meats as well as pastas, desserts, takeout options and basics such as milk, eggs
and butter. The shop also offers the same sauces, raviolis, breads and meats served in the
restaurant. People have found it convenient. Now, with this economy, when people arent
going out as much, they can come here and pick up some chicken and some mashed potatoes,
and its like a home-cooked meal, stated Mr.
Top 20 Limited-Service Chains
DeNicola.
The Scottsdale, AZ-based restaurant Olive & Ivy
has a small marketplace where customers can
pick up the concepts signature flatbreads, pastries or gelato. The retail space was part of the
original design because the concept is located in
a mixed-use retail and residential area of the
Scottsdale waterfront. The retail space makes up
about 1,200-sq. ft. of the 9,000-sq. ft. space, and
both the marketplace and restaurant have separate entrances. At the marketplace, customers
may purchase breakfast or lunch, and gelato and
coffee is served until 10 p.m. The retail space
also incorporates a dine-in space. We believe the
retail side adds a lot of more interesting aspects
to the restaurant, more dayparts and creative
stuff, stated Sam Fox, president and CEO of Fox
Restaurants Concepts, operator of the Olive & Ivy
eatery. However, he adds, people can get a little
confused and they ask: Are you a restaurant? Are
you retail? Are you a market? Are you a morning
component? We have gelato and coffee and re128

(Source: R&I Top 400 2009)

Top 400
Rank

Chain

2008 Sales
($ Millions)

1
2
3
4
5
6
7
8
9
10
13
14
15
17
21
22
23
26
28
29

McDonald's
KFC
Burger King
Starbucks
Subway
Pizza Hut
Wendy's
Taco Bell
Domino's Pizza
Dunkin' Donuts
Sonic
Arby's
Jack in the Box
Chick-fil-A
Dairy Queen
Panera Bread
7-Eleven
Papa John's
Quiznos
Hardee's

$70,693.0
$17,800.0
$14,800.0
$13,500.0
$12,900.0
$10,400.0
$9,200.0
$6,900.0
$5,513.0
$5,500.0
$3,811.1
$3,200.0
$3,070.0
$2,962.0
$2,500.0
$2,500.0
$2,500.0
$2,262.4
$2,000.0
$1,820.5

tail wine. We have a lot going on.


For operators considering the addition of
a retail aspect to their restaurant, Mr.
Fox recommends starting small. For us,
the restaurants so busy and you spend
a lot of energy on the retail side of it, but
it doesnt necessarily generate enough
revenue to demand 100% of your attention.

KIDS MENUS OUTDATED, HEALTHY OPTIONS SOUGHT


Despite mounting health and obesity concerns, the average kids
menu does not offer enough variety or healthy food, revealed
Mintel Menu Insights, a tracker of restaurant menu trends. Chicken
fingers consistently account for 10% of kids menu items, followed
by grilled cheese sandwiches, macaroni & cheese and burgers, according to Mintel, which analyzed kids menus from 2005 to the
present. Other top kids menu items include hot dogs, pizza and
corn dogs.
Our research shows parents want more nutritious options for their
kids, and children are open to fruits, veggies and healthier versions
of standard fare, stated Maria Caranfa, RD and director of Mintel
Menu Insights. The generic kids menu really doesnt meet the
needs and desires of todays families.

Los Angeles-based Joans on Third


blends retail and restaurant but was orig- Only three in 10 parents claim their children eat healthfully at
inally designed as a market to compli- restaurants, though 77% of children are open to ordering foods
ment a catering operation. Initially, the with vegetables and 86% would order fruit-containing items.
eatery began after owner Joan McNamara Some restaurants are beginning to address the call for healthier options on kids menus. Although french fries are still the most comput a few tables in the market to accom- mon side (offered with 66% of kids menu items), fruits and
modate customers who wanted to eat on vegetables have gained popularity (now at 43% and 39%, respecthe spot. Gradually, Joans on Third grew tively). Also, rice and salad (18% each) are appearing as kids side
options, according to Mintel. Recent innovations in healthier kids
into a caf serving signature omelets, menu items include Bob Evansgrilled chicken strips with a fresh
sandwiches and soups amid the shelves garden salad, Burger Kings fresh apple fries and Elephant Bar
of gourmet food products, cheeses, Restaurants tropical citrus salad with chicken, noted Ms. Caranfa.
salami, pastries and desserts. While
catering sales slowed somewhat in the current economic climate, Ms. McNamara claims the
market-cafs sales are steady.
RESEARCH REVEALS OPPORTUNITIES FOR FRESH PRODUCE IN FOODSERVICE
There are many opportunities to use fresh produce on restaurant menus. Restaurant operators
see fresh produce as a way to differentiate themselves from the competition. Nearly three out
of four restaurant operators (72%) claim that emphasizing fresh produce in their marketing
efforts drives more customers to their restaurant. In addition, 46% of operators, including
78% of fine dining operators, claim to look for fresh produce items that their customers cannot
buy at a local supermarket, according to research conducted by the National Restaurant Association in co-operation with Produce
Top 10 Fast-Casual Chains By
Marketing Association
(PMA) and presented
Sales Growth
at PMAs 2009 FoodSource: Technomic's 2009 Top 100 Fast Casual Chain Restaurant Report
service Conference &
2008 Sales
2007 Sales
Growth
Exposition as part of a
(millions)
(millions)
(millions)
Chain
joint research project
1 Panera Bread/St. Louis Bread Co.
$2,612.3
$2,248.5
$363.8
that also included In2 Chipotle
$1,275.5
$1,056.5
$219.0
3 Panda Express
$1,180.0
$1,030.0
$150.0
ternational Foodser4 Five Guys Famous Burgers & Fries
$302.0
$190.0
$112.0
vice
Distributors
5
Zaxby's
$664.0
$563.0
$101.0
Association.
Further,
67%
of
restaurant operators
stated that they wish
they had more op-

6
7
8
9
10

Qdoba Mexican Grill


El Pollo Loco
Wingstop
Moe's Soutwest Grill
Jason's Deli

$447.5
$627.0
$255.4
$350.0
$470.0
129

$380.0
$578.0
$206.6
$302.0
$425.0

$67.5
$49.0
$48.8
$48.0
$45.0

tions regarding fresh produce


selections, while 60% of operators wish there was more information
on
how
to
incorporate
fresh
produce
on
(Source: Technomic 2009 Top 500 Chain Restaurant Report)
their menu. Some 41% claim
2008 U.S.
2007 U.S.
they expect to serve more
% Chg.
Sales ($000) Sales ($000)
Rank Company
fresh produce in the next two
$70,000 *
$37,000 *
89.2%
1
Buffalo Wings & Rings
years, while 56% claim they ex2
Salad Creations
$35,000 *
$19,500 *
79.5%
pect to serve about the same
3
Pinkberry
$95,000 *
$58,000 *
63.8%
amount. Restaurant operators
4
Tilted Kilt
$40,000 *
$25,000 *
60.0%
also look at sourcing of fresh
5
Which Wich?
$36,750
$23,000
59.8%
produce, with 77% stating they
*Technomic Estimate
prefer to purchase domestically grown produce and 56% of operators serve locally-grown produce in their restaurants.
Food safety remains a top priority for restaurant operators when it comes to fresh produce.
Some 89% of operators claim they are willing to pay more for their fresh produce if its safety
is guaranteed, while 76% claim they are willing to pay more for fresh produce if it is traceable
to the beginning of the supply
chain.
Chains Ranked By Increase

Chains Ranked By %
Increase In Sales

In Sales Volume

NON-ALCOHOLIC DRINKS
RAISING THE BAR FOR BEVERAGES AT RESTAURANTS

(Source: Technomic 2009 Top 500 Chain Restaurant Report)


Rank
1
2
3
4
5

Company
Subway
McDonald's
Burger King
Starbucks
Jack in the Box

2008 U.S. Sales


2007 U.S.
($000)
Sales ($000)
$8,200,000
$9,600,000
$30,025,000
$28,750,000
$9,125,000
$8,560,000
$8,750,000
$8,185,000
$3,172,800
$2,880,000

$ Chg.

Many eateries are looking to$1,400,000


ward specialty and in-house$1,275,000
produced
non-alcoholic
$565,000
$565,000
beverages to spike sales. With
$292,800
carbonation equipment being
relatively inexpensive, chefs,
sommeliers and mixologists are using their skills to concoct beverages that will raise their
nonalcoholic ranges to the same level as their food, wine, sprits and beer offerings, reported
Nations Restaurant News (Oct. 27, 2008).
For example, at Nantucket, MA-based American Seasons restaurant, sommelier Orla MurphyLascola is producing in-house beverages such as lavender soda. Inspired by the restaurants
house-infused lavender vodka,
the non-alcoholic soda has become a favorite among customers. At New York-based banh
mi sandwich shop Num Pang, co(Source: Technomic 2009 Top 500 Chain Restaurant Report)
owner Ben Daitz produces his
2008 U.S. 2007 U.S.
% Unit
# Chg.
own lemonade as a way to ensure
Units
Units
Rank Company
Chg.
quality. We want to make every1
Subway
21,881
21,195
686
3.2%
2
Dunkin' Donuts
6,395
5,775
620
10.7% thing that we can in-house be3
Starbucks
11,537
11,168
369
3.3% cause when we can control the
4
Little Caesars
2,500
2,241
259
11.6% process from beginning to end, it
comes out better, Mr. Daitz
Panera Bread/St.
1,325
1,167
158
13.5% stated.
5
Louis Bread Co.

Chains Ranked By
Increase In Units

130

... In the food industry, the trend of making offerings more healthy has swept the board. In
response, operators fighting for sales and traffic decided to implement stricter nutritional
guidelines. While New York City kicked off the trend of requiring all food establishments to
publically post nutritional content, many eateries decided to take it a step further and succumb
to health organization pressure to lower salt content. Making childrens menus healthier was
a related move, as well as making operations more green. However, some operators halted
eco-friendly efforts in order to save money.
CHAINS IMPLEMENT LOW-SALT PRE-EMPTIVE MEASURES

Chain

A number of U.S. health organizations, including the New York City Department of Health and
Mental Hygiene, are increasing pressure on restaurants and foodservice
Emerging Full Service Italian Chains
manufacturers to lower foods salt
2008 Sales and % Change
(Source: 2009 Technomic Top 500 Restaurant Chains)
content, and several businesses are
taking it upon themselves to change
24.8%
menu items pre-emptively, reported
Brio Tuscan Grille
Nations Restaurant News (Mar. 9).
$151
For example, in February 2009
18.8%
Dennys reduced the amount of salt
Il Mulino
in its hash browns by 25%. It also cut
$57
salt in its cheese sauce and shrimp
28.6%
skewers by 20% and 25%, respecRotelli Pizza
Pasta
tively. Changes were also made to
$36
the chains kids menu and Grand
Sales (in millions)/Percent change vs. 2007
Slam items.
*Technomic Estimate

Yum! Brands Inc.s KFC and Pizza Hut


operations, as well as Burger King and Au Bon Pain, introduced low-salt initiatives. In the UK,
KFC reduced salt by 85 tons a year and tested reduced-sodium products in Australia. In South
Korea, Pizza Hut is using cheese with 25% less sodium as well as pepperoni and meat toppings
with 40% less sodium. Burger King reduced the sodium in its Kids Meals to no more than 600
milligrams each.
In addition to New York, city health departments in Los Angeles, Chicago, Seattle and the District of Columbia, as well as counties in North Carolina, Pennsylvania, Tennessee, Maine, Massachusetts and Michigan, are exploring ways restaurants and packaged-food industries can
aid in lowering the publics sodium conTop Full Service Italian Chains
sumption. The New York department is
2008 Sales and % Change
intending to reduce the salt content of
(Source: 2009 Technomic Top 500 Restaurant Chains)
menu items by 20% over five years and
50% over 10 years.
10.2
Olive Garden

Romano's
Macaroni Grill

Chain

[The New York health department] must


understand the challenges we face as an
industry, stated Sheila Weiss, nutrition
policy director for the National Restaurant Association. This isnt something
that can happen overnight. Restaurant
companies will have to work with consumers and suppliers to determine what
reductions will be satisfactory. There

Carrabba's
Italian Grill

Johnny Carino's
Italian
Maggiano's
*Technomic Estimate

131

$3,172
-12.2
$660
-3.4
$681
-0.3%
$394
2.8%
$370

Sales (in millions)/Percent Change vs. 2007

Top Full Service Italian Chains


2008 Units and % Change
(Source: 2009 Technomic Top 500 Resturant Chains)

Olive Garden
Romano's
Macaroni Grill

Chain

also needs to be recognition of


what already has been done. In
reaction, Michael Jacobson, executive director for the Center for
Science in the Public Interest,
stated, companies can simply
compare nutrient levels of the
products offered by different suppliers, or they could tell their suppliers that they need to provide
samples containing varying reductions in sodium and then improving taste through other means.

Carrabba's Italian
Grill
Johnny Carino's
Italian
Maggiano's

6.8%
664
-9.0%
212
0.0%
238
-1.8%
165
4.9%
43

Units/Percent Change vs. 2007

*Technomic Estimate

NOT ALL RESTAURATEURS GIVING GREEN LIGHT TO GREEN INITIATIVES


The harsh economic climate spurred some restaurateurs to rethink how much they can spend
on environmental initiatives. While more operators claim they would like to boost their ecofriendly efforts, many are postponing green-related investments as they struggle to stay in
business, reported Nations Restaurant News (Feb. 9).
Burgerville, the environmentally minded quick-service chain based in Vancouver, WA, re-evaluated its efforts, but decided not to reduce its eco-friendly business plan, according to Jeff
Harvey, president and chief executive of the 39-unit chain. Our analysts found that the impact
to our guest count and brand would have been far costlier if wed changed, explained Mr.
Harvey.
The downturn in the economy has made some of the initiatives more difficult to maintain at
a fine-dining restaurant
in New York City, noted
Top 20 Independent Restaurants, 2008
Source: Restaurants and Institutions
Con Ed Carlos Suarez,
Avg. Dinner
Sales
owner-operator
of
Seats
Meals Served
Location
($ Millions)
Check
BOBO. Our renewableTao Las Vegas Restaurant &
1
Las Vegas
$68.4
500
$72.00
785,000
Nightclub
energy program costs
$34.2
1,500
$66.00
476,899
NYC
2 Tavern on the Green
us 20% more than stan$28.8
480
$65.00
320,000
Miami Beach, FL
3 Joes Stone Crab
$28.6
420
$88.00
387,000
dard
service.
Our
NYC
4 Smith & Wollensky
$24.4
335
$74.00
385,000
NYC
5
Tao
Asian
Bistro
monthly electric bill is
$23.3
505
$24.00
800,000
Washington DC
6 Old Ebbitt Grill
in the $2,000 to $3,000
$21.6
384
$78.00
237,898
NYC
7 Buddakan
$20.8
230
$63.00
335,899
Chicago
8 Gibson's Bar Steakhouse
range, so annually its
Joe's Seafood, Prime Steak
Chicago
9
about $30,000, added
$20.5 *
335
$68.00 *
410,000 *
& Stone Crab
Mr. Suarez. Although
Joe's Seafood, Prime Steak
10
Las Vegas
$20.3 *
384
$68.00 *
400,000 *
& Stone Crab
the restaurant operator
$20.1
510
$45.00
421,519
Lake Buena Vista, FL
11 Fulton's Crab House
$19.5 *
has had to cut cost re250
$90.00 *
190,000 *
Las Vegas
12 Mix
$19.5 *
284
$100.00 *
170,000 *
13
Las Vegas
SW
Steakhouse
lated to eco-friendly ini$19.4 *
700
$83.00 *
270,000 *
NYC
14 Sparks Steak House
tiatives, Mr. Suarez
$19.2
750
$35.00
652,991
Wheeling, IL
15 Bob Chinn's Crab House
$18.9 *
138
$105.00 *
155,000 *
Miami Beach, FL
16 Prime One Twelve
noted it would not keep
$17.9 *
433
$65.00 *
300,000 *
Las Vegas
17 Rumjungle
him from pursuing the
$17.9
176
$138.00
129,548
Las Vegas
18 Prime Steakhouse
green initiatives he
$17.8 *
250
$136.00 *
140,000 *
Miami Beach, FL
19 Devito South Beach
$17.3
150
$144.00
138,790
NYC
20 21 Club
could afford.
*Restaurant & Institutions estimate

132

Some quick-service chains, including


Arbys, Carls Jr., Chipotle Mexican Grill
and Subway, are moving ahead with
(Source: 2009 Technomic Top 500 Restaurant Chains)
green initiatives. Arbys broke ground
13.7%
in February on its first Leadership in EnFogo de Chao
ergy and Environmental Design, or LEED,
$108
certified green restaurant. The Magno18.6%
lia, TX unit opened in April. CKE RestauTexas de Brazil
rants Inc., parent of Carls Jr., opened a
Churrascaria
$102
green flagship restaurant in Carpinteria, CA. The unit features solar reflective
57.1%
Santa Fe Cattle
roofing material that reduces heat abCo.
$53
sorption, a rainwater reuse system, an
Sales (in millions)/Percent change vs. 2007 electronically controlled energy management system, and a catalyst that converts charbroiler particulate into carbon dioxide and water, thus reducing smoke, odors and
emissions. Chipotle Mexican Grill has a
Emerging Full Service Mexican Chains
partially wind-powered store in Gurnee,
2008 Sales and % Change
IL with an interior design composed of
(Source: 2009 Technomic Top 500 Restaurant Chains)
recycled drywall and recycled barn metal.
DiPasqua Enterprises, a Subway fran20.0%
chisee, opened its first LEED-certified
Cantina Laredo
$78
restaurant in Kissimmee, FL, reported
Nations Restaurant News (Feb. 18).
Chain

Emerging Full Service Steak Chains


2008 Sales and % Change

... Specific chains and segments reacted


to the downturn in different ways, to
varying degrees of success and failure.
Offered here is a brief snapshot, with examples that can be used as a deterrent
or role model.

Chain

*Technomic Estimate

3.4%
Posados Caf
$46
3.6%
Uncle Julio's
$45.6

Sales (in millions)/Percent change vs. 2007

*Technomic Estimate

SMALL CHAINS USE ECONOMIC SITUATION AS OPPORTUNITY TO GROW

Top Full Service Steak Chains


2008 Sales and % Change

Chain

(Source: 2009 Technomic Top 500 Restaurant Chains)


Outback
Steakhouse

-6.0%

Texas
Roadhouse

14.5%

LongHorn
Steakhouse

4.0%

Logan's
Roadhouse

2.4%

Ruth's Chris

*Technomic Estimate

$2,478
$1,150
$871
$548
-9.5%
$460

Sales (in millions)/Percent Change vs. 2007


133

While the tough economy is hitting


larger food chains hard, smaller, more
flexible chains are using the situation
as an opportunity to grow, according
to QSR Magazines 10 Under 300,
which profiles food chains with under
300 stores and ranked by fiscal 2007
annual sales (Jan. 5). Another boon to
small business is that many small
chains focused on managed growth
and customer satisfaction long before
the economy hit the skids. Being
small also help keep you close to your
staff, explains Reggie Orchid, chief
support officer for the No. 1 chain

Jasons Deli. Listening to customers desire for healthier foods, affordable portions as well as
customer satisfaction puts these small chains in a good position to expand in the future.
1 Jasons Deli, $427 million Locations are open on both sides of the country. The menu
is mostly high fructose corn syrup-free.
2 In-N-Out, $400 million While the menu has not changed at all since 1995, and not much
since it was created in 1948, the chain continues to do most work by hand beef [is] ground
by company butchers. Lettuce is hand-tornpotatoes for French fries are hand-cut in the
store. Slow expansion is the companys goal.
3 Fuddruckers, $320 millionIn addition to its five core burger patties (ostrich, buffalo,
turkey, veggie and salmon), the chain introduced cookies with zero trans fat, a Lighter Options
menu and lightened up its self-service topping bar.
4 Baja Fresh Mexican Grill, $315 millionWith a new owner in 2006, the chain has since
opened up a new concept, Baja Fresh
Expressa new concept [that] handles
Top Full Service Mexican Chains
orders from start to finish in less than
2008 Sales and % Change
four minutes.
(Source: 2009 Technomic Top 500 Restaurant Chains)
On the Border
Chevy's Fresh
Mex

Chain

5 McAlisters Deli, $307 million Focusing on fast growth is this companys


strategy, opening almost 40 restaurants since 2007. Menu items include
paninis and a Caf menu, as well as a
combo meal for $5.99.

El Torito

-0.1%
$460
-7.7%
$263
-2.2%
$225

9.8%
6 Pei Wei Asian Diner, $242 milAbuelo's
$130
lion Using silverware, heavy-gauge
-2.5%
napkins and china definitely sets this
El Chico Caf
$117
chain apart from the usual fast food
Sales (in millions)/Percent Change vs. 2007
restaurant, which also uses intense
market research in order to tailor both
the restaurant and the menu to local tastes. Menu offerings have been reduced to focus on
core items with high volume.
*Technomic Estimate

7 Taco Cabana, $239.1 million Found mostly in Texas, the 153-unit chain plans to reduce
capital spending in 2009 and slow down unit growth due to the sluggish economy.
8 Au Bon Pain, $217 million The chain introduced its Portions line of 14 pre-made 200
calorie or less items in March 2008, which now accounts for 2% of sales. And while the company opened locations in Kuwait and Dubai in 2008, it plans on staying close to home to reduce costs in the future.
9 Taco Bueno, $196.2 million An expanded flame-grilled menu and low fat sides helped
the chain entice health-conscious consumers into its stores. It also teamed up with Cellfire
Inc. to offer mobile discount offers.
10 Eatn Park, $185 million While the chain only owns 76 units, its menu of Black Angus
burgers, freshly baked buns and gluten-free items put the Pennsylvania-based chain on the
list. Only going as far as a 200-mile radium from its base, the chains remodeling effort is an
attempt to bring back to old but in a new way.

134

Top Full Service Steak Chains


2008 Units and % Change
(Source: 2009 Technomic Top 500 Resturant Chains)
Outback
Steakhouse

Chain

Texas Roadhouse
Longhorn
Steakhouse
Logan's Roadhouse
Ruth's Chris
Steakhouse

0.1%
796
10.2%
314
6.4%
314
16.0%
196
0.9%
107

Units/Percent Change vs. 2007

*Technomic Estimate

Emerging Full Service Varied Menu Chains


2008 Sales and % Change
(Source: 2009 Technomic Top 500 Restaurant Chains)

Chain

Carolina Ale
House

Buffalo Wings &


Rings

Wow Caf &


Wingery

32.8%
$38.5
89.2%
$70
53.8%
$75.5

Sales (in millions)/Percent change vs. 2007

*Technomic Estimate

Top Full Service Varied Menu Chains


2008 Sales and % Change
(Source: 2009 Technomic Top 500 Restaurant Chains)
Applebee's

Chain

Chili's Grill & Bar


T.G.I. Friday's
Ruby Tuesday
The Cheesecake
Factory
*Technomic Estimate

0.3%
$4,503
6.2%
$3,960*
-7.5%
$1,960
-11.0%
$1,545
6.1%
$1,398

Sales (in millions)/Percent Change vs. 2007

135

CHICKEN CHAINS COMPETING WITH BURGERS, OTHER OUTLETS


The economic downturn has had a mixed
effect on chicken chains. Chick-fil-A,
Raising Canes Chicken Fingers and
Zaxbys experienced double-digit U.S.
sales growth in 2008, reported The Dallas Morning News (July 23). However,
fast-food chicken sales grew at a slower
pace than six other restaurant segments,
according to Technomic.

Emerging Limited Service Chicken Chains


2008 Sales and % Change
(Source: 2009 Technomic Top 500 Restaurant Chains)
23.6%
Wingstop

Chain

$255

Some of the large players have underperformed, but there are pockets of
growth, stated Bob Goldin, Technomics
executive vice president. Its not going
away, but its not setting the world on
fire. There are several reasons that some

Raising Cane's
Chicken Fingers

15.0%
$69*

Sales (in millions)/Percent change vs. 2007

*Technomic
Estimate

(Source: 2009 Technomic Top 500 Restaurant Chains )

Chain

Chick-fil-A
Popeye's Chicken & Biscuits
Church's Chicken
Zaxby's

$148*

Pollo Campero

Top Limited Service Chicken Chains


2008 Sales and % Change

KFC

14.6%

-1.0%
$5,095*
12.2%
$2,962
0.6%
$1,593*
1.1%
$882*
17.9%

chicken vendors are not seeing sales


growth, one being new competition.
All the major [fast-food] players have
gotten into chicken, stated Mr.
Goldin. The burger chains especially.
Every new menu item in the last couple
years has been chicken-based. Between early 2006 and early 2009, the
number of chicken items added to
non-chicken chains grew 13%, according to Maria Caranfa, director of Mintel
Menu Insights. By comparison, beef
items grew 5%.

$664*

Mr. Goldin also believes that chicken


on the bone tends to be more for dinner, making it more difficult to attract consumers for breakfast and lunch. One of the biggest
drawbacks, however, is perception.
Top Limited Service Chicken Chains
Its high in fat, stated Mr. Goldin.
2008 Units and % Change
Its a deep-fried food. To a certain
(Source: 2009 Technomic Top 500 Resturant Chains)
extent, its not perceived as being
good for you.
-0.4%
*Technomic Estimate

Sales (in millions)/Percent Change vs. 2007

KFC

Popeye's Chicken
& Biscuits

Chain

To combat these issues, Chick-fil-A


is adding more elements from casual dining restaurants, such as
fresh flowers on tables and fresh
ground pepper. The company saw
U.S. sales jump 12.2% in 2008 and
experienced a 4.6% increase in
same-store sales.

Chick-fil-A

Church's Chicken

Boston Market

5,235
-0.8%
1,571
6.2%
1,423
0.3%
1,200*
-8.3%
550

Units/Percent Change vs. 2007

*Technomic Estimate

136

Emerging Limited Service Hamburger Chains


2008 Sales and % Change
(Source: 2009 Technomic Top 500 Restaurant Chains)
10.5%
Farmer Boys

Chain

$94*

Five Guys Burgers


& Fries

Culver's Frozen
Custard

58.9%
$302*
9.1%
$643

Sales (in millions)/Percent change vs. 2007


*Technomic Estimate

Top Limited Service Hamburger Chains


2008 Sales and % Change
(Source: 2009 Technomic Top 500 Restaurant Chains)
McDonald's

Chain

Burger King
Wendy's
Sonic Drive-Ins
Jack in the Box

4.4%
$30,025*
6.6%
$9,215*
3.7%
$8,110*
3.6%
$3,817*
2.2%
$3,080*

Sales (in millions)/Percent Change vs. 2007


*Technomic Estimate

Top Limited Service Hamburger Chains


2008 Units and % Change
(Source: 2009 Technomic Top 500 Resturant Chains)
McDonald's

Chain

Burger King
Wendy's
Sonic Drive-Ins
Jack in the Box

0.1%
13,958
-2.7%
7,178*
-0.3%
5,921
4.1%
3,505
1.0%
2,158

Units/Percent Change vs. 2007


*Technomic Estimate

137

Emerging Limited Service Other Sandwich


Chains 2008 Sales and % Change
(Source: 2009 Technomic Top 500 Restaurant Chains)
18.9%

Penn Station East


Coast Subs

$255
21.0%

Lenny's Sub Shop

Chain

$151
27.1%

Potbelly
Sandwich

$145*
59.8%

Which Wich?

$138*

Sales (in millions)/Percent change vs. 2007

*Technomic Estimate

Top Limited Service Other Sandwich Chains


2008 Sales and % Change
(Source: 2009 Technomic Top 500 Restaurant Chains)

Subway

Chain

Arby's
Quiznos Sub
Jimmy John's
Jason's Deli

17.1%
$9,600
-2.4%
$3,225*
-0.5%
$1,886*
28.6%
$496
10.6%
$470*

Sales (in millions)/Percent Change vs. 2007

*Technomic Estimate

Top Limited Service Other Sandwich Chains


2008 Units and % Change
(Source: 2009 Technomic Top 500 Resturant Chains)

Subway

Chain

Quiznos Sub
Arby's
Blimpie Subs &
Salads
Jimmy John's
*Technomic Estimate

3.2%
21,881
-6.4%
4,342
1.6%
3,603
-11.6%
1,090
27.8%
808

Units/Percent Change vs. 2007


138

Top Full Service Varied Menu Chains


2008 Units and % Change
(Source: 2009 Technomic Top 500 Restaurant Chains)

Applebee's Neighborhood Grill & Bar

Chain

Chili's Grill & Bar


Ruby Tuesday
T.G.I. Friday's
The Cheesecake Factory

0.6%
1,887
4.1%
1,312
-1.0%
884
-0.7%
596
4.3%
145

Units/Percent Change vs. 2007

*Technomic Estimate

Emerging Limited Service Bakery Cafe Chains


2008 Sales and % Change
(Source: 2009 Technomic Top 500 Restaurant Chains)

Chain

Paradise Bakery &


Caf

Sandella's
Flatbread

30.7%
$115
10.0%
$82.5
26.2%

Le Pain Quotidien
$53
*Technomic
Estimate

Sales (in millions)/Percent change vs. 2007

Top Limited Service Bakery Cafe Chains


2008 Sales and % Change
(Source: 2009 Technomic Top 500 Restaurant Chains)
Panera Bread/Saint Louis Bread
Co.

Chain

Einstein Bros. Bagels


Au Bon Pain
Corner Bakery Caf
Atlanta Bread Co. Bakery Caf

*Technomic Estimate

16.2%
$2,612
10.6%
$392*
6.8%
$307
18.0%
$233
-10.9%
$137

Sales (in millions)/Percent Change vs. 2007


139

Top Limited Service Bakery Cafe Chains


2008 Units and % Change
(Source: 2009 Technomic Top 500 Restaurant Chains)
Panera Bread/Saint Louis Bread Co.

13.5%
1,325

Chain

Einstein Bros. Bagels

Au Bon Pain

Atlanta Bread Co. Bakery Caf

Corner Bakery Caf

8.3%
496
0.5%
184
-11.3%
110
15.3%
113

Units/Percent Change vs. 2007

*Technomic Estimate

Emerging Limited Service Beverage Chains


2008 Sales and % Change
Source: 2009 Technomic Top 500 Restaurant Chains

Chain

Coffee Bean &


Tea Leaf

Robeks Fruit
Smoothies

17.5%
$131
21.1%
$57.5
9.1%

Dutch Bros.
$42
*Technomic
Estimate

Sales (in millions)/Percent change vs. 2007

Top Limited Service Beverage Chains


2008 Sales and % Change
(Source: 2009 Technomic Top 500 Restaurant Chains)

Starbucks

Chain

Jamba Juice
Caribou Coffee
Peet's Coffee &
Tea
Smoothie King

*Technomic Estimate

6.9%
$8,750
3.9%
$473*
1.8%
$269*
23.0%
$230
7.8%
$145

Sales (in millions)/Percent Change vs. 2007


140

Top Limited Service Beverage Chains


2008 Units and % Change
(Source: 2009 Technomic Top 500 Restaurant Chains)
Starbucks

Chain

Jamba Juice

Caribou Coffee

Smoothie King
Peet's Coffee &
Tea

3.3%
11,537
3.1%
729
5.6%
511
13.2%
541
11.2%
188

Units/Percent Change vs. 2007

*Technomic Estimate

Emerging Limited Service Mexican Chains


2008 Sales and % Change
(Source: 2009 Technomic Top 500 Restaurant Chains)

Chain

Panchero's
Mexican Grill

Bajo Mexican
Grill

19.5%
$4,600

47.8%
$36,500

14.0%
Taco Maker

$57,000

Sales (in millions)/Percent change vs. 2007


*Technomic Estimate

Top Limited Service Mexican Chains


2008 Sales and % Change
(Source: 2009 Technomic Top 500 Restaurant Chains)
Taco Bell

Chain

Chipotle
Del Taco

2.1%
$6,180*
20.7%
$1,275
1.9%
$560*

Qdoba Mexican
Grill

17.8%

Moe's Southwest
Grill

15.9%

*Technomic Estimate

$447*
$350*

Sales (in millions)/Percent Change vs. 2007


141

PANERA FINDS SUCCESS IN DOWNTURN BY ESCHEWING VALUE PROMOTIONS


Despite the current economic downturn, Panera Bread, which has some 1,400 stores and
serves about six million people daily. We dont offer a lower-end strategy, stated Panera
Bread CEO Ron Shaich, who is focusing on tweaking things he wants Panera to do better. In
a world where everyone is cutting
Top Full Service Mexican Chains
back, we want to give more, not
2008 Units and % Change
less.
(Source: 2009 Technomic Top 500 Resturant Chains)
On the Border

Chain

Chevy's Fresh Mex


El Torito
Abuelo's
El Chico Caf
*Technomic Estimate

-3.6%
160
-3.0%
96
0.0%
79
5.1%
41
2.9%
72

Units/Percent Change vs. 2007

Recently, Mr. Shaich was able to improve the freshness of Paneras lettuce by cutting time from field to
plate in half, reported USA Today
(July 23). The executive also improved the freshness of the companys breads by opting to bake
them fresh throughout the day instead of in the early morning. Now,
Mr. Shaich wants firmer noodles in
Paneras chicken noodle soup.

The company introduced a $7.59


chopped cobb salad and tested a $16.99 lobster sandwich featuring a half-lb. of lobster meat
in 50 stores in the Northeast, all while many other restaurant chains are focusing on value
promotions, according to The Wall Street Journal (Aug. 18). In fact, while most of the world
seems to be focused on the Americans who are unemployed, Mr. Shaich is focused on the
90% that are still employed. Paneras target customer is 25 to 50 years old, earning $40,000
to $100,000 a year.

Chain

The chain has seen its samestore sales increase in the first
Top Limited Service Mexican Chains
27 days of its latest quarter. Its
2008 Units and % Change
results contrast with those of
(Source: 2009 Technomic Top 500 Resturant Chains)
many other casual-dining chains,
-0.6%
which have been posting negaTaco Bell
5,588
tive same-store sales, due partly
19.4%
Chipotle
to declining traffic and lower800
priced food. Some found that dis0.8%
Del Taco
counting has not only hurt
510
margins, but failed to lure as
Qdoba Mexican 10.2%
many customers as hoped. For
Grill
454
example, Brinker International
2.9%
Moe's Southwest
Grill
Inc. tried a promotion offering
394
smaller portions of menu items
Units/Percent Change vs. 2007
for under $7 at its Chilis Grill &
Bar chain; when Brinker reported
earnings, it stated diners did not consider the deal a good value. Items also being tested at
Panera include: a chicken salad with sliced grapes and almonds; a low-cal Power Breakfast
sandwich and Power Smoothie; mac n cheese and oatmeal. Imagine if we could serve you
the same kind of turkey that you get off the turkey breast at Thanksgiving. Were working on
it, stated Mr. Shaich.
*Technomic Estimate

142

DRIVE-INS DRIVE THROUGH TO PROFITS


For foodservice establishments, it is all about the experience, and nostalgia is an important
consumer emotion to take advantage of as the economy continues to slow. The market for
drive-ins is slowly expanding nationwide with new prototype stores and classic feel with modern conveniences. While the sector itself draws comfort from the 1950s, these drive-ins are
designed to cater to a modern consumer: one who craves convenience, control or even a moment of peace, according to Nations Restaurant News. Building a drive-in restaurant is oftentimes cheaper than a traditional model, due to the fact that the store itself can be smaller
as most customers stay in their car.
Sonic Corp. is one of the few companies using this type of restaurant, and now has more than
3,500 units nationwide. The company sees drive-ins as a unique concept that offers a point
of differentiation within the quick service segment by putting the customers in control, stated
senior vice president of development Drew Ritger. The way Sonic offers consumers its food
is also a trend that is gaining popularity, where patrons can order anything off the menu anytime. Pricing is also important, as the company rolled out its Happy Hour, half price drinks
and Slushies, as well as a $1 value menu. Some stores still offer the carhop service where the
customer stays in the car and is served, which preserves some of the brands drive-in experience. Meanwhile, competitor A&W Restaurants, owned by Yum! Brands, is testing a new
store prototype with the Three Ds combin[ing] a drive-in with a drive-thru and dine-in
restaurant. According to president Ben Butler, units that offer the drive-in option tend to do
better than those without, mostly because of the offer of convenience. Meanwhile, Raving
Brands newest concept, Uncle Fattys, a new take on the American drive-in opened in Raleigh,
NC this past summer. The restaurant will offer sandwiches, salads, chargrilled burgers, fries
and woodfired pizza, according to The Atlanta Journal-Constitution.
Nostalgia plays a major part in these types of restaurants, and some take advantage of it,
noted Nations Restaurant News. A&W stores have a history of promoting the brand with
local vintage car clubs, linking the brand with the reminiscence for the 1950s era. For Rubys
Five Points Drive Ins first location, scheduled to open in Anaheim, CA in June, servers will
wear roller skates, and car diners will be able to watch vintage film clips from the glory days
of drive-in restaurants. The experience that these restaurants provide is quite unique, and
plays to a major consumer group baby boomers.
...While 2009 was a dim one for the industry, the year comes to a close on a more positive
note. A slight rise in sales has been recorded. As the economy begins to balance itself out,
consumers are making their way back to restaurants, albeit slowly. While the dining-out boon
of previous years is a long way off, the change is enough to give the industry reason to hope.
SLIGHT UPTICK IN EATING & DRINKING PLACE SALES
With sales totaling $40.1 billion in July, the nations eating and drinking places posted their
largest year-over-year increase since January up 1.9%. Most of that gain, however, appeared
to come from limited service (including fast-food) outlets, which saw July sales rise 2.6%, comparable to gains posted earlier this year, according to Food Institute estimates.
Many foodservice operators, particularly in the casual dining segment, have been aggressively
promoting value meals to increase traffic. Apparently this has been somewhat successful but
has not added much, if anything, to their top line sales.

143

Meanwhile, restaurant industry units in the U.S. are down 1%, or about 4,000 units, from spring
2008, according to The NPD Groups Spring 2009 Recount. Major chains with 500 or more
units grew 1%, while midsized chains with between 100 and 499 units and all other systems,
including independents, declined. Its clear that independent restaurants and smaller chains
have been most impacted by the slower economy, stated Susan Kleutsch, director, product
development-foodservice at NPD. The recession appears to have weeded out restaurants performing poorly prior to the economic downturn. In terms of restaurant unit counts by U.S.
Census regions, the hardest hit was the West North Central Census Region, where units declined by 2% compared to last spring. Unit counts were flat in the East South Central, West
South Central, Mountain and Pacific regions.

144

Emerging Limited Service Pizza Chains


2008 Sales and % Change
(Source: 2009 Technomic Top 500 Restaurant Chains)
19.6%
Marco's Pizza

$92
23.5%
Famous Famiglia

Chain

$71*
36.1%
Zpizza

$49*
50.9%
Straw Hat Pizza

$40

Sales (in millions)/Percent change vs. 2007

*Technomic Estimate

Top Limited Service Pizza Chains


2008 Sales and % Change
(Source: 2009 Technomic Top 500 Restaurant Chains)
3.9%

Pizza Hut

$5,300*
-4.9%

Chain

Domino's Pizza

$3,037*
3.2%

Papa John's

$2,033
13.4%

Little Caesars

$1,055*
2.6%

CiCi's Pizza

$585*

Sales (in millions)/Percent Change vs. 2007

*Technomic Estimate

Top Limited Service Pizza Chains


2008 Units and % Change
(Source: 2009 Technomic Top 500 Resturant Chains)
Pizza Hut

Chain

Domino's Pizza

Papa John's

Little Caesars
Papa Murphy's
Take 'N Bake Pizza

1.3%
7,564
-1.7%
5,047
1.2%
2,792
11.6%
2,500*
5.8%
1,118

Units/Percent Change vs. 2007

*Technomic Estimate

145

VENDING

... As seen in the Food Processing chapter of this report, overall snacking has been on the
rise as consumers seek comfort foods during the tough economic situation, and vending
machines and companies stand to benefit from the increase. While not-so-healthy snacks
are gaining favor, companies should consider the fact that eventually consumers will return
to more healthy snacking, and preparing for that now would be wise. This is also essential
as more cities, as well as USDA, regulate unhealthy foods in vending machines in schools
and businesses. Diversifying between sweet and salty snacks as well as microwaveable
meals is a smart way to have multiple options for customers.
VENDING FACES DIFFICULT TIMES DUE TO ECONOMY, NUTRITION RESTRICTIONS
Predictably, 2008 was a tough year for the vending industry, as well as the food industry as
a whole, and 2009 does not promise any improvement given the continuing increase in account downsizing and decrease in consumer confidence, according to Automatic Merchandisers State of the Vending Industry Report. Total industry revenue for 2008 stood at
$22.05 billion, almost 5% below 2007s $23.21 billion and almost 10% less than the 10-year
high of $24.49 billion in 2000. Rising unemployment as well as the shifting in American
jobs from blue collar to white collar affected the vending industry enough to disrupt a fiveyear growth trend. Some experts claim that the vending industry may have a negative consumer perception, which convenience stores and fast food chains have taken advantage of.
Operators were forced to respond to the economic downturn, which included raising prices.
While it was less difficult to do so in 2008 because consumers came to expect higher prices,
these end-users also were not as accepting of the increases, even when similar products
were priced higher in
other retail channels.
Categorical Breakdown of Vending Sales, 2008
So-called consumer buySource: Automatic Merchandiser
ing angst limited vending operators from
Ice cream
Cigarettes
1.4%
0.6%
raising prices as much as
Other
3.8%
other retail channels. AnMilk
other tactic operators
1.6%
used to draw in conCold Beverages
sumers despite higher
28.5%
OCS
4.9%
prices was diversification
and expanding into new
services, which was cited
Hot beverages
4.4%
by 21% of respondents. A
large amount of these operators spread out into
areas outside the refreshVend food
5.8%
ment services area, such
as Office Coffee Sevices
(OCS), cited by 24%. The
health and wellness secCandy, snacks,
tor was another method
confections
of diversifying, but as the
19.1%
economy fell, saving
Manual food service
30.0%
money became more of a
Total Sales: $22.05 Billion
priority. At the same
146

FOOD SALES AT VENDING


Source: Automatic Merchandiser

Projected Revenues
(in millions)

% Chg.

% of Sales
2008

2007

-13.4%
-6.8%
7.1%

25.0%
58.0%
17.0%

27.0%
58.0%
15.0%

$1,653.0
$4,928.0
$33.0

2.2%
-7.5%
-45.5%

27.0%
72.6%
0.3%

25.0%
74.5%
0.5%

$446.2
$38.8
$101.8
$40.2
$111.5
$33.9
$111.5
$19.4
$65.4

$483.8
$42.9
$110.5
$43.4
$121.1
$35.1
$116.1
$28.4
$64.7

-7.8%
-9.6%
-7.9%
-7.4%
-7.9%
-3.4%
-4.0%
-31.7%
1.1%

46.0%
4.0%
10.5%
4.1%
11.5%
3.5%
11.5%
2.0%
6.8%

46.3%
4.1%
10.6%
4.1%
11.6%
3.4%
11.1%
2.7%
6.0%

Milk
Dedicated Milk
Cold beverage
Refrigerated food

$52.5
$100.0
$197.5

$66.8
$118.7
$185.5

-21.4%
-15.8%
6.47%

15.0%
28.0%
57.0%

18.0%
32.0%
50.0%

Ice Cream
Combination food/ice cream
Old style, 3- and 4- select
Dedicated, new-style multiproduct
Dual temperature machine

$150.0
$30.0
$120.0
$10.0

$163.6
$34.8
$139.2
$10.4

-8.3%
-13.8%
-13.8%
-3.8%

47.0%
10.0%
40.0%
3.0%

47.0%
10.0%
40.0%
3.0%

2008

2007

$320.0
$740.0
$220.0

$369.6
$794.0
$205.4

$1,690.0
$4,560.0
$18.0

Hot Beverage
Fresh-brew regular
Fresh-brew decaf
Fresh-brew specialty/flavored
Freeze-dried regular
Freeze-dried specialty
Tea
Hot chocolate
Soup
Other

Food
Freshly Prepared
Frozen
Shelf Stable
Cold Beverage
Can
Bottle
Cup

time, more schools and government agencies continued to enact nutrition restrictions. The
only better-for-you item that drove sales was bottled water, which more consumers are buying less of out of concern for the environment and some states are considering taxing.
Cold Beverages
Most vending operator agreed that they faced a price barrier with 20-oz. bottles in 2008
and were unable to match the price points being charged by competing retail outlets. Because of this, vending machines that offered cans saw a gain in share of sales although
prices did not increase. 2008 also marked the first time cans gained share while bottles
lost share for the first time in four years. It was excellent timing for operators, as cans offered a better price One in 10 U.S. workers are snacking more
during the day due to concerns about the
for consumers looking to save money while some gov- economy, according to a survey by Caernment agencies applied taxes to bottles that did not reerBuilder.com conducted by Harris Inaffect cans.
teractive. Some 12% buy lunch from a
Overall, cold beverage prices rose more than any product segment in 2008 except for candy and snacks.
147

vending machine at least once a week.


Two-thirds claim they snack at least once
a day, including 24% who snack twice a
day, reported Reuters (Apr. 29).

2008 also saw the first ever


# of New Candy/Snack/Confection Products
decline in the total number
Introduced To Vending
(Source: Automatic Merchandiser)
of cold beverage machines,
250
while glassfront beverages
machines saw a slight increase. Bottled water ac200
counted for 19.7% of liquid
refreshment volume, compared to 19.3% in 2007, ac- 150
cording to Beverage Digest.
Energy drinks are among
100
the highest prices beverages that vending opera50
tors offer. With prices
sometimes over $2, energy
drinks represent one of the
0
few categories that could
2005
2006
2007
have such a high price
point and still see some growth, although not as much as in previous years.

2008

Candy, Snacks and Confectionary


As previously mentioned, this category saw the highest price increases out of all vending
product sectors, driven by manufacturer price hikes. And while consumers often see this
candy as an affordable indulgence, snack items were more often replacing candy as price increases went too high for consumers. Also, in recent years, snack manufacturers have introduced more products that fit in candy spirals. Fourteen of the top 15 placement gainers
in 2008 were salty snacks and one was a cookie. Candy sales fell 8.8% in 2008, following a
1.4% drop in 2007 and a 0.1% drop in 2006. Baked goods saw a double-digit volume gain
as more operators stocked them, while the number of candy items stocked in machines fell
6.8 percentage points in 2008.

CANDY/SNACK/CONFECTIONARY PRODUCTS
GAINING THE MOST DISTRIBUTION IN 2008
Source: Automatic Merchandiser
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15

Frito-Lay 2.25-oz. Fritos


Frito-Lay 2.25-oz. Rold Gold Tiny Twisters
Frito-Lay 1.76-oz. Cheetos Crunchy
Frito-Lay 1.5-oz. Ruffles Works
Frito-Lay 2-oz. Cheetos Crunchy Jalapeno Cheddar
Frito-Lay 1.5-oz. Sunchips Harvest Cheddar
Frito-Lay 1.9-oz. Ruffles Thick Cut Baked Potato Chips
Kellogg/Keebler 2-oz. Cheez-It Original
Snak King 1.5-oz. El Sabroso Salsitas Tortilla
Frito-Lay 1.5-oz. KC Masterpiece Barbeque
Inventure Group 1.75-oz. Cheddar & Bacon Potato Skins
Kraft Nabisco 1.75-oz. Planters Peanuts
Kellogg/Keebler 2-oz. Famous Amos Chocolate Chip Cookie
Frito-Lay 0.975-oz. Munchos
Mr. Nature 2-oz. Unsalted Trail Mix
148

Snack items offers consumers a


wide range of price points, as
larger sizes could still be offered
for less than $1, while large confections could not. Many operatorsdid not feel confident about
offering confections priced over
$1.00. In addition, many operators were not convinced that a
large consumer demand exists for
large size confections. Following
the same trend, so called nutrition snacks also saw a decline in
2008 as consumers choose
cheaper options.
Hot Beverages, Vend Food
The hot beverage sector saw one
of the biggest declines in 2008,

TOP 15 VENDED REFRIGERATED FOOD PRODUCTS*


Source: Automatic Merchandiser/Vendchannel
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15

Product
Oscar Mayer Turkey Cheddar Lunchables
Oscar Mayer Ham and Cheddar Lunchables
Oscar Mayer Ham and Swiss Lunchables
Nesquik Chocolate Milk
Nesquik Strawberry Milk
Oscar Mayer Nacho Regular Lunchables
Oscar Mayer Bologna and American Lunchables
Nesquik Chocolate Milk Shake
Nesquik Strawberry Milk Shake
Yoplait Strawberry Yogurt
Yoplait Strawberry/Banana Yogurt
Yogurt Cherry Fruit on Bottom
Yogurt Strawberry Fruit on Bottom
Yogurt Strawberry/Banana Fruit on Bottom
Oscar Mayer Fun Pack Pepperoni Pizza Lunchables

Company
Kraft Foods
Kraft Foods
Kraft Foods
Nestle
Nestle
Kraft Foods
Kraft Foods
Nestle
Nestle
General Mills
General Mills
Dannon
Dannon
Dannon
Kraft Foods

continuing a longterm trend that reflects the fallout of


large industrial locations that have always been the
mainstay of hot drink
vending machines.
The vend food segment did not fare
much better, the decline driven also by
the reduction of
large work sites.

Fiscal 2008 also saw


the first decline in
the number of frozen
*According to 2008 dollar sales.
food machines, possibly attributed to many schools removing them due to nutritional restrictions, as these machines often hold ice cream. The decade-long trend of the declining numbers of
refrigerated machines continued in 2008, while frozen-prepared and shelf-stable machines
gained slightly at the expense of freshly-prepared food. Vend food is also facing more
competition from fast food chains and conveniences stores for meal purchases; c-store
foodservice sales rose 7.7 points.
Milk
Milk sales fell for the first time in several years in 2008, mostly due to the fact that the number of milk machines decreased, from 56,000 in 2007 to 53,000 in 2008, a fall of 5.4%.
Most vended milk is sold in refrigerated food machines as opposed to dedicated milk machines and cold
drink machines.
TOP 15 VENDED FROZEN FOOD PRODUCTS*
Only 15% of milk is
Source: Automatic Merchandiser/Vendchannel
sold through dediProduct
Company
cated machines ac1 White Castle Twin Cheeseburger
White Castle Distributing
counting for $52.5
2 Big AZ Beef Charbroil with Cheese
Pierre Foods
million, compared
3 Buffalo Style Wings
Pierre Foods
to the $197.5 mil4 Mini Beef Tacos
Don Miguel
lion sold in refriger5 Hot Pockets Pepperoni Pizza
Nestle
ated machines.
6 Fast Choice Double Beef Stacker with Cheese
Pierre Foods
Most milk ma7 Bacon Cheeseburger
Pierre Foods
chines are still
8 Oscar Mayer Lunchables Turkey & Cheddar
Best Express Foods
9 Big Az Bubba Twin Chili Dogs with Cheese
Pierre Foods
found in schools,
10 Hot Pockets Ham & Cheese
Nestle
amusement loca11 Sausage Twin Biscuit
Jimmy Dean Foods
tions and industrial
12
A-1
Chopped
Beefsteak
Sandwich
Pierre
Foods
sites, but popula13 Tony's Pepperoni Pizza
Schwan Foods
tion drops have
14
Jumbo
Cheeseburger
Pierre
Foods
made some of
15 Tony's Supreme Pizza
Schwan Foods
these locations un*According to 2008 dollar sales.
profitable. Milk
149

vending in secondary schools dropped from 24% in 2007 to 16% in 2008, according to the
Milk Processor Education Program.
Ice Cream
Ice cream took the biggest hit of all categories measured in 2008, [posting] a double-digit
sales drop due to the reduction in the number of frozen food machines. The number of
dedicated ice cream machines in 2008 stood at 58,770, a decrease of 6.4% from 2007s
62,770. Meanwhile, the average ice cream product rose five cents in 2008 to $1.20.
VENDING PURCHASING TRENDS ANALYZED
Some 40% of adults purchased items from a vending machine in the past week and 25% purchased from a vending machine in the past 24 hours, according to a study conducted by
Leo J. Shapiro & Associates commissioned by Automatic Merchandiser (Feb. 4). Fewer than
10% of adults have made no vending purchase during the course of a year. About 75% of
vending consumers were brand specific in their choice, with the number rising to 80% for
cold drinks, noted Elliot Maras, editor of Automatic Merchandiser magazine.
In fact, consumers are increasingly turning to vending machines instead of foodservice
restaurants. Six in 10 respondents who acknowledge spending more over the past year on
vending claim they are typically choosing vending instead of other foodservice alternatives.
About 82% of respondents found the vending experience to be equal or superior to an instore purchase. Notably, almost 25% claimed that their vending purchases were fresher than
they would have been in a store, whereas about 60% stated they detected no difference.
Vending operators will find that by building on an established equity, convenience, they
can weather the current recession and improve profitability over the longer term, when the
current recession ends, noted the report.
VENDING INDUSTRY MUST UPGRADE TO IMPROVE SALES
Slumping profits are forcing vending machine operators to focus on reducing costs, but
changes in consumer habits indicate that a cost-based approach will prevent operators from
maximizing
sales, accordVending Sales by Category
ing to AutoSource: Automatic Merchandiser
matic
Sales (in millions)
Merchandiser
% Chg.
Category
2008
(February
2007
2006
2005 08 vs. 07
(Projected)
2009). Todays
Manual foodservice
$6,620.0 $6,960.0 $6,760.0 $6,570.0
-4.9% consumer is
Cold beverages
$6,280.0 $6,610.0 $6,420.0 $6,350.0
-5.0% interested in
Candy/snacks/confections
$4,190.0 $4,410.0 $4,300.0 $4,160.0
-5.0% minimizing
Vend food
$1,280.0 $1,370.0 $1,350.0 $1,360.0
-6.6% purchases and
OCS
$1,080.0 $1,070.0 $1,010.0
$980.0
0.9% one-stop shopHot beverages
$970.0 $1,040.0 $1,030.0 $1,050.0
-6.7% ping. That
Other
$840.0
$880.0
$850.0
$830.0
-4.5% being said,
only 6.5% of
Milk
$350.0
$370.0
$360.0
$350.0
-5.4%
vending conIce cream
$310.0
$350.0
$330.0
$330.0
-11.4%
sumers buy
Cigarettes
$130.0
$140.0
$130.0
$130.0
-7.1%
from vending
150

NUMBER OF VENDING MACHINES


BY CATEGORY
Source: Automatic Merchandiser

Category
Food Machines
Refrigerated
Frozen
Heated
Ambient
Food Systems
(pizza, popcorn, french fries)

Total
Cold Beverage Machines
Can closed front
Bottle closed front
Combo bottle/
Can close front
Glassfront
Cup
Total

Number of Machines
2007
2008

% Chg.

135,000
53,300
1,300
800

137,000
57,300
1,500
800

-1.5%
-7.0%
-13.3%
0.0%

3,100

3,300

-6.1%

193,500

199,900

-3.2%

974,000
1,030,000

1,000,000
1,030,000

-2.6%
0.0%

machines as a complete meal


and 10.2% buy from vending
machines as part of a meal, indicating that vending machines
are mostly used for snacking.
At the same time, prepared
food offerings at convenience
stores, thought to be the vending machines closest rival,
jumped from 5.7% to 6.8% of
in-store sales from 2006 to
2007, according to the National
Association of Convenience
Stores.

In recent years, the convenience store channel invested


378,000
378,000
0.0%
aggressively in foodservice pro180,000
153,000
17.6% grams, and food manufacturers
0
0
0.0%
point out that convenience
2,562,000
2,561,000
0.0%
stores invested in improving
Candy/Snack/Confections
1,320,000
1,328,760
-0.7%
food quality, variety, freshness
338,000
341,000
-0.9% and offerings to better suit
Hot Beverages
53,000
56,000
-5.4% consumer interest. Most prodMilk
58,770 *
62,770 **
-6.4% uct manufactures believe that
Ice Cream
vending operators could also
* Of 53,300 frozen food machines in 2008, 40,121 are included in this number
improve food sales by investing
** Of 57,300 frozen food machines in 2007, 44,121 are included in this number
in these areas. Operators who
are focused on minimizing product costs are not managing their machines according to
consumer preference. Vending operators should be aware that while vending machines
demonstrate an overall importance to work-site related consumer purchases, more must be
done to ensure that they are offering what the consumer is looking to purchase. An Automatic Merchandiser consumer survey shows that 47.7% of consumers purchase one snack
and one beverage at a time from vending machines. Since most consumers make more than
one vending purchase at a time, it would stand to reason that machines offering multiple
purchases in both the food and beverage categories would improve customer satisfaction.
Further, an increase in health awareness has resulted in consumer demand for better for
you products. Some 75.8% of consumers seek better for you products at vending machines, with 45.7% seeking to purchase low calorie or low fat snacks. Keeping this in mind,
vendors should expand their healthy snack offerings in order to peak consumer interest.
Overall, offering variety is key in the vending channel. New technologies offer opportunities
for vending operators to better understand customer needs. Most industry specific software
packages include category management tools that help identify the best selling items in
each product category; however, the average vending operation does not utilize the available software. With data software such as wireless telemetry provides, vendors will be able
to adjust their product offerings according to consumer preference every time the machine
is serviced.
By understanding individual location needs, operators can maximize sales and will then be
151

better equipped to focus on point-of-sales merchandising and offer special product promotions to rival those offered in the convenience store channel. In vending, you cant do two
for $2, explained Brad Bachtelle, president of Bachtelle & Associates. One of the most positive points of the vending channel is that it acts as a sampling vehicle for products. Because
most vending machines offer only single-serve products, consumers can try a new product
with minimal risk. Paul Schlossberg, former director of marketing and national accounts at
Frito Lay Inc., recalls that vending accounted for a large percentage of the pilot purchases
for some of Frito-Lays most successful products. According to Mr. Bachtelle of Bachtelle
and Associates, the best thing about vending is its paid sampling. It is a very effective
means. This paid sampling gives smaller brands the chance to test their products and potentially become nationally recognized by consumers.
Proving that the vending channel is also a medium for testing new technologies, The CocaCola Company launched a test of interactive-touch screen beverage vending machines in
Simon Malls of the Southeast U.S. in early 2009. The new machines incorporate sight,
sound and motion video to take the vending experience from transaction to true interaction, stated Anthony Phillips, global brand manager, The Coca-Cola Company. PepsiCo
began testing in April 2009 a climate-friendly vending machine in Washington, DC. The machine uses less energy, is cooled using carbon dioxide and generates 12% less greenhouse
gas emissions than current vending machines.

152

CANDY/SNACKS/CONFECTION SALES
Source: Automatic Merchandiser

08 Proj. Revenues
(in millions)
$1,396.0
$991.0
$57.0
$33.0
$311.0
$2,793.0
$100.0
$5.0
$33.0
$25.0
$3.0
$25.0
*
$865.0
$8.0
$62.0
$6.0
$2.0
$54.0
$52.0
$116.0
$8.0
$8.0
$261.0
$140.0
$91.0
$3.0
$228.0
$136.0
$91.0
$29.0
$26.0
$5.0
*
$61.5
*
$3.0
$1.0
$53.0
*
*
$1,503.0
$225.0
$415.0
$21.0
$124.0
$56.0
$444.0
*
$150.0
$65.0

Confections
Chocolate candy
Gum
Mint/hard roll
Non-chocolate/toffee
Snacks
Nutrition Snacks
Breakfast bar
Fruit snacks
Granola bars
Rice cakes
Trail mix
Functional bars
Baked Goods
Cakes/brownies
Cereal snacks
Crme-filled cakes
Danish
Donuts/gems
Honey buns
Misc. (Poptarts)
Muffins
Pies
Regular cookies
Sandwich cookie
Sweet rolls
Unfilled cakes
Cracker
Regular crackers
Sandwich crackers
Food Snacks
Meat snacks
Meat and cheese
Misc. food snacks
Nuts & Seeds
Almonds
Cashews
Mixed nuts
Peanuts
Pumpkin seeds
Sunflower seeds
Salty Snacks
Cheese curls
Corn/tortilla chips
Onion rings
Miscellaneous
Popcorn
Potato chips
Potato sticks
Pretzels
Snack mix
* Negligible, NA: Not Applicable
153

% Chg.
08 vs. 07

% of 08
Sales

-3.0%
-0.4%
-20.4%
-14.6%
-5.7%
2.9%
-4.5%
-30.5%
-8.6%
-0.1%
-38.0%
16.3%
182.6%
10.1%
-24.3%
10.9%
39.3%
16.7%
49.3%
-6.2%
9.4%
38.0%
-9.8%
-3.0%
20.6%
30.9%
80.4%
-5.9%
-3.7%
-9.2%
51.9%
-12.5%
-39.4%
303.2%
-8.0%
154.2%
-20.6%
38.5%
-7.9%
10.8%
-13.9%
0.8%
-0.9%
0.2%
-30.2%
-14.8%
0.3%
16.9%
-54.6%
-12.1%
2.1%

33.3%
23.7%
1.4%
0.1%
7.4%
66.7%
2.4%
0.0%
0.8%
0.1%
0.0%
0.1%
0.0%
20.7%
0.0%
1.5%
1.5%
0.0%
1.3%
1.3%
2.8%
0.0%
0.0%
6.3%
3.4%
2.2%
0.0%
5.5%
3.3%
2.2%
0.0%
0.0%
0.0%
0.0%
1.5%
0.0%
0.0%
0.0%
1.3%
0.0%
0.0%
35.9%
5.4%
9.9%
0.5%
2.9%
1.4%
10.5%
0.0%
3.6%
1.6%

DEMOGRAPHICS OF CONSUMER
FOOD SPENDING

Explanations About the Consumer Expenditure Survey and Its Categorical Breakdowns
(based on information from the Bureau of Labor Statistics)
What is the Consumer Expenditure Survey?
The Consumer Expenditure Survey, conducted by the U.S. Census Bureau for the Bureau of Labor Statistics, consists of two components: a diary (or record
keeping survey) completed by participating consumer units for two consecutive 1-week periods; and an interview survey, in which expenditures of consumer units
are obtained in five interviews conducted at 3-month intervals. Results are based on integrated data from both surveys.
Each component of the survey queries an independent sample of consumer units that is representative of the U.S. population. For the Diary Survey, about 7,500
consumer units are sampled each year, for a total of 15,000 diaries per year (7,500 x 2 diaries per 2 week period). The interview sample, selected on a rotating
panel basis, surveys about 7,500 consumer units each quarter. Each consumer unit is interviewed once per quarter, for 5 consecutive quarters. Data are collected
on an ongoing basis in 102 areas of the U.S.

Starting with the 2004 tables, the Consumer Expenditure Survey implemented multiple imputation of income data. In previous years, the survey only published
income data collected from complete income reporters. It should be noted, however, that even complete income reporters do not always provide information on
all their sources of income. Imputation allows income to be estimated when it is not reported. Because of this new system, data from 2004 are not strictly
comparable to data from previous years. For example, in 2003 nearly 16% of consumer units are defined to be incomplete reporters. Income imputation allows
expenditure data for these consumer units to be included in income categories from which they were previously excluded. To the extent that the incomplete
reporters have demographic characteristics or expenditure patterns different from those of the complete income reporters who were previously assigned to these
categories, averages for demographic characteristics and annual expenditures will change. As a result of imputation, average annual estimates for these
expenditures in 2004 may be substantially different from, and not strictly comparable to, estimates for previous years.

Definitions:
Age - The age of the reference person.
Average Number of Persons - The number of persons whose usual place of residence at the time of the interview is in the sample unit.
Complete income reporters - Complete Income Reporters were the source of income data prior to the 2004 tables, at which time all missing income data for all
income variables were imputed and used in income calculations. The distinction between complete and incomplete income reporters was based, in general, on
whether the respondent provided values for major sources of income, such as wages and salaries, self- employment income, and Social Security income. Even

154

The Interview Survey is designed to capture expenditure data that respondents can reasonably recall for a period of 3 months or longer. In general, the
expenditures are relatively large, such as automobiles, major appliances, and expenditures that occur on a regular basis. The Diary Survey is designed to capture
expenditures on small, frequently purchased items that normally are difficult for respondents to recall. Integrated data from the Bureau of Labor Statistics Diary
and Interview Surveys provide a complete accounting of consumer expenditures and income that neither survey alone is designed to do.

complete income reporters may not have provided a full accounting of all income from all sources for all members of the consumer unit. Prior to 2004, across-theboard zero income reporting was designated as invalid, and the consumer unit was categorized as an incomplete reporter.
Composition of consumer unit - The classification of interview families according to: (1) relationship of other family members to the reference person; (2) age
of the children of the reference person; and (3) combination of relationship to the reference person and age of the children. Step children and adopted children are
included with the reference persons own children.
Consumer unit - A consumer unit comprises either: (1) all members of a particular household who are related by blood, marriage, adoption, or other legal
arrangements; (2) a person living alone or sharing a household with others or living as a roomer in a private home or lodging house or in permanent living
quarters in a hotel or motel, but who is financially independent; or (3) two or persons living together who use their income to make joint expenditure decisions.
Financial independence is determined by the three major expense categories: housing, food, and other living expenses. To be considered financially independent,
at least two of the three major expense categories have to be provided entirely, or in part, by the respondent.

Expenditures - The transaction costs, including excise and sales taxes, of goods and services acquired during the interview or recordkeeping period. Expenditure
estimates include expenditures for gifts, but exclude purchases or portions of purchases directly assignable to business purposes. Also excluded are periodic
credit or installment payments on goods or services already acquired. The full cost of each purchase is recorded, even though full payment may not have been
made at the date of purchase. The order of the expenditures listed here follows the order of presentation in published Consumer Expenditures tables. The major
expenditure categories are Food, Housing, Apparel and Services, Transportation, Health Care, Entertainment and Other Expenditures.
Education of reference person - The number of years of formal education of the reference person, based on highest grade completed. If enrolled at the time of
the interview, the grade being attended is recorded.
Housing tenure - The familys principal place of residence during the survey. Owner includes families living in their own homes, cooperatives or
condominium apartments, or townhouses. Renter includes families paying rent as well as families living rent free in lieu of wages.
Income - The combined income of all consumer unit members (14 years of age or over) during the 12 months preceding the interview.
Pre-Tax Income - The total money earnings and selected money receipts during the 12 months prior to the interview date.
Metropolitan Statistical Areas (MSAs) - A large population nucleus, together with adjacent communities which have a high degree of economic and social
integration with that nucleus. These are defined by the Office of Management Budget as a standard for Federal agencies in the preparation and publication of
statistics relating to metropolitan areas.
Occupation - Refers to the occupation in which the reference person received the most earnings during the survey period. The occupational categories follow
those of the Census of Population. Categories shown in the reference table include the following:
Self-employed - Encompasses all occupational categories; the reference person is self-employed in own business, professional practice, or farm

155

Earner - A consumer unit member, 14 years of age or older, who reported having worked at least 1 week during the 12 months prior to the interview date.

Wage and salary earners


Managers and professionals - executives, administrators, and managers; and professional specialties, including architects, engineers, natural and social
scientists, lawyers, teachers, writers, health diagnosis and treatment workers, entertainers and athletes.
Technical, sales, and clerical workers - technicians and related support workers; sales representatives, sales workers, cashiers, and sales related occupations;
and administrative support, including clerical.
Service Workers - private household workers, protective services, food preparers, health services, cleaning and building services, and personal service
occupations.
Precision production, craft and repair workers - mechanics and repairers, construction trades, extractive occupations, and precision production occupations.
Operators, fabricators, and laborers - machine operators and assemblers, transportation workers, handlers and laborers, and farming, forestry, and fishery
workers.
Retired
Retired persons who did not work either full- or part-time during the survey period. All others, including not reporting
A residual including unemployed persons; those working without pay; those not working due to illness, going to school, or caring for others; and those not
reporting their occupational status.

Race - The race of the reference person of the consumer unit. Families are included in three racial groups, Black or African American, Asian, and White and All
Other Races. The Other group comprises such races as Native Americans, Alaskan natives, and Pacific Islanders, and those reporting more than one race.
Reference person - The first member mentioned by the respondent when asked to Start with the name of the person or one of the persons who owns or rents the
home. It is with respect to this person that the relationship of the other consumer unit members is determined.
Regions - Data are presented for four major regions: Northeast, Midwest, South, and West. Consumer units are classified by region according to the address of
the family during the time of their participation in the survey.
Northeast - Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island and Vermont.
Midwest - Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota and Wisconsin.
South - Alabama, Arkansas, Delaware, District of Columbia, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South
Carolina, Tennessee, Texas, Virginia and West Virginia.
West - Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington and Wyoming.
Rural population - All persons living outside of a Metropolitan Statistical Area (MSA) and within an area with a population of less than 2,500 persons.
Size of the consumer unit - The number of persons whose usual place of residence at the time of the interview is in the sample unit.
Urban population - All persons living in MSAs and in urbanized areas and urban places of 2,500 or more persons outside of MSAs. Urban, defined in this
survey, includes the rural populations within an MSA.

156

Population - The total civilian non-institutional population of the United States as well as that portion of the institutional population living in the following group
quarters: Boarding houses, housing facilities for students and workers, staff units in hospitals and homes for the aged, infirm, or needy, permanent living quarters
in hotels and motels, and mobile home parks. Excluded are military personnel living on military bases and nursing home residents.

Food Category Definitions


Food at Home - The total expenditures for food at grocery stores (or other food stores) & food prepared by the consumer unit on trips. It excludes the purchase
of nonfood items.
Cereals and Cereal Products - Ready-to-eat and cooked cereals, pasta, flour, prepared flour mixes & other cereal products such as cornmeal, cornstarch and
rice.
Bakery Products - Bread, crackers & cookies, biscuits and rolls, cakes, cupcakes, bread and cracker products, pies, tarts, sweet rolls, coffeecakes, doughnuts, as
well as other frozen and refrigerated bakery products such as cookies, bread, cake dough and cake batter.
Beef - Ground beef, roasts, steaks, veal & other cuts of beef, excluding canned beef.
Pork - Bacon, pork chops, ham (including canned), roasts, sausage and other cuts of pork.

Poultry - Fresh and frozen chickens & other fresh & frozen poultry (Cornish hens, turkey, duck, etc.).
Fish and Seafood - Canned fish & seafood & fresh or frozen finfish & shellfish.
Eggs - Fresh eggs, as well as powdered eggs & egg substitutes.
Fresh Milk and Cream - Fresh whole milk & other fresh milk such as buttermilk & fresh cream (including table cream, whipping cream, fresh sour cream &
fresh sour cream dressing.)
Other Dairy Products - Butter, cheese, ice cream, yogurt, powdered milk, condensed & evaporated milk, liquid & powdered diet beverages, malted milk, milk
shakes, chocolate milk & other specified dairy products.
Fresh Fruits - All fresh fruits.
Fresh Vegetables - All fresh vegetables.
Processed Fruits - All frozen fruits and fruit juices, canned and dried fruits, and canned or bottled fruit juices.
Processed Vegetables - Canned, dried & frozen vegetables & vegetable juices.

157

Other Meats - Frankfurters; lunchmeats such as bologna, liverwurst and salami; also lamb, mutton, goat, game and organ meats.

Sugar and other Sweets - Sugar, candy & chewing gum, artificial sweeteners, jams, jellies, preserves, fruit butters, syrup, fudge mixes, icings & other sweets.
Fats and Oils - Margarine, shortening, dressings, nondairy cream substitutes, imitation milk, peanut butter.
Miscellaneous Foods - Frozen prepared meals & other foods, canned & packaged soups, potato chips, nuts & other snacks, condiments & seasonings such as
olives, pickles, relishes, sauces & gravies, baking needs & other specified condiments, other canned & packaged prepared foods such as salads, desserts & baby
foods.
Nonalcoholic Beverages - Diet & non-diet carbonated drinks (cola, fruit & other carbonated drinks), coffee (roasted, instant & freeze dried), tea (loose, instant &
ready-to-drink), ice, non-alcoholic beer & other nonalcoholic beverages, including non-carbonated fruit drinks, breakfast substitutes, and chocolate flavored
powders.
Food Away from Home - includes all meals (breakfast and brunch, lunch, dinner and snacks and nonalcoholic beverages) including tips at fast food, take-out,
delivery, concession stands, buffet and cafeteria, at full-service restaurants, and at vending machines and mobile vendors. Also included are board (including at
school), meals as pay, special catered affairs, such as weddings, bar mitzvahs, and confirmations, school lunches, and meals away from home on trips.

158

Alcoholic Beverages - Beer & ale, wine, whisky, gin, vodka, rum & other alcoholic beverages.

Expenditures Up, Food-Away-From Home Down

Food at-home spending increased in 2007, while food away from home decreased.
This change follows a new trend of higher spending occurring in the home, rather than out, a stark contrast from trends of recent years,
with away-from-home capturing a larger share of household spending. Average household expenditures were the highest in eleven
years, as were total food expenditures.

Between 2000 and 2007, the average amount of


money that a household spent on food increased
$975. This adjustment occurred as the average
annual income (before taxes) increased from
$44,649 in 2000 to $63,091 in 2007. During this
same time, overall expenditures increased from
$38,045 in 2000 to $49,638 in 2007.
Households spent the majority of their food
dollars in 2007 on two main categories: meats,
poultry, fish & eggs and other foods, which
include non-alcoholic beverages, fats & oils
(salad dressing, peanut butter, etc.), sugar & other
sweets, and miscellaneous foods (frozen prepared meals, canned and packaged soups, snacks, condiments, etc.). Consumers spent
12.7% of their total at-home food expenditures on the meats, poultry, fish & eggs category, while they spent 9.8% on fruits &
vegetables, 7.5% on cereals & bakery, and 6.3% on dairy products. The remaining 20.2% was spent on the aforementioned other
foods category.

159

Average annual expenditures increased $1,240 in 2007, while food spending increased $22. Food at-home increased $48 while food
away-from-home decreased $26. Food at homes share is more than it was in 2004 and earlier, and food away-from-homes share is
less.

Within the meats, poultry, fish & eggs category, households spent the majority of their food dollars on beef (27.8%), followed by pork
(19.3%), poultry (18.2%) and seafood (15.7%). Average household spending on the category overall was $777, down from $797 in
2006. Average spending on fruits & vegetables, meanwhile, increased slightly to $600, compared to $592 in 2006. Within this
category, consumers spent the most on fresh products, with fresh fruits accounting for 65.3% of spending in this category.
Age & Income:

Among all age groups, the meats, poultry, fish and eggs category was responsible for the most substantial food at-home single-item
expenditure, along with other food at-home purchases, which include beverages. Following that, consumers focused their spending
on fruits and vegetables, cereals and bakery products, and then dairy, in that order. Income had little effect on which types of food are
favored, with increases divided evenly between all food at-home purchases. Organized by age, the only significant change in specific
food category expenditure was observed in fruits and vegetables; as age increases, fruits and vegetables receive a larger portion of
spending, suggesting a greater concern for a healthy and nutritional diet in older consumers.
The percentage of income used toward food at-home expenditures increased nearly uniformly with age, as the 25-34 group garned the
smallest percentage of all age brackets on food at-home purchases, averaging 53.5% of total food expenditures while the 75&up age
bracket spent the most with 64.7%.
Based on financial data, food expenditures increased predictably with pre-tax income as well as with household size. When household
size remained similar, but income increased, the younger age groups typically spent less of their higher income on food, with awayfrom-home expenditures accounting for most of the small gains. As age increased, however, higher income is better reflected in food
spending. While those increases are more evenly divided between at-home and away-from-home expenditures, the data shows that
consumers are willing to indulge in luxury spending when the funds are available, particularly when an income of $70,000 is
exceeded.

160

BLS data again shows a parabolic general expenditure trend, as the 35-44 age group spent the most on food, followed very closely by
the 45-54 bracket. The rise in spending among age groups is typically aligned with increases in household size, but interestingly the
values of money spent per household member increase for every age group, subsiding slightly for the 25-34 and 55-64 brackets. The
data suggests that even as the household sizes decrease, non-seniors continue to make considerable food expenditures even when there
are fewer mouths to feed.

Gender:
Similar to last year, males spent more on food than females, averaging $3,562 compared to females $3,057, however the difference
was significantly smaller than the previous year. A portion of this difference came from food spent away-from-home, where males
spent $1,873 while females only spent $1,207. Also like last year, males spent the majority of their money on food away-from home,
while females spent the majority of their money on food at-home. It should also be noted that, generally speaking, women spent more
money at home in nearly every major food category (other than meats, poultry, fish & eggs) compared to their male counterparts. The
large difference in food spending, however, can be attributed to males away-from-home food spending.

Gender & Age also displayed a bell-shaped curve in terms of average annual food expenditures between males and females. Those
under 25 and those 65 & up spent the least, while an increase was noticeable as one came closer to the center age groups (35 54).
Within categorical analysis, other food at home consistently dominated as the most purchased category among both males and
females. Although there was some minor fluctuation, meats, poultry, fish & eggs and fruits and vegetables were generally second,
followed by cereal and bakery products and, finally, dairy products.
Gender and pre-tax income also showed noticeable trends, with both male and females spending more both at-home and away-fromhome based on their incomes. As one would expect, those making more were generally spending more, with the top spenders as
males away-from-home ($2,859) and females at-home ($2,547). It should be noted, however, that the thriftiest spenders were females
$5,000 - $9,999 category ($1,789), and not those in the >$5,000 income range. In fact, males and females making less than $5,000
were spending more away-from-home than their $10,000-$19,999 away-from-home female counterparts.
Race/Ethnicity:
Asian households had the highest average annual food expenditure totals at $7,139, followed by White households who spent $6,312.
Black or African American households spent the least on food, $4,601.

161

When age was taken into account, males and females followed different trends. For example, males aged 35 44 were the biggest
spenders on food, while females aged 45-54 spent more than other age brackets. Almost all females in all age brackets spent more on
food at home, where the opposite held true for males. On average, females spent approximately $155 more on food at-home, while
males spent well over $600 more on food away-from-home.

When average annual expenditures are considered, however, Black or African American households used 12.8% of their income on
food purchases, the highest total of all races surveyed, and White households followed at 12.3%, while the difference in total food
spending between the two was $1,796.

Regarding food at-home expenditures, all racial or ethnic groups directed the majority of their budgets toward other/miscellaneous
food-at-home expenditures, which includes nonalcoholic beverages and sugars/sweets. As with other foods, Meats, Poultry, Fish, and
Eggs expenditures were the second largest for all races, with Black or African American households spending the most, 29.46% of
their total on the category, followed by Asian households with 26.38%. Within this group, however, Asian households purchased the
most fish and seafood goods, more than any other meat expenditure for every race surveyed. Fruits and Vegetables were the third
largest food expenditure for each group, and Asian households spent a larger portion of their food budget on this category than either
White households or Black or African American households.
Organized by ethnicity, Hispanic or Latino households had the highest portion of their average annual expenditures put towards food,
14.3%, and significantly more on food at-home, at 8.3%. Hispanic or Latino households also spent a larger portion of their total
expenditures on food away-from-home than any other ethnicity.
Further analysis of food at-home spending reveals that Black or African American spent more of their budget on Meats, Poultry, Fish,
and Eggs, than any other ethnic group. Whites and all other races spent the most on both Cereal and Bakery and Dairy. Hispanic or
Latino households spent significantly more on Fruits and Vegetables than any other ethnic group.
Region:
The Western Region spent the most total money on food, $6,811 per average household, in every age category but one in the BLS
2007 Consumer Expenditure Report. The West spent more at-home and away-from-home than any other region, and its total general
expenditures were the highest. Consumers in the South spent the least on food.

162

While all racial and ethnic groups made the majority of their food expenditures on food at-home items, White households spent the
most away-from-home, $2,831 or 43.93% of their total expenditures, while Black or African American households spent the least at
$1,772 or 38.49%. The away-from-home spending figures account for the largest difference among ethnic groups in total food
expenditures.

Comparing food at-home with food away-from-home spending shows that those in the West dined out the most, however most
Americans tended to spend the majority of their money at-home. Focusing on at-home spending, the data shows that most regions
purchase the same goods at similar rates, with center-of-the-plate items being the largest single-item category everywhere. However,
consumers in the Midwest spent the least amount of their income on meats while northeastern food buyers spent the largest portion
with a .3% difference between the two. Significantly, the western groups spent the most on fruits and vegetables, the second largest
single-item expenditure, while midwestern consumers spent the least with a difference of 0.19%.

163

When organized by age, average food expenditures tend to follow the mean averages of each regions households with a few notable
exceptions. All age groups show an increase in spending until middle age, then a decrease as consumers enter their senior years. All
regions but the Northeast reach their spending apex in the 35-44 age bracket, while everywhere the 75 and up age group demonstrate
the fewest expenditures. In the younger age groups, from the Under 25 bracket to the 35-44 bracket, the Northeast region steadily
reduces the difference between the West in overall spending until finally exceeding its total expenditures in the 45-54 age group,
spending on average $516 more annually. The difference in this category is primarily accounted for in food away-from-home
spending.
Organized by income, the Western region again dominates every total food expenditure category. Increases in total food expenditures
rise almost universally along with income, with equal difference among food away-from-home and at home spending. Food at-home
expenditures do not reflect higher incomes to any significant degree until the highest income brackets are reached. Primarily, the data
indicates that expenditure trends remain fairly uniform region-by-region, and each region exhibits the same spending practices and
movements influenced by age and income.
Looking at the major metropolitan areas of each region, cities in the West predictably show the highest average annual food
expenditures and highest total expenditures, while the South has the highest pre-tax income. San Francisco leads every other city in
total expenditures, food expenditures and food away-from-home expenditures. Washington D.C. was second in total food
expenditures, and was followed by Chicago. Food at-home and away-from-home spending was held again by San Francisco, followed
by Los Angeles. San Diego spent least on food at-home expenditures and on food in general, while Miami spent the least on food
away-from-home.
Comparing food at-home purchases with food away-from-home purchases reveals a consistency in spending among the metropolitan
areas of a region.Most cities exhibited about a 52-55%/45-48% split between food at-home and away-from-home, although there are

notable exceptions. Baltimore, Miami, Dallas-Ft. Worth and Houston were the only metropolitan areas to spend the majority of their
total food expenditures on away-from-home purchases. The ratio of food at-home to food away-from-home spending in metropolitan
areas reflected larger regional trends, as pre-tax income typically correlated with more expenditures directed toward away-from-home
food expenditures.
Career:

164

While Self-Employed Workers followed similar food expenditure trends as the average Wage and Salary Earner, they had higher total
annual food expenditures, $7,752, compared with Wage and Salary Earners $7,236. Furthermore, Self-Employed Workers spent more
total than every single career group except Managers and Professionals, who on average spent $752 more per year on food. Although
Self-Employed Workers and Managers and Professionals in the Wage/Salary group spent the most of those surveyed, both had the
highest Average Annual Expenditure totals as well, and claimed the lowest two spots when food spending as a percentage of total
expenditures was calculated.
Operators, Fabricators and Laborers spent 13.40% of their total annual expenditures on food, highest of all groups, and Service
Workers spent the second most at 13.20%.
Examining the food at-home and away-from-home expenditures, Managers and Professionals spent $4,090 on food at-home
purchases, more than any other group, and were followed by Self-Employed Workers, who spent $4,039. Managers and Professionals
also made the most food away-from-home expenditures, 48.80% of their total at $3,898, while Self-Employed Workers followed with
$3,197.
Further analysis of food at-home expenditures reveals that every group spent the largest portion of their budget on
Other/Miscellaneous Foods, then Meats, Poultry Fish and Eggs. Construction Workers and Mechanics spent the highest percentage of
their food expenditures on Meats, 25.01%, followed by Operators, Fabricators and Laborers. Retirees spent a higher portion of their
total expenditures on Cereal and Cereal products than any group surveyed.
Overall, while Self-Employed Workers and Wage and Salary Earners divided their expenditures among the food at-home categories
comparably, greater differences were seen among the different occupations and expenditure totals in the away-from-home category.
Those with the lowest average annual expenditures had the highest portion allotted to food. Lower annual expenditure totals also
showed an increased rate of food at-home purchases. The statistics indicate that consumers continue to spend similar amounts on food
at-home regardless of their income, but those with greater total expenditures tend to indulge more on away-from-home dining.

Average Annual Household Food Expenditures: Ten Year History


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

At-Home
Percent of
Average
Annual
Expenditures

Food
AwayFromHome

Away-From- Away-FromHome
Home Percent
Percent of
of Average
Total Food
Annual
Expenditure Expenditures

Average
Year
Annual
Expenditures

Total
Food

2007

$49,638

$6,133

12.4%

$3,465

56.5%

7.0%

$2,668

43.5%

5.4%

2006

$48,398

$6,111

12.6%

$3,417

55.9%

7.1%

$2,694

44.1%

5.7%

2005

$46,409

$5,931

12.8%

$3,297

55.6%

7.1%

$2,634

44.4%

5.7%

2004

$43,395

$5,781

13.3%

$3,347

57.9%

7.7%

$2,434

42.1%

5.6%

2003

$40,817

$5,340

13.1%

$3,129

58.6%

7.7%

$2,211

41.4%

5.4%

2002

$40,677

$5,375

13.2%

$3,099

57.7%

7.6%

$2,276

42.3%

5.6%

2001

$39,518

$5,321

13.5%

$3,086

57.9%

7.8%

$2,235

42.0%

5.7%

2000

$38,045

$5,158

13.6%

$3,021

58.6%

7.9%

$2,137

41.4%

5.6%

1999

$36,995

$5,031

13.5%

$2,915

57.9%

7.8%

$2,116

42.1%

5.7%

1998

$35,535

$4,810

13.8%

$2,780

57.8%

7.8%

$2,030

42.2%

5.7%

165

At-Home
Food As
Food At- Percent of
Percent of
Home
Total Food
Expenditures
Expenditure

Average Annual Household Expenditures, 1998 - 2007


Food At-Home vs. Food Away-From-Home
Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

44.1%
44.4%

56.5%

2007

55.9%

2006

55.6%

2005

42.1%

57.9%

2004

41.4%

58.6%

2003

166

43.5%

41.4%

42.1%

58.0%

58.6%

57.9%

2001

2000

1999

42.3%

42.0%

57.7%

2002
Food Away From Home
Food At Home

42.2%

57.8%
1998

Average Household Food Expenditures: Ten Year History


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

$6,133

$6,111
$5,931

$5,781
$5,340

$5,375

$5,321
$5,158

$5,031

167

$4,810

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

Average Household At-Home Food Expenditures: 1998-2007


Source: Food Institute analysis based on bureau of Labor Statistics' 2007 Consumer Expenditure Survey

$3,465

$3,417
$3,297

$3,347
$3,099

$3,086

$3,021
$2,915

$2,880

1999

1998

168

$3,129

2007

2006

2005

2004

2003

2002

2001

2000

Average Household Away-From-Home Food Spending: 1998-2007


Source: Food Institute analysis based on bureau of Labor Statistics' 2007 Consumer Expenditure Survey

$2,668

$2,694

$2,634
$2,434
$2,211

$2,276

$2,235
$2,137

$2,116

169

$1,921

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

Majority Of Household At-Home Food Spending Went


Toward Meats, Poultry, Fish & Eggs and 'Other' Foods
Source: Food Institute analysis based on
Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Meats, Poultry, Fish, And


Eggs:
22.4%
Other Food At Home:
35.8%
170

*Other Food At Home includes


nonalcoholic beverages, fats
& oils (salad dressing, peanut
butter, etc.), sugar & other
sweets, and miscellaneous
foods (frozen prepared meals,
canned and packaged
soups, snacks, condiments,
food for out-of-town trips, etc.)

Fruits And Vegetables:


17.3%

Cereals And Bakery


Products:
13.3%

Dairy Products:
11.2%

Total At-Home Food


Spending: $3,465

Households Spent The Most At-Home Food


Dollars On Meats, Poutlry, Fish & Eggs In 2007
Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

$777

Meats, Poultry, Fish, And Eggs:

$600

171

Fruits And Vegetables:

$460

Cereals And Bakery Products:

Dairy Products:

Other Food At Home:

$387

$1,241

Fresh Products Constitute The Largest Portion of Spending


on Fruits & Vegetables In 2007
Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Processed Vegetables
16.0%

172

Fresh Fruits
33.7%

Processed Fruits
18.7%

Total Spending on Fruits &


Vegetables: $600

Fresh Vegetables
31.7%

Spending On Bakery Products Accounted


For The Majority Of 2007 Household Cereal & Bakery
Expenditures
Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer
Expenditures Survey

173

Total Spending on Cereals & Bakery


Products: $460

Cereals And Cereal Products


31.1%
Cereals & Cereal Products includes ready-to-eat and cooked
cereals, pasta, flour, and other products such as cornmeal, corn
starch and rice, etc.

Bakery Products
68.9%

Bakery Products includes bread, crackers &


cookies, cakes, cupcakes, pies, and frozen &
refrigerated bakery prodcuts, etc.

Spending On Dairy Products Other Than Milk Accounted


For The Majority Of 2007 Household Dairy Expenditures
Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Other Dairy Products


60%
174

Fresh Milk And Cream


40%
This includes fresh whole milk, as well as
whipping cream, fresh sour cream, etc.

Other dairy products includes butter,


cheese, ice cream, yogurt, etc.

Total Spending on Dairy


Products: $387

Beef Constituted The Largest Portion of Spending


on Meats, Poultry, Fish & Egg Category In 2007
Source: Food Institute Analysis Based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey
Eggs
5.5%
Other Meat
13.4%

175

Beef
27.8%

Fish & Seafood


15%

Pork
19.3%
Poultry
18.3%

Average Annual Household Food Expenditures 2000 - 2007


2007

2006

2005

Number of Consumer Units (000)


Average Annual Expenditures
Average Number of Persons

120,171
$49,638

118,843
$48,398

117,356
$46,409

Food:
Food At Home:

$6,133
$3,465

$6,111
$3,417

$777
$216
$150
$142
$122
$104
$43
$600
$202
$190
$112
$96
$460
$317
$143
$387
$234
$154
$1,241
$650
$333
$124
$91
$43
$2,668
$457

$797
$236
$157
$141
$122
$105
$37
$592
$195
$193
$109
$95
$446
$304
$143
$368
$228
$140
$1,212
$627
$332
$125
$86
$43
$2,694
$497

Meats, Poultry, Fish, And Eggs:


Beef
Pork
Poultry
Fish And Seafood
Other Meat
Eggs
Fruits And Vegetables:
Fresh Fruits
Fresh Vegetables
Processed Fruits
Processed Vegetables
Cereals And Bakery Products:
Bakery Products
Cereals And Cereal Products
Dairy Products:
Other Dairy Products
Fresh Milk And Cream
Other Food At Home:
Miscellaneous Foods
Nonalcoholic Beverages
Sugar And Other Sweets
Fats And Oils
Food For Out-Of-Town Trips

Food Away From Home


Alcoholic Beverages

2004

2003

2002

2001

2000

116,282
115,356
112,108
$43,395
$40,817
$40,677
2.5 - same for all years

110,339
$39,518

109,367
$38,045

$5,931
$3,297

$5,781
$3,347

$5,340
$3,129

$5,375
$3,099

$5,321
$3,086

$5,158
$3,021

$764
$228
$153
$134
$113
$103
$33
$552
$182
$175
$106
$89
$445
$302
$143
$378
$232
$146
$1,158
$609
$303
$119
$85
$41
$2,634
$426

$880
$265
$181
$156
$128
$108
$42
$561
$187
$183
$110
$82
$461
$307
$154
$371
$226
$144
$1,075
$52
$20
$128
$89
$41
$2,434
$459

$825
$246
$171
$145
$124
$102
$37
$535
$171
$172
$108
$84
$442
$292
$150
$328
$201
$127
$999
$490
$268
$119
$86
$36
$2,211
$391

$798
$231
$167
$144
$121
$101
$34
$552
$178
$175
$116
$83
$450
$296
$154
$328
$201
$127
$970
$472
$254
$117
$85
$41

$828
$248
$177
$152
$114
$102
$35
$522
$160
$162
$116
$84
$452
$296
$156
$332
$196
$136
$952
$455
$256
$116
$87
$38
$2,235
$349

$795
$238
$167
$145
$110
$101
$34
$521
$163
$159
$115
$84
$453
$297
$156
$325
$193
$131
$927
$437
$250
$117
$83
$40
$2,137
$372

$2,276
$376

176

Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Expenditures For Meats, Poultry, Fish And Eggs Category Decreased Slightly
Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

$880
$825
$764

177

$777

$797

2007

2006

2005

2004

2003

Average Annual Household Expenditures on Meat, Poultry, Fish, and Eggs


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Beef
$265
$228

2006

2005

$216

2004

2003
178

2007

$246

$236

Pork

$181
$150

$157

$153

2007

2006

2005

2004

$171

2003

Average Annual Household Expenditures on Meat, Poultry, Fish, and Eggs


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Poultry

$141

$134

2007

2006

2005

$145

2004

2003

$128

$124

2004

2003

Fish & Seafood

$122

$122

2007

2006

$113

2005

179

$156

$142

Average Annual Household Expenditures on Meat, Poultry, Fish, and Eggs


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

$43

$37

$33

$42

$37

2007

2006

2005

2004

2003

180

Eggs

Expenditures For Fruits And Vegetables Increase Slightly


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

$600
$592

181

$561
$552

$535

2007

2006

2005

2004

2003

Average Annual Household Expenditures on Fruits and Vegetables


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Fresh Fruits
$202

$195
$182

$187
$171

2006

$190

$193

2005

2004

2003
182

2007

Fresh Vegetables
$183
$175

2007

2006

2005

$172

2004

2003

Average Annual Household Expenditures on Fruits and Vegetables


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

$112

$109

$106

2007

2006

2005

$110

$108

2004

2003

$82

$84

2004

2003

Processed Vegetables

$96

2007

$95

2006

$89

2005

183

Processed Fruits

Expenditures For Cereals And Bakery Products Increase


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

$461
$460

184

$446
$445

$442

2007

2006

2005

2004

2003

Average Annual Household Expenditures on Cereals and Bakery Products


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Bakery Products
$317

$302

$307

2006

2005

2004

2003

$154

$150

2004

2003

$292

185

2007

$304

Cereals & Cereal Products

$143

$143

$143

2007

2006

2005

Expenditures For Dairy Products On The Rise


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

$387
$378
$371

186

$368

$328

2007

2006

2005

2004

2003

Average Annual Household Expenditures on Dairy Products


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Fresh Milk & Cream

$154
$140

$146

$144

2007

2006

2005

2004

2003

Other Dairy Products


$234

$228

$232

$226

$201

2007

2006

2005

2004

2003

187

$127

OTHER FOOD AT HOME: Sugar and Sweet Spending Drops Marginally


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

$128

$125

188

$124

$119

2007

2006

2005

$119

2004

2003

OTHER FOOD AT HOME: Fats and Oil Spending Slighty Increases

189

Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

$91

2007

$86

$85

2006

2005

$89

2004

$86

2003

OTHER FOOD AT HOME: Spending on Miscellaneous Foods Continue to Rise


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

$650
$627
$609

Miscellaneous Foods include frozen prepared meals & other foods, canned &
packaged soups, potato chips, nuts & other snacks, condiments & seasonings
such as olives, pickles, relishes, sauces & gravies, baking needs & other
specified condiments, other canned & packaged prepared foods such as
salads, desserts & baby foods.

$527

190

$490

2007

2006

2005

2004

2003

OTHER FOOD AT HOME: Non-Alcoholic Beverage Spending Steadily Increasing


Source: Food Institute Analysis Based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

$333

$332
$303
$290

191

$268

2007

2006

2005

2004

2003

192

PRE-TAX INCOME

PRE-TAX INCOME: Average Annual Household Food Expenditures


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Income Up To $50,000

$5,689
$4,071
$2,753

Less Than $5K

$5 - 10K

$3,206

$3,228

$10 - 15K

$15 - 20K

$20 - 30K

$30 - 40K

$40 - 50K
193

$3,078

$4,645

Income Over $50,000

$10,702

$7,421

$8,060

$7,541

$6,563

$6,371
$4,625

$50 - 70K

$70 - 80K

$80 - 100K

+$100K

$50 - 70K

$70-80K

$80-100K

PRE-TAX INCOME: Average Annual Household Food Expenditures


Food-At-Home vs. Food Away-From-Home
Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Up to $50,000

$2,135

$1,840
$1,256

Less Than $5K

$5 - 10K

$10 - 15K

$1,731

$1,423

$1,106

$1,071

$913

$2,321

$2,122

$15 - 20K

$20 - 30K

$30 - 40K

$40 - 50K

194

$1,822

$3,368

2,913

$2,648

Over $50,000
$6,178
$5,428
$4,853

$5,462

$4,611

$3,630

$5,433

$6,671

$5,134

$4,550 $4,307
$4,335

$3,793

$2,741

$50 - 70K

$70 - 80K

$80 - 100K

At Home

+$100K

Away-From-Home

$100-120K

$120-150K

$150K

PRE-TAX INCOME: Average Annual Household Food Expenditures - Income Up To $50,000


Source: Food Institute analysis based Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

$5,000 $9,999

Number of consumer units (000)


Pre-Tax Income
Average Annual Expenditures
Average Number Of Persons

4,184
-$1,053
$19,697
1.6

5,406
$8,079
$16,623
1.5

7,552
$12,676
$20,611
1.7

7,562
$17,307
$24,106
1.9

14,720
$24,893
$29,704
2.2

13,211
$34,751
$34,739
2.3

11,824
$44,555
$41,083
2.4

Food:
Food At Home:

$2,985
$1,766

$2,493
$1,765

$3,182
$2,106

$3,220
$2,149

$4,071
$2,648

$4,645
$2,913

$5,689
$3,368

$406
$105
$83
$69
$64
$55
$30
$313
$93
$104
$56
$60
$232
$151
$81
$197
$106
$91
$619
$319
$184
$59
$47
$10

$411
$98
$83
$83
$54
$67
$27
$319
$110
$99
$61
$48
$236
$157
$79
$175
$95
$80
$623
$303
$199
$61
$49
$11

$525
$170
$92
$94
$64
$70
$34
$364
$124
$113
$68
$59
$285
$192
$93
$234
$127
$108
$697
$353
$205
$72
$56
$12

$479
$124
$106
$80
$71
$65
$34
$360
$118
$117
$66
$58
$293
$196
$97
$239
$139
$100
$777
$404
$211
$77
$70
$15

$647
$177
$138
$118
$79
$96
$39
$454
$146
$144
$90
$74
$347
$229
$119
$288
$164
$124
$911
$473
$256
$90
$77
$15

$664
$189
$131
$126
$93
$85
$41
$504
$155
$156
$99
$94
$384
$263
$121
$326
$186
$140
$1,035
$534
$290
$101
$83
$28

$777
$217
$156
$136
$98
$127
$42
$580
$204
$180
$103
$93
$440
$303
$137
$370
$219
$151
$1,200
$631
$329
$119
$93
$29

$1,219

$728

$1,076

$1,071

$1,423

$1,731

$2,321

$182

$123

$159

$189

$257

$305

$423

Meats, Poultry, Fish, And Eggs:


Beef
Pork
Poultry
Other Meat
Fish And Seafood
Eggs
Fruits And Vegetables:
Fresh Fruits
Fresh Vegetables
Processed Fruits
Processed Vegetables
Cereals And Bakery Products:
Bakery Products
Cereals And Cereal Products
Dairy Products:
Other Dairy Products
Fresh Milk And Cream
Other Food At Home:
Miscellaneous Foods
Nonalcoholic Beverages
Sugar And Other Sweets
Fats And Oils
Food For Out-Of-Town Trips

Food Away From Home


Alcoholic Beverages

$10,000 - $15,000 - $20,000 - $30,000 $14,999 $19,999 $29,999 $39,999

$40,000 $49,999

195

Less Than
$5,000

Item

PRE-TAX INCOME: Distribution of Food Expenditures - Income Up To $50,000


Source: Food Institute analysis based Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Less Than
$5,000

$5,000 $9,999

Number of consumer units (000)


Pre-Tax Income
Average Annual Expenditures
Average Number Of Persons

4,184
-$1,053
$19,697
1.6

5,406
$8,079
$16,623
1.6

$12,676
$20,611
1.7

$17,307
$24,106
2.0

$24,893
$29,704
2.1

$34,751
$34,739
2.4

$44,555
$41,083
2.6

Food:
Food At Home:

100.0%
59.16%

100.0%
70.80%

100.0%
66.18%

100.0%
66.74%

100.0%
65.05%

100.0%
62.71%

100.0%
59.20%

22.99%
25.86%
20.44%
17.00%
15.76%
13.55%
7.39%
17.72%
29.71%
33.23%
17.89%
19.17%
13.14%
65.09%
34.91%
11.16%
53.81%
46.19%
35.05%
51.53%
29.73%
9.53%
7.59%
1.62%

23.29%
23.84%
20.19%
20.19%
13.14%
16.30%
6.57%
18.07%
34.48%
31.03%
19.12%
15.05%
13.37%
66.53%
33.47%
9.92%
54.29%
45.71%
35.30%
48.64%
31.94%
9.79%
7.87%
1.77%

24.93%
32.38%
17.52%
17.90%
12.19%
13.33%
6.48%
17.28%
34.07%
31.04%
18.68%
16.21%
13.53%
67.37%
32.63%
11.11%
54.27%
46.15%
33.10%
50.65%
29.41%
10.33%
8.03%
1.72%

22.29%
25.89%
22.13%
16.70%
14.82%
13.57%
7.10%
16.75%
32.78%
32.50%
18.33%
16.11%
13.63%
66.89%
33.11%
11.12%
58.16%
41.84%
36.16%
51.99%
27.16%
9.91%
9.01%
1.93%

24.43%
27.36%
21.33%
18.24%
12.21%
14.84%
6.03%
17.15%
32.16%
31.72%
19.82%
16.30%
13.10%
65.99%
34.29%
10.88%
56.94%
43.06%
34.40%
51.92%
28.10%
9.88%
8.45%
1.65%

22.79%
28.46%
19.73%
18.98%
14.01%
12.80%
6.17%
17.30%
30.75%
30.95%
19.64%
18.65%
13.18%
68.49%
31.51%
11.19%
57.06%
42.94%
35.53%
51.59%
28.02%
9.76%
8.02%
2.71%

23.07%
27.93%
20.08%
17.50%
12.61%
16.34%
5.41%
17.22%
35.17%
31.03%
17.76%
16.03%
13.06%
68.86%
31.14%
10.99%
59.19%
40.81%
35.63%
52.58%
27.42%
9.92%
7.75%
2.42%

40.84%

29.20%

33.82%

33.26%

34.95%

37.27%

40.80%

Meats, Poultry, Fish, And Eggs:


Beef
Pork
Other Meat
Poultry
Fish And Seafood
Eggs
Fruits And Vegetables:
Fresh Fruits
Fresh Vegetables
Processed Fruits
Processed Vegetables
Cereals And Bakery Products:
Cereals And Cereal Products
Bakery Products
Dairy Products:
Fresh Milk And Cream
Other Dairy Products
Other Food At Home:
Sugar And Other Sweets
Fats And Oils
Miscellaneous Foods
Nonalcoholic Beverages
Food For Out-Of-Town Trips

Food Away From Home

$10,000 - $15,000 - $20,000 - $30,000 - $40,000 $14,999 $19,999 $29,999 $39,999 $49,999
7,552

7,562

14,720

13,211

11,824

196

Item

PRE-TAX INCOME: Average Annual Household Food Expenditures - Income Over $50,000
$50,000 $69,999

$70,000
$79,999

80,000 $99,999

Number of consumer units (000)


Pre-Tax Income
Average Annual Expenditures
Average Number Of Persons

$18,390
$59,527
$50,428
2.7

$37,322
$130,455
$84,072
3.1

$9,777
$88,830
$67,640
3

$20,588
$169,072
$101,041
3.2

Food:
Food At Home:

$6,371
$3,630

$9,464
$4,853

$8,128
$4,335

$822
$233
$171
$138
$124
$113
$43
$615
$198
$198
$117
$102
$495
$346
$149
$412
$253
$159
$1,286
$674
$339
$133
$96
$43

$1,038
$287
$183
$197
$178
$141
$52
$850
$296
$270
$157
$127
$638
$446
$192
$548
$344
$204
$1,779
$939
$459
$178
$119
$84

$2,741
$489

$4,611
$768

Item

Meats, Poultry, Fish, And Eggs:


Beef
Pork
Poultry
Fish And Seafood
Other Meat
Eggs
Fruits And Vegetables:
Fresh Fruits
Fresh Vegetables
Processed Fruits
Processed Vegetables
Cereals And Bakery Products:
Bakery Products
Cereals And Cereal Products
Dairy Products:
Other Dairy Products
Fresh Milk And Cream
Other Food At Home:
Miscellaneous Foods
Nonalcoholic Beverages
Sugar And Other Sweets
Fats And Oils
Food For Out-Of-Town Trips

Food Away From Home


Alcoholic Beverages

100,000 + 100,000 over


$119,999

120,000 $149,999

150,000 +
over

$6,651
$108,502
$77,838
3.1

$5,708
$132,523
$91,864
3.2

$8,229
$243,376
$126,443
3.2

$10,890
$5,428

$8,856
$4,550

$10,567
$5,433

$12,849
$6,178

$922
$281
$166
$170
$139
$120
$46
$710
$232
$227
$138
$113
$598
$419
$179
$496
$302
$194
$1,609
$867
$411
$167
$107
$57

$1,165
$300
$199
$232
$216
$162
$56
$990
$355
$318
$177
$140
$699
$490
$208
$606
$390
$217
$1,967
$1,026
$505
$197
$134
$106

$1,007
$253
$197
$220
$147
$139
$50
$791
$279
$243
$138
$132
$571
$395
$176
$513
$319
$194
$1,669
$871
$442
$161
$119
$75

$1,168
$300
$188
$243
$227
$152
$56
$985
$326
$338
$174
$147
$733
$510
$223
$628
$399
$229
$1,920
$1,012
$478
$206
$138
$87

$1,300
$339
$209
$234
$268
$188
$61
$1,166
$443
$367
$213
$142
$784
$558
$226
$671
$444
$227
$2,257
$1,170
$578
$222
$143
$144

$3,793
$586

$5,462
$979

$4,307
$628

$5,134
$871

$6,671
$1,357

197

Source: Food Institute analysis based Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

PRE-TAX INCOME: Distribution of Food Expenditures - Income Over $50,000

Item
Number of consumer units (000)
Pre-Tax Income
Average Annual Expenditures
Average Number Of Persons

Food:
Food At Home:
Meats, Poultry, Fish, And Eggs:
Beef
Pork
Poultry
Fish And Seafood
Other Meat
Eggs
Fruits And Vegetables:
Fresh Fruits
Fresh Vegetables
Processed Fruits
Processed Vegetables
Cereals And Bakery Products:
Bakery Products
Cereals And Cereal Products
Dairy Products:
Other Dairy Products
Fresh Milk And Cream
Other Food At Home:
Miscellaneous Foods
Nonalcoholic Beverages
Sugar And Other Sweets
Fats And Oils
Food For Out-Of-Town Trips

Food Away From Home

$50,000 $69,999

$70,000
$79,999

80,000 $99,999

$18,390
$59,527
$50,428
2.7

$37,322
$130,455
$84,072
3.1

$9,777
$88,830
$67,640
3

100.00%
59.16%

100.00%
70.80%

22.99%
25.86%
20.44%
17.00%
15.76%
13.55%
7.39%
17.72%
29.71%
33.23%
17.89%
19.17%
13.14%
65.09%
34.91%
11.16%
53.81%
46.19%
35.05%
51.53%
29.73%
9.53%
7.59%
1.62%

23.29%
23.84%
20.19%
20.19%
13.14%
16.30%
6.57%
18.07%
34.48%
31.03%
19.12%
15.05%
13.37%
66.53%
33.47%
9.92%
54.29%
45.71%
35.30%
48.64%
31.94%
9.79%
7.87%
1.77%

24.93%
32.38%
17.52%
17.90%
12.19%
13.33%
6.48%
17.28%
34.07%
31.04%
18.68%
16.21%
13.53%
67.37%
32.63%
11.11%
54.27%
46.15%
33.10%
50.65%
29.41%
10.33%
8.03%
1.72%

40.84%

29.20%

33.82%

100,000 + 100,000 over


$119,999

120,000 $149,999

150,000 +
over

$20,588
$169,072
$101,041
3.2

$6,651
$108,502
$77,838
3.1

$5,708
$132,523
$91,864
3.2

$8,229
$243,376
$126,443
3.2

100.00% 100.00%
66.18% 66.74%

100.00%
65.05%

100.00%
62.71%

100.00%
59.20%

22.29%
25.89%
22.13%
16.70%
14.82%
13.57%
7.10%
16.75%
32.78%
32.50%
18.33%
16.11%
13.63%
66.89%
33.11%
11.12%
58.16%
41.84%
36.16%
51.99%
27.16%
9.91%
9.01%
1.93%

24.43%
27.36%
21.33%
18.24%
12.21%
14.84%
6.03%
17.15%
32.16%
31.72%
19.82%
16.30%
13.10%
65.99%
34.29%
10.88%
56.94%
43.06%
34.40%
51.92%
28.10%
9.88%
8.45%
1.65%

22.79%
28.46%
19.73%
18.98%
14.01%
12.80%
6.17%
17.30%
30.75%
30.95%
19.64%
18.65%
13.18%
68.49%
31.51%
11.19%
57.06%
42.94%
35.53%
51.59%
28.02%
9.76%
8.02%
2.71%

23.07%
27.93%
20.08%
17.50%
12.61%
16.34%
5.41%
17.22%
35.17%
31.03%
17.76%
16.03%
13.06%
68.86%
31.14%
10.99%
59.19%
40.81%
35.63%
52.58%
27.42%
9.92%
7.75%
2.42%

33.26%

34.95%

37.27%

40.80%

198

Source: Food Institute analysis based Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

INCOME OF SINGLE CONSUMER: Average Annual Food Expenditures


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey
Less Than $5,000 - $10,000 - $15,000 - $20,000 - $30,000 - $40,000 $5,000
$9,999
$14,999
$19,999
$29,999
$39,999
$49,999

Meats, Poultry, Fish, And Eggs:


Beef
Pork
Poultry
Other Meat
Fish And Seafood
Eggs
Fruits And Vegetables:
Fresh Fruits
Fresh Vegetables
Processed Fruits
Processed Vegetables
Cereals And Bakery Products:
Bakery Products
Cereals And Cereal Products
Dairy Products:
Other Dairy Products
Fresh Milk And Cream
Other Food At Home:
Miscellaneous Foods
Nonalcoholic Beverages
Sugar And Other Sweets
Fats And Oils
Food For Out-Of-Town Trips

Food Away From Home


Alcoholic Beverages

2,956
$727
$15,837
1.0
$2,265
$1,157

$50,000 $69,999

$70,000 And Over

4,017
4,792
4,025
5,560
4,440
3,322
3,214
3,154
$8,056 $12,562 $17,207 $24,555 $34,319 $44,110 $58,007 $108,130
$14,081 $18,305 $21,695 $25,629 $30,708 $35,852 $46,036 $68,551
1.0
1.0
1.0
1.0
1.0
1.0
1.0
1.0
$2,035 $2,396 $2,560 $2,862 $3,400 $3,928 $4,670
$6,049
$1,399 $1,514 $1,558 $1,666 $1,802 $2,054 $2,245
$2,573

$265
$77
$51
$47
$42
$33
$15
$199
$64
$72
$31
$33
$160
$109
$51
$125
$69
$56
$408
$200
$128
$38
$28
$14

$323
$82
$70
$63
$40
$50
$19
$258
$82
$87
$49
$41
$181
$125
$57
$145
$81
$64
$491
$234
$154
$57
$40
$6

$348
$108
$65
$65
$43
$44
$23
$267
$93
$83
$49
$42
$208
$141
$66
$175
$98
$77
$516
$248
$155
$62
$41
$11

$304
$75
$64
$47
$51
$48
$20
$271
$87
$82
$59
$43
$219
$160
$59
$180
$117
$63
$583
$316
$137
$69
$46
$15

$353
$105
$65
$60
$46
$55
$22
$308
$104
$89
$66
$50
$230
$162
$68
$184
$112
$72
$591
$301
$170
$61
$45
$13

$389
$98
$67
$75
$66
$60
$23
$325
$109
$103
$66
$47
$227
$157
$70
$202
$122
$80
$659
$339
$174
$66
$50
$29

$438
$119
$71
$78
$62
$84
$24
$379
$145
$114
$66
$53
$262
$182
$80
$203
$128
$75
$772
$412
$209
$70
$54
$26

$445
$108
$90
$69
$64
$93
$21
$376
$133
$131
$63
$49
$288
$208
$80
$260
$172
$89
$875
$488
$207
$85
$47
$49

$539
$146
$88
$104
$58
$116
$27
$444
$167
$134
$83
$61
$300
$215
$85
$263
$177
$86
$1,027
$512
$272
$119
$56
$69

$1,108
$233

$636
$158

$882
$185

$1,001
$285

$1,196
$277

$1,599
$448

$1,873
$605

$2,425
$729

$3,476
$1,137

199

Item
Number of consumer units (000)
Pre-Tax Income
Average Annual Expenditures
Average Number Of Persons
Food:
Food At Home:

INCOME OF SINGLE CONSUMER: Distribution of Food Spending


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey
Less Than
$5,000 $10,000 $15,000 $20,000 $30,000 $40,000 $5,000
$9,999
$14,999
$19,999
$29,999
$39,999
$49,999

$50,000 $69,999

$70,000 And Over

2,956
4,017
4,792
4,025
5,560
4,440
3,322
3,214
3,154
$727
$8,056
$12,562 $17,207 $24,555 $34,319 $44,110 $58,007 $108,130
$15,837 $14,081 $18,305 $21,695 $25,629 $30,708 $35,852 $46,036 $68,551
1.0
1.0
1.0
1.0
1.0
1.0
1.0
1.0
1.0
100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
51.08% 68.75% 63.19% 60.86% 58.21% 53.00% 52.29% 48.07% 42.54%

Meats, Poultry, Fish, And Eggs:


Beef
Pork
Other Meat
Poultry
Fish And Seafood
Eggs
Fruits And Vegetables:
Fresh Fruits
Fresh Vegetables
Processed Fruits
Processed Vegetables
Cereals And Bakery Products:

22.90%
29.06%
19.25%
17.74%
15.85%
12.45%
5.66%
17.20%
32.16%
36.18%
15.58%
16.58%
13.83%

23.09%
25.39%
21.67%
19.50%
12.38%
15.48%
5.88%
18.44%
31.78%
33.72%
18.99%
15.89%
12.94%

22.99%
31.03%
18.68%
18.68%
12.36%
12.64%
6.61%
17.64%
34.83%
31.09%
18.35%
15.73%
13.74%

19.51%
24.67%
21.05%
15.46%
16.78%
15.79%
6.58%
17.39%
32.10%
30.26%
21.77%
15.87%
14.06%

21.19%
29.75%
18.41%
17.00%
13.03%
15.58%
6.23%
18.49%
33.77%
28.90%
21.43%
16.23%
13.81%

21.59%
25.19%
17.22%
19.28%
16.97%
15.42%
5.91%
18.04%
33.54%
31.69%
20.31%
14.46%
12.60%

21.32%
27.17%
16.21%
17.81%
14.16%
19.18%
5.48%
18.45%
38.26%
30.08%
17.41%
13.98%
12.76%

19.82%
24.27%
20.22%
15.51%
14.38%
20.90%
4.72%
16.75%
35.37%
34.84%
16.76%
13.03%
12.83%

20.95%
27.09%
16.33%
19.29%
10.76%
21.52%
5.01%
17.26%
37.61%
30.18%
18.69%
13.74%
11.66%

Cereals And Cereal Products


Bakery Products
Dairy Products:
Fresh Milk And Cream
Other Dairy Products
Other Food At Home:
Sugar And Other Sweets
Fats And Oils
Miscellaneous Foods
Nonalcoholic Beverages

68.13%
31.88%
10.80%
55.20%
81.16%
35.26%
49.02%
31.37%
9.31%
6.86%

69.06%
31.49%
10.36%
55.86%
79.01%
35.10%
47.66%
31.36%
11.61%
8.15%

67.79%
31.73%
11.56%
56.00%
78.57%
34.08%
48.06%
30.04%
12.02%
7.95%

73.06%
26.94%
11.55%
65.00%
53.85%
37.42%
54.20%
23.50%
11.84%
7.89%

70.43%
29.57%
11.04%
60.87%
64.29%
35.47%
50.93%
28.76%
10.32%
7.61%

69.16%
30.84%
11.21%
60.40%
65.57%
36.57%
51.44%
26.40%
10.02%
7.59%

69.47%
30.53%
9.88%
63.05%
58.59%
37.59%
53.37%
27.07%
9.07%
6.99%

72.22%
27.78%
11.58%
66.15%
51.74%
38.98%
55.77%
23.66%
9.71%
5.37%

71.67%
28.33%
10.22%
67.30%
48.59%
39.91%
49.85%
26.48%
11.59%
5.45%

Food For Out-Of-Town Trips

3.43%

1.22%

2.13%

2.57%

2.20%

4.40%

3.37%

5.60%

6.72%

48.92%

31.25%

36.81%

39.10%

41.79%

47.03%

47.68%

51.93%

57.46%

Food Away From Home

200

Item
Number of consumer units (000)
Pre-Tax Income
Average Annual Expenditures
Average Number Of Persons
Food:
Food At Home:

PRE-TAX INCOME: Food Spending As A Percent of Annual Expenditures - Income Up To $50,000


Source: Food Institute analysis based Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Less Than
$5,000

$5,000 $9,999

Number of consumer units (000)


Pre-Tax Income
Average Annual Expenditures
Average Number Of Persons

4,184
-$1,053
$19,697
1.6

5,406
$8,079
$16,623
1.5

$12,676
$20,611
1.7

$17,307
$24,106
1.9

$24,893
$29,704
2.2

$34,751
$34,739
2.3

$44,555
$41,083
2.4

Food:
Food At Home:

15.2%
9.0%

15.0%
10.6%

15.4%
10.2%

13.4%
8.9%

13.7%
8.9%

13.4%
8.4%

13.8%
8.2%

2.1%
0.5%
0.4%
0.3%
0.4%
0.3%
0.2%
1.6%
0.5%
0.5%
0.3%
0.3%
1.2%
0.8%
0.4%
1.0%
0.5%
0.5%
3.1%
0.3%
0.2%
1.6%
0.9%
0.1%

2.5%
0.6%
0.5%
0.3%
0.5%
0.4%
0.2%
1.9%
0.7%
0.6%
0.4%
0.3%
1.4%
0.9%
0.5%
1.1%
0.6%
0.5%
3.7%
0.4%
0.3%
1.8%
1.2%
0.1%

2.5%
0.8%
0.4%
0.3%
0.5%
0.3%
0.2%
1.8%
0.6%
0.5%
0.3%
0.3%
1.4%
0.9%
0.5%
1.1%
0.6%
0.5%
3.4%
0.3%
0.3%
1.7%
1.0%
0.1%

2.0%
0.5%
0.4%
0.3%
0.3%
0.3%
0.1%
1.5%
0.5%
0.5%
0.3%
0.2%
1.2%
0.8%
0.4%
1.0%
0.6%
0.4%
3.2%
0.3%
0.3%
1.7%
0.9%
0.1%

2.2%
0.6%
0.5%
0.3%
0.4%
0.3%
0.1%
1.5%
0.5%
0.5%
0.3%
0.2%
1.2%
0.8%
0.4%
1.0%
0.6%
0.4%
3.1%
0.3%
0.3%
1.6%
0.9%
0.1%

1.9%
0.5%
0.4%
0.3%
0.4%
0.2%
0.1%
1.4%
0.4%
0.4%
0.3%
0.3%
1.1%
0.8%
0.3%
0.9%
0.6%
0.4%
3.0%
0.3%
0.2%
1.5%
0.8%
0.1%

1.9%
0.5%
0.4%
0.2%
0.3%
0.3%
0.1%
1.4%
0.5%
0.4%
0.3%
0.2%
1.1%
0.7%
0.3%
0.9%
0.5%
0.4%
2.9%
0.3%
0.2%
1.5%
0.8%
0.1%

6.2%
0.9%

4.4%
0.7%

5.2%
0.8%

4.4%
0.8%

4.8%
0.9%

5.0%
0.9%

5.6%
1.0%

Meats, Poultry, Fish, And Eggs:


Beef
Pork
Other Meat
Poultry
Fish And Seafood
Eggs
Fruits And Vegetables:
Fresh Fruits
Fresh Vegetables
Processed Fruits
Processed Vegetables
Cereals And Bakery Products:
Bakery Products
Cereals And Cereal Products
Dairy Products:
Other Dairy Products
Fresh Milk And Cream
Other Food At Home:
Sugar And Other Sweets
Fats And Oils
Miscellaneous Foods
Nonalcoholic Beverages
Food For Out-Of-Town Trips

Food Away From Home


Alcoholic Beverages
*Value less than .05%

$10,000 - $15,000 - $20,000 - $30,000 $14,999 $19,999 $29,999 $39,999


7,552

7,562

14,720

13,211

$40,000 $49,999
11,824

201

Item

PRE-TAX INCOME: Food Spending As A Percent of Annual Expenditures - Income Over $50,000
$50,000 $69,999

$70,000
$79,999

80,000 $99,999

Number of consumer units (000)


Pre-Tax Income
Average Annual Expenditures
Average Number Of Persons

$18,390
$59,527
$50,428
2.7

$37,322
$130,455
$84,072
3.1

$9,777
$88,830
$67,640
3

$20,588
$169,072
$101,041
3.2

Food:
Food At Home:

12.6%
7.2%

11.3%
5.8%

12.0%
6.4%

1.6%
0.5%
0.3%
0.3%
0.2%
0.2%
0.1%
1.2%
0.4%
0.4%
0.2%
0.2%
1.0%
0.7%
0.3%
0.8%
0.5%
0.3%
2.5%
1.3%
0.7%
0.3%
0.2%
0.1%

1.2%
0.3%
0.2%
0.2%
0.2%
0.2%
0.1%
1.0%
0.4%
0.3%
0.2%
0.2%
0.8%
0.5%
0.2%
0.7%
0.4%
0.2%
2.1%
1.1%
0.5%
0.2%
0.1%
0.1%

5.4%
1.0%

5.5%
0.9%

Item

Meats, Poultry, Fish, And Eggs:


Beef
Pork
Poultry
Other Meat
Fish And Seafood
Eggs
Fruits And Vegetables:
Fresh Fruits
Fresh Vegetables
Processed Fruits
Processed Vegetables
Cereals And Bakery Products:
Bakery Products
Cereals And Cereal Products
Dairy Products:
Other Dairy Products
Fresh Milk And Cream
Other Food At Home:
Miscellaneous Foods
Nonalcoholic Beverages
Sugar And Other Sweets
Fats And Oils
Food For Out-Of-Town Trips

Food Away From Home


Alcoholic Beverages
*Value less than .05%

100,000 + 100,000 over


$119,999

120,000 $149,999

150,000 +
over

$6,651
$108,502
$77,838
3.1

$5,708
$132,523
$91,864
3.2

$8,229
$243,376
$126,443
3.2

10.8%
5.4%

11.4%
5.8%

11.5%
5.9%

10.2%
4.9%

1.4%
0.4%
0.2%
0.3%
0.2%
0.2%
0.1%
1.1%
0.4%
0.3%
0.2%
0.2%
0.9%
0.6%
0.3%
0.7%
0.4%
0.3%
2.4%
1.3%
0.6%
0.2%
0.2%
0.1%

1.2%
0.3%
0.2%
0.2%
0.2%
0.2%
0.1%
1.0%
0.4%
0.3%
0.2%
0.1%
0.7%
0.5%
0.2%
0.6%
0.4%
0.2%
1.9%
1.0%
0.5%
0.2%
0.1%
0.1%

1.3%
0.3%
0.3%
0.3%
0.2%
0.2%
0.1%
1.0%
0.4%
0.3%
0.2%
0.2%
0.7%
0.5%
0.2%
0.7%
0.4%
0.2%
2.1%
1.1%
0.6%
0.2%
0.2%
0.1%

1.3%
0.3%
0.2%
0.3%
0.2%
0.2%
0.1%
1.1%
0.4%
0.4%
0.2%
0.2%
0.8%
0.6%
0.2%
70.0%
0.4%
0.2%
2.1%
1.1%
0.5%
0.2%
0.2%
0.1%

1.0%
0.3%
0.2%
0.2%
0.1%
0.2%
*
0.9%
0.4%
0.3%
0.2%
0.1%
0.6%
0.4%
0.2%
0.5%
0.4%
0.2%
1.8%
0.9%
0.5%
0.2%
0.1%
0.1%

5.6%
0.9%

5.4%
1.0%

5.5%
0.8%

5.6%
0.9%

5.3%
1.1%

202

Source: Food Institute analysis based Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

203

AGE

AGE: Average Annual Household Food Expenditures


All Consumer
Units
Under 25

25-34

35-44

45-54

55-64

65-74

75 & up

Number of Consumer Units (000)


Average Annual Expenditures
Average Number of Persons

Item

120,171
$49,638
2.5

8,150
$29,457
2.0

20,499
$47,510
2.8

23,416
$58,934
3.2

25,245
$58,331
2.7

19,462
$53,786
2.1

12,011
$42,262
1.8

11,390
$30,414
1.5

Food:
Food At Home:

$6,133
$3,465

$4,141
$2,265

$6,000
$3,210

$7,393
$4,125

$7,181
$4,003

$6,241
$3,457

$5,226
$3,348

$3,738
$2,419

$777
$216
$150
$142
$122
$104
$43
$600
$202
$190
$112
$96
$460
$317
$143
$387
$234
$154
$1,241
$650
$333
$124
$91
$43

$491
$155
$84
$90
$64
$71
$27
$340
$112
$103
$66
$58
$274
$180
$93
$238
$136
$103
$922
$528
$255
$69
$53
$17

$692
$197
$127
$138
$99
$89
$41
$529
$168
$163
$111
$87
$427
$282
$144
$368
$211
$157
$1,194
$683
$305
$100
$76
$30

$976
$284
$185
$179
$152
$127
$49
$677
$227
$220
$125
$105
$548
$371
$177
$459
$271
$187
$1,465
$781
$382
$151
$101
$50

$907
$243
$173
$173
$146
$125
$47
$684
$232
$217
$123
$112
$522
$361
$161
$442
$271
$172
$1,447
$729
$411
$150
$107
$50

$758
$200
$147
$134
$127
$107
$44
$640
$219
$207
$113
$102
$456
$327
$129
$384
$242
$142
$1,219
$599
$343
$119
$95
$63

$738
$190
$166
$125
$122
$93
$42
$628
$212
$205
$113
$99
$459
$322
$137
$376
$240
$136
$1,147
$569
$297
$136
$97
$49

$520
$156
$102
$73
$81
$72
$36
$479
$172
$142
$99
$67
$346
$252
$94
$284
$169
$115
$789
$569
$192
$99
$80
$16

$2,668
$457

$1,876
$461

$2,790
$514

$3,268
$469

$3,178
$498

$2,784
$533

$1,878
$346

$1,319
$218

Meats, Poultry, Fish, And Eggs:


Beef
Pork
Poultry
Fish And Seafood
Other Meat
Eggs
Fruits And Vegetables:
Fresh Fruits
Fresh Vegetables
Processed Fruits
Processed Vegetables
Cereals And Bakery Products:
Bakery Products
Cereals And Cereal Products
Dairy Products:
Other Dairy Products
Fresh Milk And Cream
Other Food At Home:
Miscellaneous Foods
Nonalcoholic Beverages
Sugar And Other Sweets
Fats And Oils
Food For Out-Of-Town Trips

Food Away From Home


Alcoholic Beverages

204

Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

AGE: Food Spending by Age Group


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

$7,393
$7,181

$6,241
$6,000

205

$5,226

$4,141
$3,738

Under 25

25-34

35-44

45-54

55-64

65-74

75 & up

AGE: Average Annual Household Food Expenditures


Food At-Home vs. Food Away-From-Home
Source: Food Institute analysis based on
Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

$4,125
55.8%

$4,003
55.7%

$3,268
44.2%

$3,210
53.5%

$3,178
44.3%

$2,790
46.5%

$3,457
55.4%

$3,348
64.1%
$2,784
44.6%

$1,876
45.3%

206

$2,419
64.7%

$2,265
54.7%
$1,878
35.9%

$1,319
35.3%

Under 25

25-34

35-44

Food At Home

45-54

55-64

Food Away From Home

65-74

75 & up

AGE: Average Annual Household


Expenditures on Meats, Poultry, Fish & Eggs
Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Beef

$284
$243
$155

Under 25

25-34

35-44

45-54

55-64

$190

65-74

$156

75 & up

Pork

$185
$127

$173

$147

$166
$102

$84

Under 25

25-34

35-44

45-54

55-64

65-74

75 & up

207

$200

$197

AGE: Average Annual Household Expenditures on Meats. Poultry, Fish & Eggs
Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Poultry

$152

Under 25

25-34

$127

$122
$81

35-44

45-54

55-64

65-74

75 & up

Fish & Seafood

$71

Under 25

$89

25-34

$127

35-44

$125

45-54

$107

$93

55-64

65-74

$72

75 & up

208

$64

$146

$99

AGE: Average Annual Household


Expenditures on Meats, Poultry, Fish & Eggs
Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Eggs

$41

$49

$47

$44

$42

$36

Under 25

25-34

35-44

45-54

55-64

65-74

75 & up

209

$27

AGE: Average Annual Household Expenditures on Fruits & Vegetables


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

$111

$125

$123

$113

$113

$99

25-34

35-44

45-54

55-64

65-74

75 & up

$66

Under 25

Processed Vegetables

$58

Under 25

$87

25-34

$105

35-44

$112

45-54

$102

$99

55-64

65-74

$67

75 & up

210

Processed Fruit

AGE: Average Annual Household Expenditures on Fruits & Vegetables


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Fresh Fruits

$227

$232

$219

$212
$172

$168

Under 25

25-34

35-44

45-54

55-64

65-74

75 & up

Fresh Vegetables

$220

$217

$207

$205

$163

$142

$103

Under 25

25-34

35-44

45-54

55-64

65-74

75 & up

211

$112

AGE: Average Annual Expenditures on Cereals & Bakery Products


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

$548

$522
$456

$427

$459
$346

Under 25

25-34

35-44

45-54

55-64

65-74

75 & up

Average Annual Expenditures on Dairy Products


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

$459

$442
$384

$368

$376
$284

$238

Under 25

25-34

35-44

45-54

55-64

65-74

75 & up

212

$274

AGE: Distribution of Food Expenditures


All Consumer
Units
Under 25

Item
Number of Consumer Units (000)
Average Annual Expenditures
Average Number of Persons

Food:
Food At Home:
Meats, Poultry, Fish, And Eggs:
Beef
Pork
Poultry
Fish And Seafood
Other Meat
Eggs
Fruits And Vegetables:
Fresh Fruits
Fresh Vegetables
Processed Fruits
Processed Vegetables
Cereals And Bakery Products:
Bakery Products
Cereals And Cereal Products
Dairy Products:
Other Dairy Products
Fresh Milk And Cream
Other Food At Home:
Miscellaneous Foods
Nonalcoholic Beverages
Sugar And Other Sweets
Fats And Oils
Food For Out-Of-Town Trips

Food Away From Home

25-34

35-44

45-54

55-64

65-74

75 & up

120,171
$49,638
2.5

8,150
$29,457
2.0

20,499
$47,510
2.8

23,416
$58,934
3.2

25,245
$58,331
2.7

19,462
$53,786
2.1

12,011
$42,262
1.8

11,390
$30,414
1.5

100.00%
56.50%

100.00%
54.70%

100.00%
53.50%

100.00%
55.80%

100.00%
55.80%

100.00%
55.39%

100.00%
64.06%

100.00%
64.71%

12.67%
3.52%
2.45%
2.32%
2.95%
1.70%
0.70%
9.78%
3.29%
3.10%
1.83%
1.57%
7.50%
5.17%
2.33%
6.31%
3.82%
2.51%
20.23%
10.60%
5.43%
2.02%
1.48%
0.70%

11.86%
3.74%
2.03%
2.17%
1.55%
1.16%
0.65%
8.21%
2.70%
2.49%
1.59%
1.40%
6.62%
4.35%
2.25%
5.75%
3.28%
2.49%
22.27%
12.75%
6.16%
1.67%
1.28%
0.41%

11.53%
3.28%
2.12%
2.30%
1.65%
1.48%
0.68%
8.82%
2.80%
2.72%
1.85%
1.45%
7.12%
4.70%
2.40%
6.13%
3.52%
2.62%
19.90%
11.38%
5.08%
1.67%
1.27%
0.50%

13.20%
3.84%
2.50%
2.42%
2.06%
1.72%
0.66%
9.16%
3.07%
2.98%
1.69%
1.42%
7.41%
5.02%
2.39%
6.21%
3.67%
2.53%
19.82%
10.56%
5.17%
2.04%
1.37%
0.68%

12.63%
3.38%
2.41%
2.41%
2.03%
1.74%
0.65%
9.53%
3.23%
3.02%
1.71%
1.56%
7.27%
5.03%
2.24%
6.16%
3.77%
2.40%
20.15%
10.15%
5.72%
2.09%
1.49%
0.70%

12.15%
3.20%
2.36%
2.15%
2.03%
1.71%
0.71%
10.25%
3.51%
3.32%
1.81%
1.63%
7.31%
5.24%
2.07%
6.15%
3.88%
2.28%
19.53%
9.60%
5.50%
1.91%
1.52%
1.01%

14.12%
3.64%
3.18%
2.39%
2.33%
1.78%
0.80%
12.02%
4.06%
3.92%
2.16%
1.89%
8.78%
6.16%
2.62%
7.19%
4.59%
2.60%
21.95%
10.89%
5.68%
2.60%
1.86%
0.94%

13.91%
4.17%
2.73%
1.95%
2.17%
1.93%
0.96%
12.81%
100.00%
3.80%
2.65%
1.79%
9.26%
6.74%
2.51%
7.60%
4.52%
3.08%
21.11%
15.22%
5.14%
2.65%
2.14%
0.43%

43.50%

45.30%

46.50%

44.20%

44.26%

44.61%

35.94%

35.29%

213

Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

AGE: Distribution of At Home Food Spending


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Under 25

Meats, Poultry,
Fish, And
Eggs:
21.7%

Other Food At
Home:
40.7%

Meats, Poultry,
Fish, And
Eggs:
21.6%

25 - 34
Other Food At
Home:
37.2%

Fruits And
Vegetables:
15.0%
Dairy
Products:
11.5%

Cereals And
Bakery
Products:
12.1%

Dairy
Products:
10.5%

Cereals And
Bakery
Products:
13.3%

Total At-Home
Food Spending:
$3,210
214

Total At-Home
Food Spending:
$2,265

Fruits And
Vegetables:
16.5%

35 - 44
Other Food At
Home:
35.5%

Meats, Poultry,
Fish, And
Eggs:
23.7%

45 - 54
Other Food At
Home:
36.2%

Fruits And
Vegetables:
17.1%

Fruits And
Vegetables:
16.4%
Dairy
Products:
11.1%

Cereals And
Bakery
Products:
13.3%

Total At-Home
Food Spending:
$4,125

Meats, Poultry,
Fish, And
Eggs:
22.7%

Dairy
Products:
11.0%

Cereals And
Bakery
Products:
13.0%

Total At-Home
Food Spending:
$4,003

AGE: Distribution of At Home Food Spending


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

55 - 64

65 - 74

Meats, Poultry,
Fish, And
Eggs:
21.9%

Other Food At
Home:
35.3%

Other Food At
Home:
34.3%

Fruits And
Vegetables:
18.8%

Fruits And
Vegetables:
18.5%
Cereals And
Bakery
Products:
13.2%

Dairy
Products:
11.2%

Total At-Home
Food Spending:
$3,457

Cereals And
Bakery
Products:
13.7%

Total At-Home
Food Spending:
$3,348
215

Dairy
Products:
11.1%

Meats, Poultry,
Fish, And
Eggs:
22.0%

75+
Other Food At Home:
32.6%

Total At-Home
Food Spending:
$2,419

Meats, Poultry, Fish, And


Eggs:
21.5%

Fruits And Vegetables:


19.8%
Dairy Products:
11.7%
Cereals And Bakery Products:
14.3%

AGE: Average Household At-Home Food Expenditures


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Under 25
$491

Meats, Poultry, Fish, And Eggs:


$340

Fruits And Vegetables:


Cereals And Bakery Products:
Dairy Products:

$274
$238

Other Food At Home:

$922

25 - 34
Meats, Poultry, Fish, And Eggs:

$692

Fruits And Vegetables:

Dairy Products:

216

Cereals And Bakery Products:

$529
$427
$368

Other Food At Home:

$1,194

35 - 44
Meats, Poultry, Fish, And Eggs:

$976

Fruits And Vegetables:

$677
$548

Cereals And Bakery Products:


Dairy Products:
Other Food At Home:

$459

$1,452

AGE: Average Household At-Home Food Expenditures


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

45 - 54
$907

Meats, Poultry, Fish, And Eggs:


$684

Fruits And Vegetables:


$522

Cereals And Bakery Products:


Dairy Products:

$442
$1,447

Other Food At Home:

55 - 64
Meats, Poultry, Fish, And Eggs:

$758

Fruits And Vegetables:


$456

Cereals And Bakery Products:


Dairy Products:

217

$640

$384

Other Food At Home:

$1,219

65 - 74
Meats, Poultry, Fish, And Eggs:

$738

Fruits And Vegetables:

$628
$459

Cereals And Bakery Products:


Dairy Products:
Other Food At Home:

$376
$1,147

AGE: Average Household At-Home Food Expenditures


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

75 & Up
$520

Meats, Poultry, Fish, And Eggs:

$479

Fruits And Vegetables:


$346

Cereals And Bakery Products:

Other Food At Home:

$284
$789

218

Dairy Products:

AGE: Food Spending As A Percent of Annual Expenditures


All Consumer
Units
Under 25

Item
Number of Consumer Units (000)
Average Annual Expenditures
Average Number of Persons

Food:
Food At Home:
Meats, Poultry, Fish, And Eggs:
Beef
Pork
Poultry
Other Meat
Fish And Seafood
Eggs
Fruits And Vegetables:
Fresh Fruits
Fresh Vegetables
Processed Fruits
Processed Vegetables
Cereals And Bakery Products:
Bakery Products
Cereals And Cereal Products
Dairy Products:
Other Dairy Products
Fresh Milk And Cream
Other Food At Home:
Miscellaneous Foods
Nonalcoholic Beverages
Sugar And Other Sweets
Fats And Oils
Food For Out-Of-Town Trips

Food Away From Home


Alcoholic Beverages
* Value less than .05%

120,171
$49,638
2.5

8,150
$29,457
2.0

25-34

35-44

45-54

55-64

65-74

75 & up

20,499
$47,510
2.8

23,416
$58,934
3.2

25,245
$58,331
2.7

19,462
$53,786
2.1

12,011
$42,262
1.8

11,390
$30,414
1.5

12.4%

14.1%

12.6%

12.5%

12.3%

11.6%

12.4%

12.3%

7.0%
1.6%
0.4%
0.3%
0.3%
0.2%
0.2%
0.1%
1.2%
0.4%
0.4%
0.2%
0.2%
0.9%
0.6%
0.3%
0.8%
0.5%
0.3%
2.5%
1.3%
0.7%
0.3%
0.2%
0.1%
5.4%

7.7%
1.7%
0.5%
0.3%
0.3%
0.2%
0.2%
0.1%
1.2%
0.4%
0.4%
0.2%
0.2%
0.9%
0.6%
0.3%
0.8%
0.5%
0.3%
3.1%
1.8%
0.9%
0.2%
0.2%
0.1%
6.4%

6.8%
1.5%
0.4%
0.3%
0.3%
0.2%
0.2%
0.1%
1.1%
0.4%
0.3%
0.2%
0.2%
0.9%
0.6%
0.3%
0.8%
0.4%
0.3%
2.5%
1.4%
0.6%
0.2%
0.2%
0.1%
5.9%

7.0%
1.7%
0.5%
0.3%
0.3%
0.2%
0.3%
0.1%
1.1%
0.4%
0.4%
0.2%
0.2%
0.9%
0.6%
0.3%
0.8%
0.5%
0.3%
2.5%
1.3%
0.6%
0.3%
0.2%
0.1%
5.5%

6.9%
1.6%
0.4%
0.3%
0.3%
0.2%
0.3%
0.1%
1.2%
0.4%
0.4%
0.2%
0.2%
0.9%
0.6%
0.3%
0.8%
0.5%
0.3%
2.5%
1.2%
0.7%
0.3%
0.2%
0.1%
5.4%

6.4%
1.4%
0.4%
0.3%
0.2%
0.2%
0.2%
0.1%
1.2%
0.4%
0.4%
0.2%
0.2%
0.8%
0.6%
0.2%
0.7%
0.5%
0.3%
2.3%
1.1%
0.6%
0.2%
0.2%
0.1%
5.2%

7.9%
1.7%
0.4%
0.4%
0.3%
0.2%
0.3%
0.1%
1.5%
0.5%
0.5%
0.3%
0.2%
1.1%
0.8%
0.3%
0.9%
0.6%
0.3%
2.7%
1.3%
0.7%
0.3%
0.2%
0.1%
4.4%

8.0%
1.7%
0.5%
0.3%
0.2%
0.2%
0.3%
0.1%
1.6%
0.6%
0.5%
0.3%
0.2%
1.1%
0.8%
0.3%
0.9%
0.6%
0.4%
2.6%
1.3%
0.6%
0.3%
0.3%
0.1%
4.3%

0.9%

1.6%

1.1%

0.8%

0.9%

1.0%

0.8%

0.7%

219

Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

AGE & PRE-TAX INCOME: Average Annual Household Food Expenditures - Under 25
Item
Number of consumer units (000)
Pre-Tax Income
Average Annual Expenditures
Average Number Of Persons
Food:
Food At Home:

Meats, Poultry, Fish, And Eggs:


Beef
Poultry
Pork
Other Meat
Fish And Seafood
Eggs
Fruits And Vegetables:
Fresh Fruits
Fresh Vegetables
Processed Fruits
Processed Vegetables
Cereals And Bakery Products:
Bakery Products
Cereals And Cereal Products
Dairy Products:
Other Dairy Products
Fresh Milk And Cream
Other Food At Home:
Miscellaneous Foods
Nonalcoholic Beverages
Sugar And Other Sweets
Fats And Oils
Food For Out-Of-Town Trips

Food Away From Home


Alcoholic Beverages

$40,000
& up

1,315
$2,515
$13,005
1.2
$2,149
$879

1,189
$7,369
$15,922
1.4
$2,224
$1,137

786
$12,479
$17,798
1.6
$2,661
$1,525

704
$17,327
$22,233
1.9
$3,292
$1,883

1,140
$24,454
$27,068
2.1
$4,023
$2,247

898
$34,237
$35,292
2.3
$4,714
$2,574

2,125
$72,498
$49,543
2.8
$6,189
$3,117

$166
$60
$37
$23
$20
$12
$15
$122
$32
$34
$29
$27
$214
$72
$52
$109
$57
$52
$358
$216
$79
$29
$23
$11

$253
$70
$43
$55
$32
$38
$12
$139
$37
$39
$39
$25
$133
$80
$52
$108
$64
$44
$505
$294
$111
$52
$30
$19

$325
$106
$64
$59
$42
$33
$21
$262
$99
$76
$48
$39
$188
$114
$74
$167
$94
$73
$583
$322
$158
$62
$33
$7

$318
$105
$54
$53
$49
$38
$19
$332
$117
$100
$60
$55
$238
$156
$81
$231
$131
$100
$765
$454
$169
$76
$45
$20

$571
$185
$108
$104
$72
$74
$27
$355
$113
$117
$70
$55
$257
$158
$99
$230
$129
$102
$835
$471
$224
$79
$51
$10

$575
$157
$83
$112
$128
$61
$34
$380
$115
$112
$95
$58
$295
$194
$101
$298
$168
$130
$1,026
$522
$349
$74
$65
$17

$681
$207
$131
$129
$83
$97
$34
$497
$160
$155
$93
$88
$390
$254
$137
$329
$194
$134
$1,221
$693
$344
$88
$72
$24

$1,270
$276

$1,087
$285

$1,137
$306

$1,409
$442

$1,776
$282

$2,141
$553

$3,071
$779

220

Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey
Less Than $5,000 $10,000 - $15,000 $20,000 - $30,000 $5,000
$9,999
$14,999
$19,999
$29,999
$39,999

AGE & PRE-TAX INCOME: Distribution of Food Expenditures - Under 25


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey
Less Than
$5,000 $10,000 $15,000 $20,000 $30,000 $5,000
$9,999
$14,999
$19,999
$29,999
$39,999

Meats, Poultry, Fish, And Eggs:


Beef
Poultry
Pork
Other Meat
Fish And Seafood
Eggs
Fruits And Vegetables:
Fresh Fruits
Fresh Vegetables
Processed Fruits
Processed Vegetables
Cereals And Bakery Products:
Bakery Products
Cereals And Cereal Products
Dairy Products:
Other Dairy Products
Fresh Milk And Cream
Other Food At Home:
Miscellaneous Foods
Nonalcoholic Beverages
Sugar And Other Sweets
Fats And Oils
Food For Out-Of-Town Trips

Food Away From Home

1,315
1,189
$2,515
$7,369
$13,005
$15,922
1.2
1.4
100.00% 100.00%
40.90% 51.12%

786
704
1,140
898
2,125
$12,479
$17,327 $24,454 $34,237 $72,498
$17,798
$22,233 $27,068 $35,292 $49,543
1.6
1.9
2.1
2.3
2.8
100.00% 100.00% 100.00% 100.00% 100.00%
57.31% 57.20% 55.85% 54.60% 50.36%

18.89%
36.14%
22.29%
13.86%
12.05%
7.23%
9.04%
13.88%
26.23%
27.87%
23.77%
22.13%
24.35%
33.64%
24.30%
12.40%
52.29%
47.71%
16.66%
60.34%
22.07%
8.10%
6.42%
3.07%

22.25%
27.67%
17.00%
21.74%
12.65%
15.02%
4.74%
12.23%
26.62%
28.06%
28.06%
17.99%
11.70%
60.15%
39.10%
9.50%
59.26%
40.74%
22.71%
58.22%
21.98%
10.30%
5.94%
3.76%

21.31%
32.62%
19.69%
18.15%
12.92%
10.15%
6.46%
17.18%
37.79%
29.01%
18.32%
14.89%
12.33%
60.64%
39.36%
10.95%
56.29%
43.71%
21.91%
55.23%
27.10%
10.63%
5.66%
1.20%

16.89%
33.02%
16.98%
16.67%
15.41%
11.95%
5.97%
17.63%
35.24%
30.12%
18.07%
16.57%
12.64%
65.55%
34.03%
12.27%
56.71%
43.29%
23.24%
59.35%
22.09%
9.93%
5.88%
2.61%

25.41%
32.40%
18.91%
18.21%
12.61%
12.96%
4.73%
15.80%
31.83%
32.96%
19.72%
15.49%
11.44%
61.48%
38.52%
10.24%
56.09%
44.35%
20.76%
56.41%
26.83%
9.46%
6.11%
1.20%

22.34%
27.30%
14.43%
19.48%
22.26%
10.61%
5.91%
14.76%
30.26%
29.47%
25.00%
15.26%
11.46%
65.76%
34.24%
11.58%
56.38%
43.62%
21.76%
50.88%
34.02%
7.21%
6.34%
1.66%

21.85%
30.40%
19.24%
18.94%
12.19%
14.24%
4.99%
15.94%
32.19%
31.19%
18.71%
17.71%
12.51%
65.13%
35.13%
10.56%
58.97%
40.73%
19.73%
56.76%
28.17%
7.21%
5.90%
1.97%

59.10%

48.88%

42.73%

42.80%

44.15%

45.42%

49.62%

221

Item
Number of consumer units (000)
Pre-Tax Income
Average Annual Expenditures
Average Number Of Persons
Food:
Food At Home:

$40,000
And Over

AGE AND PRE-TAX INCOME: Average Household At-Home Food Expenditures


Households Under 25
Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Less Than $5,000


Meats, Poultry, Fish, And Eggs:
Fruits And Vegetables:

$166
$122

Cereals And Bakery Products:


Dairy Products:

$214
$109
$358

Other Food At Home:

$5,000 to $9,999
Food At Home:
Eggs

$139

Processed Vegetables

$133

Cereals And Cereal Products

222

$253

$108

Fresh Milk And Cream

$505

$10,000 to $14,999
Food At Home:

$325

Eggs
Processed Vegetables
Cereals And Cereal Products
Fresh Milk And Cream

$262
$188
$167
$583

AGE AND PRE-TAX INCOME: Average Household At-Home Food Expenditures


Households Under 25
$15,000 to $19,999
$318

Meats, Poultry, Fish, And Eggs:

$332

Fruits And Vegetables:


Cereals And Bakery Products:

$238

Dairy Products:

$231

Other Food At Home:

$765

Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

$20,000 to $29,999
$571

Meats, Poultry, Fish, And Eggs:

Cereals And Bakery Products:


Dairy Products:

223

$355

Fruits And Vegetables:


$257
$230

Other Food At Home:

$835

$30,000 to $39,999
Meats, Poultry, Fish, And Eggs:

$575

Fruits And Vegetables:

$380

Cereals And Bakery Products:

$295

Dairy Products:

$298

Other Food At Home:

$1,026

AGE AND PRE-TAX INCOME: Average Household At-Home Food Expenditures


Households Under 25
Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

$40,000 & Up
Meats, Poultry, Fish, And Eggs:

$681

Fruits And Vegetables:

Dairy Products:
Other Food At Home:

$390
$329
$1,221

224

Cereals And Bakery Products:

$497

AGE & PRE-TAX INCOME: Average Annual Household Food Expenditures - 25 - 34


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey
Less Than $5,000 - $10,000 - $15,000 - $20,000 - $30,000 - $40,000 $5,000
$9,999
$14,999
$19,999
$29,999
$39,999
$49,999

Meats, Poultry, Fish, And Eggs:


Beef
Poultry
Pork
Other Meat
Fish And Seafood
Eggs
Fruits And Vegetables:
Fresh Fruits
Fresh Vegetables
Processed Vegetables
Processed Fruits
Cereals And Bakery Products:
Bakery Products
Cereals And Cereal Products
Dairy Products:
Other Dairy Products
Fresh Milk And Cream
Other Food At Home:
Miscellaneous Foods
Nonalcoholic Beverages
Sugar And Other Sweets
Fats And Oils
Food For Out-Of-Town Trips

Food Away From Home

$50,000 $69,999

$70,000 And Over

566
689
880
1,033
2,527
2,650
2,291
3,720
5,928
$250
$8,017 $12,669 $17,518 $25,210 $34,675 $44,256 $59,180 $109,453
$21,229 $19,352 $23,831 $24,563 $29,430 $35,782 $40,592 $51,284 $74,523
2.3
2.4
2.8
2.6
2.7
2.7
2.7
2.9
3.1
$2,680 $3,294 $4,144 $3,878 $4,256 $4,864 $5,608 $6,374
$8,165
$1,709 $2,083 $2,639 $2,450 $2,445 $2,701 $3,118 $3,276
$4,002
$412
$124
$92
$92
$63
$11
$31
$253
$69
$106
$41
$37
$217
$125
$92
$221
$119
$102
$605
$364
$157
$41
$36
$6

$494
$135
$101
$97
$66
$66
$29
$337
$94
$96
$53
$95
$303
$196
$107
$251
$145
$106
$697
$321
$208
$83
$72
$12

$650
$157
$120
$144
$78
$113
$37
$449
$138
$154
$64
$93
$319
$197
$122
$277
$151
$125
$944
$513
$264
$78
$65
$25

$649
$189
$118
$153
$84
$56
$48
$403
$124
$142
$67
$70
$329
$204
$125
$243
$124
$119
$827
$467
$211
$75
$61
$13

$589
$158
$120
$117
$74
$86
$33
$416
$126
$137
$73
$79
$319
$202
$117
$264
$147
$117
$858
$457
$246
$76
$62
$17

$606
$190
$107
$115
$71
$91
$32
$442
$136
$139
$74
$94
$339
$219
$119
$302
$163
$138
$1,012
$554
$280
$83
$69
$26

$700
$208
$133
$148
$85
$89
$38
$494
$164
$146
$81
$103
$398
$259
$140
$344
$205
$139
$1,181
$719
$276
$87
$70
$29

$735
$233
$137
$127
$95
$104
$39
$548
$170
$171
$86
$120
$446
$304
$143
$387
$225
$161
$1,159
$628
$315
$99
$82
$35

$858
$253
$175
$147
$109
$134
$40
$678
$212
$218
$110
$138
$516
$341
$176
$452
$275
$177
$1,498
$842
$393
$123
$90
$51

$971

$1,212

$1,505

$1,428

$1,811

$2,164

$2,490

$3,098

$4,163

225

Item
Number of consumer units (000)
Pre-Tax Income
Average Annual Expenditures
Average Number Of Persons
Food:
Food At Home:

AGE & PRE-TAX INCOME: Distribution of Food Expenditures - 25 - 34


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey
Less Than
$5,000 $10,000 $15,000 $20,000 $30,000 $40,000 $5,000
$9,999
$14,999
$19,999
$29,999
$39,999
$49,999

Meats, Poultry, Fish, And Eggs:


Beef
Poultry
Pork
Other Meat
Fish And Seafood
Eggs
Fruits And Vegetables:
Fresh Fruits
Fresh Vegetables
Processed Vegetables
Processed Fruits
Cereals And Bakery Products:
Bakery Products
Cereals And Cereal Products
Dairy Products:
Other Dairy Products
Fresh Milk And Cream
Other Food At Home:
Miscellaneous Foods
Nonalcoholic Beverages
Sugar And Other Sweets
Fats And Oils
Food For Out-Of-Town Trips

Food Away From Home

566
$250
$21,229
2.3
100.00%
63.77%

$50,000 $69,999

$70,000 And Over

689
880
1,033
2,527
2,650
2,291
3,720
5,928
$8,017
$12,669 $17,518 $25,210 $34,675 $44,256 $59,180 $109,453
$19,352
$23,831 $24,563 $29,430 $35,782 $40,592 $51,284
$74,523
2.4
2.8
2.6
2.7
2.7
2.7
2.9
3.1
100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
63.24%
63.68% 63.18% 57.45% 55.53% 55.60% 51.40%
49.01%

24.11%
30.10%
22.33%
22.33%
15.29%
2.67%
7.52%
14.80%
27.27%
41.90%
16.21%
14.62%
12.70%
57.60%
42.40%
12.93%
53.85%
46.15%
35.40%
60.17%
25.95%
6.78%
5.95%
0.99%

23.72%
27.33%
20.45%
19.64%
13.36%
13.36%
5.87%
16.18%
27.89%
28.49%
15.73%
28.19%
14.55%
64.69%
35.31%
12.05%
57.77%
42.23%
33.46%
46.05%
29.84%
11.91%
10.33%
1.72%

24.63%
24.15%
18.46%
22.15%
12.00%
17.38%
5.69%
17.01%
30.73%
34.30%
14.25%
20.71%
12.09%
61.76%
38.24%
10.50%
54.51%
45.13%
35.77%
54.34%
27.97%
8.26%
6.89%
2.65%

26.49%
29.12%
18.18%
23.57%
12.94%
8.63%
7.40%
16.45%
30.77%
35.24%
16.63%
17.37%
13.43%
62.01%
37.99%
9.92%
51.03%
48.97%
33.76%
56.47%
25.51%
9.07%
7.38%
1.57%

24.09%
26.83%
20.37%
19.86%
12.56%
14.60%
5.60%
17.01%
30.29%
32.93%
17.55%
18.99%
13.05%
63.32%
36.68%
10.80%
55.68%
44.32%
35.09%
53.26%
28.67%
8.86%
7.23%
1.98%

22.44%
31.35%
17.66%
18.98%
11.72%
15.02%
5.28%
16.36%
30.77%
31.45%
16.74%
21.27%
12.55%
64.60%
35.10%
11.18%
53.97%
45.70%
37.47%
54.74%
27.67%
8.20%
6.82%
2.57%

22.45%
29.71%
19.00%
21.14%
12.14%
12.71%
5.43%
15.84%
33.20%
29.55%
16.40%
20.85%
12.76%
65.08%
35.18%
11.03%
59.59%
40.41%
37.88%
60.88%
23.37%
7.37%
5.93%
2.46%

22.44%
31.70%
18.64%
17.28%
12.93%
14.15%
5.31%
16.73%
31.02%
31.20%
15.69%
21.90%
13.61%
68.16%
32.06%
11.81%
58.14%
41.60%
35.38%
54.18%
27.18%
8.54%
7.08%
3.02%

21.44%
29.49%
20.40%
17.13%
12.70%
15.62%
4.66%
16.94%
31.27%
32.15%
16.22%
20.35%
12.89%
66.09%
34.11%
11.29%
60.84%
39.16%
37.43%
56.21%
26.23%
8.21%
6.01%
3.40%

36.23%

36.79%

36.32%

36.82%

42.55%

44.49%

44.40%

48.60%

50.99%

226

Item
Number of consumer units (000)
Pre-Tax Income
Average Annual Expenditures
Average Number Of Persons
Food:
Food At Home:

AGE AND PRE-TAX INCOME: Average Household At-Home Food Expenditures


Households 25 - 34
Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Less Than $5,000


Meats, Poultry, Fish, And Eggs:
Fruits And Vegetables:

$412
$253

Cereals And Bakery Products:

$217

Dairy Products:

$221
$605

Other Food At Home:

$5,000 to $9,999
Food At Home:

$494

Processed Vegetables
Cereals And Cereal Products

$337
227

Eggs

$303
$251

Fresh Milk And Cream

$697

$10,000 to $14,999
Food At Home:

$650

Eggs
Processed Vegetables
Cereals And Cereal Products
Fresh Milk And Cream

$449
$319
$277
$944

AGE AND PRE-TAX INCOME: Average Household At-Home Food Expenditures


Households 25 - 34
Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

$15,000 to $19,999
Meats, Poultry, Fish, And Eggs:

$649

Fruits And Vegetables:

$403
$329

Cereals And Bakery Products:


Dairy Products:

$243
$827

Other Food At Home:

$20,000 to $29,999
Meats, Poultry, Fish, And Eggs:

$589

Cereals And Bakery Products:


Dairy Products:

$416

228

Fruits And Vegetables:


$319
$264

Other Food At Home:

$858

$30,000 to $39,999
$606

Meats, Poultry, Fish, And Eggs:


$442

Fruits And Vegetables:


Cereals And Bakery Products:
Dairy Products:
Other Food At Home:

$339
$302
$1,012

AGE AND PRE-TAX INCOME: Average Household At-Home Food Expenditures


Households 25 - 34
Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

$40,000 to $49,999
$700

Meats, Poultry, Fish, And Eggs:


$494

Fruits And Vegetables:


Cereals And Bakery Products:
Dairy Products:

$398
$344

Other Food At Home:

$1,181

$50,000 to $69,999
Meats, Poultry, Fish, And Eggs:

$735

Fruits And Vegetables:

Dairy Products:

229

Cereals And Bakery Products:

$548
$446
$387

Other Food At Home:

$1,159

$70,000 & Up
Meats, Poultry, Fish, And Eggs:

$858

Fruits And Vegetables:


Cereals And Bakery Products:
Dairy Products:
Other Food At Home:

$678
$516
$452
$1,498

AGE & PRE-TAX INCOME: Average Annual Household Food Expenditures - 35 - 44


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey
Less Than
$5,000 $10,000 - $15,000 - $20,000 - $30,000 $5,000
$9,999
$14,999
$19,999
$29,999
$39,999

Meats, Poultry, Fish, And Eggs:


Beef
Pork
Poultry
Other Meat
Fish And Seafood
Eggs
Fruits And Vegetables:
Fresh Fruits
Fresh Vegetables
Processed Vegetables
Processed Fruits
Cereals And Bakery Products:
Bakery Products
Cereals And Cereal Products
Dairy Products:
Fresh Milk And Cream
Other Dairy Products
Other Food At Home:
Miscellaneous Foods
Nonalcoholic Beverages
Sugar And Other Sweets
Fats And Oils
Food For Out-Of-Town Trips

Food Away From Home

497
-$2,600
$26,557
2.3
$4,189
$2,298

$40,000 $49,999

$50,000 $69,999

$70,000 And Over

578
792
795
2,155
2,416
2,532
4,234
9,684
$8,186 $12,791 $17,354 $25,119 $34,819 $44,674 $59,517 $131,228
$19,082 $24,496 $24,841 $30,831 $35,356 $41,536 $52,337 $87,296
2.2
2.7
2.7
2.9
2.8
3.0
3.3
3.6
$3,244 $4,456 $4,129 $4,629 $5,061 $6,142 $7,130 $10,010
$2,170 $3,174 $3,049 $3,084 $3,130 $3,637 $4,051
$5,198

$642
$171
$166
$128
$64
$85
$27
$406
$119
$164
$72
$52
$293
$181
$113
$200
$98
$102
$757
$336
$267
$98
$52
$5

$596
$184
$129
$116
$44
$90
$33
$308
$85
$92
$72
$59
$264
$164
$100
$202
$109
$93
$800
$337
$328
$77
$51
$8

$742
$218
$160
$152
$82
$85
$45
$527
$175
$155
$97
$100
$387
$252
$135
$355
$150
$205
$1,164
$644
$334
$97
$81
$8

$801
$170
$188
$144
$97
$166
$36
$516
$172
$160
$92
$92
$357
$220
$137
$307
$133
$174
$1,068
$584
$311
$98
$66
$9

$805
$224
$170
$154
$96
$119
$43
$509
$146
$181
$84
$97
$392
$249
$143
$317
$133
$184
$1,061
$566
$296
$98
$88
$12

$834
$248
$176
$164
$107
$93
$46
$514
$164
$164
$91
$95
$389
$249
$140
$349
$148
$201
$1,044
$528
$302
$105
$80
$29

$912
$275
$180
$152
$125
$139
$42
$597
$206
$187
$102
$101
$482
$323
$158
$383
$159
$223
$1,263
$649
$372
$122
$91
$29

$931
$266
$185
$172
$132
$122
$55
$618
$199
$192
$105
$122
$552
$379
$172
$478
$193
$285
$1,472
$789
$397
$144
$106
$36

$1,152
$332
$201
$220
$159
$191
$48
$865
$295
$271
$132
$168
$712
$485
$227
$578
$223
$355
$1,891
$1,025
$473
$196
$116
$81

$1,891

$1,074

$1,282

$1,081

$1,546

$1,930

$2,505

$3,079

$4,812

230

Item
Number of consumer units (000)
Pre-Tax Income
Average Annual Expenditures
Average Number Of Persons
Food:
Food At Home:

AGE & PRE-TAX INCOME: Distribution of Food Expenditures - 35 - 44


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey
Less Than
$5,000 $10,000 $15,000 $20,000 $30,000 $40,000 $5,000
$9,999
$14,999
$19,999
$29,999
$39,999
$49,999

Meats, Poultry, Fish, And Eggs:


Beef
Pork
Poultry
Other Meat
Fish And Seafood
Eggs
Fruits And Vegetables:
Fresh Fruits
Fresh Vegetables
Processed Vegetables
Processed Fruits
Cereals And Bakery Products:
Bakery Products
Cereals And Cereal Products
Dairy Products:
Fresh Milk And Cream
Other Dairy Products
Other Food At Home:
Miscellaneous Foods
Nonalcoholic Beverages
Sugar And Other Sweets
Fats And Oils
Food For Out-Of-Town Trips

Food Away From Home

497
-$2,600
$26,557
2.3
100.00%
54.86%

$50,000 $69,999

$70,000 And Over

578
792
795
2,155
2,416
2,532 4,234
9,684
$8,186
$12,791 $17,354 $25,119 $34,819 $44,674 $59,517 $131,228
$19,082
$24,496 $24,841 $30,831 $35,356 $41,536 $52,337
$87,926
2.2
2.7
2.7
2.9
2.8
3.0
3.3
3.6
100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
66.89%
71.23% 73.84% 66.62% 61.85% 59.22% 56.82%
51.93%

27.94%
26.64%
25.86%
19.94%
9.97%
13.24%
4.21%
17.67%
29.31%
40.39%
17.73%
12.81%
12.75%
61.77%
38.57%
8.70%
49.00%
51.00%
32.94%
44.39%
35.27%
12.95%
6.87%
0.66%

27.47%
30.87%
21.64%
19.46%
7.38%
15.10%
5.54%
14.19%
27.60%
29.87%
23.38%
19.16%
12.17%
62.12%
37.88%
9.31%
53.96%
46.04%
36.87%
42.13%
41.00%
9.63%
6.38%
1.00%

23.38%
29.38%
21.56%
20.49%
11.05%
11.46%
6.06%
16.60%
33.21%
29.41%
18.41%
18.98%
12.19%
65.12%
34.88%
11.18%
42.25%
57.75%
36.67%
55.33%
28.69%
8.33%
6.96%
0.69%

26.27%
21.22%
23.47%
17.98%
12.11%
20.72%
4.49%
16.92%
33.33%
31.01%
17.83%
17.83%
11.71%
61.62%
38.38%
10.07%
43.32%
56.68%
35.03%
54.68%
29.12%
9.18%
6.18%
0.84%

26.10%
27.83%
21.12%
19.13%
11.93%
14.78%
5.34%
16.50%
28.68%
35.56%
16.50%
19.06%
12.71%
63.52%
36.48%
10.28%
41.96%
58.04%
34.40%
53.35%
27.90%
9.24%
8.29%
1.13%

26.65%
29.74%
21.10%
19.66%
12.83%
11.15%
5.52%
16.42%
31.91%
31.91%
17.70%
18.48%
12.43%
64.01%
35.99%
11.15%
42.41%
57.59%
33.35%
50.57%
28.93%
10.06%
7.66%
2.78%

25.08%
30.15%
19.74%
16.67%
13.71%
15.24%
4.61%
16.41%
34.51%
31.32%
17.09%
16.92%
13.25%
67.01%
32.78%
10.53%
41.51%
58.22%
34.73%
51.39%
29.45%
9.66%
7.21%
2.30%

22.98%
28.57%
19.87%
18.47%
14.18%
13.10%
5.91%
15.26%
32.20%
31.07%
16.99%
19.74%
13.63%
68.66%
31.16%
11.80%
40.38%
59.62%
36.34%
53.60%
26.97%
9.78%
7.20%
2.45%

22.16%
28.82%
17.45%
19.10%
13.80%
16.58%
4.17%
16.64%
34.10%
31.33%
15.26%
19.42%
13.70%
68.12%
31.88%
11.12%
38.58%
61.42%
36.38%
54.20%
25.01%
10.36%
6.13%
4.28%

45.14%

33.11%

28.77%

26.18%

33.40%

38.13%

40.78%

43.18%

48.07%

231

Item
Number of consumer units (000)
Pre-Tax Income
Average Annual Expenditures
Average Number Of Persons
Food:
Food At Home:

AGE AND PRE-TAX INCOME: Average Household At-Home Food Expenditures


Households 35 - 44
Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Less Than $5,000


$642

Meats, Poultry, Fish, And Eggs:


$406

Fruits And Vegetables:


$293

Cereals And Bakery Products:


Dairy Products:

$200
$757

Other Food At Home:

$5,000 to $9,999
$596

Food At Home:

Processed Vegetables
Cereals And Cereal Products

232

$308

Eggs

$264
$202
$800

Fresh Milk And Cream

$10,000 to $14,999
$742

Food At Home:
$527

Eggs
Processed Vegetables
Cereals And Cereal Products
Fresh Milk And Cream

$387
$355
$1,164

AGE AND PRE-TAX INCOME: Average Household At-Home Food Expenditures


Households 35 - 44
Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

$15,000 to $19,999
$801

Meats, Poultry, Fish, And Eggs:


$516

Fruits And Vegetables:


Cereals And Bakery Products:
Dairy Products:

$357
$307

Other Food At Home:

$1,068

$20,000 to $29,999
Meats, Poultry, Fish, And Eggs:

$805

Fruits And Vegetables:


$392

Cereals And Bakery Products:


Dairy Products:

233

$509

$317

Other Food At Home:

$1,061

$30,000 to $39,999
Meats, Poultry, Fish, And Eggs:

$834

Fruits And Vegetables:


Cereals And Bakery Products:
Dairy Products:
Other Food At Home:

$514
$389
$349
$1,044

AGE AND PRE-TAX INCOME: Average Household At-Home Food Expenditures


Households 35 - 44
Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

$40,000 to $49,999
$912

Meats, Poultry, Fish, And Eggs:


$597

Fruits And Vegetables:


$482

Cereals And Bakery Products:


Dairy Products:

$383

Other Food At Home:

$1,263

$50,000 to $69,999
$931

Meats, Poultry, Fish, And Eggs:


Fruits And Vegetables:

$552

Cereals And Bakery Products:


Dairy Products:

234

$618

$478
$1,472

Other Food At Home:

$70,000 & Up
$1,152

Meats, Poultry, Fish, And Eggs:


$865

Fruits And Vegetables:


$712

Cereals And Bakery Products:


Dairy Products:
Other Food At Home:

$578
$1,891

AGE & PRE-TAX INCOME: Average Annual Household Food Expenditures - 45 - 54


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey
Less Than $5,000 - $10,000 - $15,000 - $20,000 - $30,000 $5,000
$9,999
$14,999
$19,999
$29,999
$39,999

Meats, Poultry, Fish, And Eggs:


Beef
Pork
Poultry
Other Meat
Fish And Seafood
Eggs
Fruits And Vegetables:
Fresh Vegetables
Fresh Fruits
Processed Fruits
Processed Vegetables
Cereals And Bakery Products:
Bakery Products
Cereals And Cereal Products
Dairy Products:
Other Dairy Products
Fresh Milk And Cream
Other Food At Home:
Miscellaneous Foods
Nonalcoholic Beverages
Sugar And Other Sweets
Fats And Oils
Food For Out-Of-Town Trips

Food Away From Home


Alcoholic Beverages

$40,000 $49,999

$50,000 $69,999

$70,000 And Over

607
736
855
1,016
2,129
2,530
2,310
4,005
10,783
-$5,489 $7,973 $12,423 $17,347 $25,060 $34,736 $44,462 $59,895 $134,803
$25,008 $18,085 $22,060 $23,494 $28,554 $34,756 $39,502 $49,991 $87,610
1.6
1.6
2.0
2.2
2.2
2.3
2.4
2.7
3.1
$3,674 $3,172 $3,593 $3,081 $4,158 $4,729 $5,571 $6,553 $10,176
$2,452 $2,346 $2,306 $2,092 $2,745 $2,858 $3,331 $3,806
$5,256
$603
$124
$136
$110
$76
$127
$30
$411
$116
$140
$74
$80
$359
$246
$113
$267
$163
$104
$812
$71
$375
$76
$71
$34

$616
$155
$118
$145
$72
$96
$30
$432
$133
$156
$66
$76
$276
$194
$82
$208
$103
$105
$815
$64
$404
$82
$64
$10

$649
$217
$135
$112
$70
$69
$46
$365
$138
$95
$59
$72
$319
$211
$107
$250
$106
$143
$724
$77
$318
$79
$77
$9

$512
$145
$98
$94
$70
$75
$31
$280
$88
$97
$45
$50
$273
$174
$98
$222
$135
$86
$805
$53
$415
$68
$53
$15

$713
$225
$141
$122
$87
$100
$39
$464
$147
$153
$87
$77
$372
$252
$120
$283
$161
$121
$913
$71
$438
$92
$71
$17

$672
$204
$140
$130
$94
$70
$35
$475
$143
$153
$83
$97
$353
$230
$124
$323
$187
$136
$1,035
$73
$509
$101
$73
$28

$834
$227
$164
$142
$122
$143
$37
$595
$198
$197
$104
$96
$418
$293
$125
$356
$220
$137
$1,127
$91
$567
$114
$91
$18

$865
$258
$194
$142
$111
$121
$39
$629
$204
$204
$116
$105
$485
$340
$145
$415
$261
$154
$1,412
$99
$703
$163
$99
$41

$1,195
$349
$218
$213
$170
$195
$50
$906
$304
$309
$158
$135
$675
$464
$211
$562
$364
$198
$1,918
$129
$981
$203
$129
$86

$1,223
$138

$826
$123

$1,287
$167

$989
$334

$1,413
$271

$1,871
$276

$2,240
$433

$2,747
$451

$4,920
$839

235

Item
Number of consumer units (000)
Pre-Tax Income
Average Annual Expenditures
Average Number Of Persons
Food:
Food At Home:

AGE & PRE-TAX INCOME: Distribution of Food Expenditures - 45 - 54


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey
Less Than
$5,000 $10,000 $15,000 $20,000 $30,000 $40,000 $5,000
$9,999
$14,999
$19,999
$29,999
$39,999
$49,999

Meats, Poultry, Fish, And Eggs:


Beef
Pork
Poultry
Other Meat
Fish And Seafood
Eggs
Fruits And Vegetables:
Fresh Vegetables
Fresh Fruits
Processed Fruits
Processed Vegetables
Cereals And Bakery Products:
Bakery Products
Cereals And Cereal Products
Dairy Products:
Other Dairy Products
Fresh Milk And Cream
Other Food At Home:
Miscellaneous Foods
Nonalcoholic Beverages
Sugar And Other Sweets
Fats And Oils
Food For Out-Of-Town Trips

Food Away From Home

607
-$5,489
$25,008
1.6
100.00%
66.74%

$50,000 $69,999

$70,000 And Over

736
855
1,016
2,129
2,530
2,310
4,005
10,783
$7,973
$12,423 $17,347 $25,060 $34,736 $44,462 $59,895 $134,803
$18,085
$22,060 $23,494 $28,554 $34,756 $39,502 $49,991
$87,610
1.6
2.0
2.2
2.2
2.3
2.4
2.7
3.1
100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
73.96%
64.18% 67.90% 66.02% 60.44% 59.79% 58.08%
51.65%

24.59%
20.56%
22.55%
18.24%
12.60%
21.06%
4.98%
16.76%
28.22%
34.06%
18.00%
19.46%
14.64%
68.52%
31.48%
10.89%
61.05%
38.95%
33.12%
8.74%
46.18%
9.36%
8.74%
4.19%

26.26%
25.16%
19.16%
23.54%
11.69%
15.58%
4.87%
18.41%
30.79%
36.11%
15.28%
17.59%
11.76%
70.29%
29.71%
8.87%
49.52%
50.48%
776.19%
7.85%
49.57%
10.06%
7.85%
1.23%

28.14%
33.44%
20.80%
17.26%
10.79%
10.63%
7.09%
15.83%
37.81%
26.03%
16.16%
19.73%
13.83%
66.14%
33.54%
10.84%
42.40%
57.20%
506.29%
10.64%
43.92%
10.91%
10.64%
1.24%

24.47%
28.32%
19.14%
18.36%
13.67%
14.65%
6.05%
13.38%
31.43%
34.64%
16.07%
17.86%
13.05%
63.74%
35.90%
10.61%
60.81%
38.74%
936.05%
6.58%
51.55%
8.45%
6.58%
1.86%

25.97%
31.56%
19.78%
17.11%
12.20%
14.03%
5.47%
16.90%
31.68%
32.97%
18.75%
16.59%
13.55%
67.74%
32.26%
10.31%
56.89%
42.76%
754.55%
7.78%
47.97%
10.08%
7.78%
1.86%

23.51%
30.36%
20.83%
19.35%
13.99%
10.42%
5.21%
16.62%
30.11%
32.21%
17.47%
20.42%
12.35%
65.16%
35.13%
11.30%
57.89%
42.11%
761.03%
7.05%
49.18%
9.76%
7.05%
2.71%

25.04%
27.22%
19.66%
17.03%
14.63%
17.15%
4.44%
17.86%
33.28%
33.11%
17.48%
16.13%
12.55%
70.10%
29.90%
10.69%
61.80%
38.48%
822.63%
8.07%
50.31%
10.12%
8.07%
1.60%

22.73%
29.83%
22.43%
16.42%
12.83%
13.99%
4.51%
16.53%
32.43%
32.43%
18.44%
16.69%
12.74%
70.10%
29.90%
10.90%
62.89%
37.11%
916.88%
7.01%
49.79%
11.54%
7.01%
2.90%

22.74%
29.21%
18.24%
17.82%
14.23%
16.32%
4.18%
17.24%
33.55%
34.11%
17.44%
14.90%
12.84%
68.74%
31.26%
10.69%
64.77%
35.23%
968.69%
6.73%
51.15%
10.58%
6.73%
4.48%

49.88%

35.21%

55.81%

47.28%

51.48%

65.47%

67.25%

72.18%

93.61%

236

Item
Number of consumer units (000)
Pre-Tax Income
Average Annual Expenditures
Average Number Of Persons
Food:
Food At Home:

AGE AND PRE-TAX INCOME: Average Household At-Home Food Expenditures


Households 45 - 54
Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Less Than $5,000


Meats, Poultry, Fish, And Eggs:

$603

Fruits And Vegetables:

$411
$359

Cereals And Bakery Products:


Dairy Products:

$267
$812

Other Food At Home:

$5,000 to $9,999
$616

Meats, Poultry, Fish, And Eggs:


$432

Cereals And Bakery Products:


Dairy Products:

237

Fruits And Vegetables:


$276
$208

$815

Other Food At Home:

$10,000 to $14,999
Meats, Poultry, Fish, And Eggs:

$649

Fruits And Vegetables:


Cereals And Bakery Products:
Dairy Products:
Other Food At Home:

$365
$319
$250
$724

AGE AND PRE-TAX INCOME: Average Household At-Home Food Expenditures


Households 45 - 54
Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

$15,000 to $19,999
$512

Meats, Poultry, Fish, And Eggs:


Fruits And Vegetables:

$280

Cereals And Bakery Products:

$273

Dairy Products:

$222

Other Food At Home:

$805

$20,000 to $29,999
$713

Meats, Poultry, Fish, And Eggs:

$372

Cereals And Bakery Products:


Dairy Products:

238

$464

Fruits And Vegetables:

$283

Other Food At Home:

$913

$30,000 to $39,999
$672

Meats, Poultry, Fish, And Eggs:


$475

Fruits And Vegetables:


Cereals And Bakery Products:
Dairy Products:
Other Food At Home:

$353
$323
$1,035

AGE AND PRE-TAX INCOME: Average Household At-Home Food Expenditures


Households 45 - 54
Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

$40,000 to $49,999
$834

Meats, Poultry, Fish, And Eggs:


$595

Fruits And Vegetables:


Cereals And Bakery Products:
Dairy Products:

$418
$356
$1,127

Other Food At Home:

$50,000 to $69,999
Meats, Poultry, Fish, And Eggs:

$865

Fruits And Vegetables:

Dairy Products:

239

Cereals And Bakery Products:

$629
$485
$415

Other Food At Home:

$1,412

$70,000 & Up
Meats, Poultry, Fish, And Eggs:

$1,195

Fruits And Vegetables:

$906
$675

Bakery Products
Bakery Products
Cereals And Bakery Products:

$562
$1,918

AGE & PRE-TAX INCOME: Average Annual Household Food Expenditures - 55 - 64


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey
Less Than $5,000 - $10,000 - $15,000 - $20,000 - $30,000 $5,000
$9,999
$14,999
$19,999
$29,999
$39,999

Meats, Poultry, Fish, And Eggs:


Beef
Pork
Poultry
Other Meat
Fish And Seafood
Eggs
Fruits And Vegetables:
Fresh Fruits
Fresh Vegetables
Processed Fruits
Processed Vegetables
Cereals And Bakery Products:
Bakery Products
Cereals And Cereal Products
Dairy Products:
Other Dairy Products
Fresh Milk And Cream
Other Food At Home:
Miscellaneous Foods
Nonalcoholic Beverages
Sugar And Other Sweets
Fats And Oils
Food For Out-Of-Town Trips

Food Away From Home


Alcoholic Beverages

$40,000 $49,999

$50,000 $69,999

$70,000 And Over

619
866
968
1,119
2,057
2,015
2,010
3,031
6,521
-$2,643 $8,340 $12,385 $17,287 $24,862 $34,064 $44,896 $59,598 $133,893
$25,504 $18,464 $22,177 $27,945 $31,126 $34,637 $39,896 $49,496 $84,697
1.4
1.4
1.6
1.7
1.8
1.9
2.0
2.2
2.5
$3,061 $3,467 $3,071 $3,631 $4,124 $4,219 $5,178 $6,002
$8,988
$2,111 $2,494 $2,180 $2,484 $2,717 $2,526 $3,014 $3,528
$4,589
$572
$149
$151
$91
$61
$76
$43
$363
$119
$125
$59
$60
$266
$196
$70
$224
$113
$111
$687
$338
$222
$63
$47
$17

$579
$109
$134
$147
$64
$101
$25
$488
$170
$151
$78
$89
$347
$203
$144
$250
$156
$94
$829
$411
$251
$77
$66
$24

$542
$137
$110
$96
$77
$83
$39
$342
$111
$114
$58
$58
$308
$198
$110
$230
$129
$101
$757
$359
$232
$76
$62
$28

$552
$161
$142
$77
$82
$59
$32
$450
$153
$153
$71
$72
$324
$222
$102
$275
$155
$120
$884
$433
$265
$80
$76
$30

$642
$181
$118
$116
$87
$104
$35
$505
$161
$161
$101
$83
$355
$246
$108
$284
$174
$110
$932
$452
$277
$89
$86
$28

$587
$158
$128
$112
$69
$87
$33
$441
$160
$126
$76
$79
$345
$245
$99
$284
$174
$110
$870
$418
$266
$84
$74
$28

$671
$188
$126
$112
$84
$116
$45
$558
$175
$193
$101
$89
$404
$285
$119
$326
$202
$124
$1,054
$503
$301
$105
$99
$46

$792
$231
$169
$114
$114
$125
$39
$640
$215
$224
$100
$102
$440
$314
$125
$384
$244
$140
$1,273
$661
$342
$113
$94
$62

$991
$266
$177
$181
$131
$185
$50
$878
$315
$285
$148
$130
$594
$430
$164
$496
$334
$162
$1,630
$809
$435
$166
$121
$100

$950
$232

$974
$96

$891
$213

$1,146
$197

$1,407
$273

$1,693
$248

$2,164
$397

$2,474
$528

$4,399
$808

240

Item
Number of consumer units (000)
Pre-Tax Income
Average Annual Expenditures
Average Number Of Persons
Food:
Food At Home:

AGE & PRE-TAX INCOME: Distribution of Food Expenditures - 55 - 64


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey
Less Than
$5,000 $10,000 $15,000 $20,000 $30,000 $40,000 $5,000
$9,999
$14,999
$19,999
$29,999
$39,999
$49,999

Meats, Poultry, Fish, And Eggs:


Beef
Pork
Poultry
Other Meat
Fish And Seafood
Eggs
Fruits And Vegetables:
Fresh Fruits
Fresh Vegetables
Processed Fruits
Processed Vegetables
Cereals And Bakery Products:
Bakery Products
Cereals And Cereal Products
Dairy Products:
Other Dairy Products
Fresh Milk And Cream
Other Food At Home:
Miscellaneous Foods
Nonalcoholic Beverages
Sugar And Other Sweets
Fats And Oils
Food For Out-Of-Town Trips

Food Away From Home

619
-$2,643
$25,504
1.4
100.00%
68.96%

$50,000 $69,999

$70,000 And Over

866
968
1,119
2,057
2,015
2,010
3,031
6,521
$8,340
$12,385 $17,287 $24,862 $34,064 $44,896 $59,598 $133,893
$18,464
$22,177 $27,945 $31,126 $34,637 $39,896 $49,496
$84,697
1.4
1.6
1.7
1.8
1.9
2.0
2.2
2.5
100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
71.94%
70.99% 68.41% 65.88% 59.87% 58.21% 58.78%
51.06%

27.10%
26.05%
26.40%
15.91%
10.66%
13.29%
7.52%
17.20%
32.78%
34.44%
16.25%
16.53%
12.60%
73.68%
26.32%
10.61%
50.45%
49.55%
32.54%
49.20%
32.31%
9.17%
6.84%
2.47%

23.22%
18.83%
23.14%
25.39%
11.05%
17.44%
4.32%
19.57%
34.84%
30.94%
15.98%
18.24%
13.91%
58.50%
41.50%
10.02%
62.40%
37.60%
33.24%
49.58%
30.28%
9.29%
7.96%
2.90%

24.86%
25.28%
20.30%
17.71%
14.21%
15.31%
7.20%
15.69%
32.46%
33.33%
16.96%
16.96%
14.13%
64.29%
35.71%
10.55%
56.09%
43.91%
34.72%
47.42%
30.65%
10.04%
8.19%
3.70%

22.22%
29.17%
25.72%
13.95%
14.86%
10.69%
5.80%
18.12%
34.00%
34.00%
15.78%
16.00%
13.04%
68.52%
31.48%
11.07%
56.36%
43.64%
35.59%
48.98%
29.98%
9.05%
8.60%
3.39%

23.63%
28.19%
18.38%
18.07%
13.55%
16.20%
5.45%
18.59%
31.88%
31.88%
20.00%
16.44%
13.07%
69.30%
30.42%
10.45%
61.27%
38.73%
34.30%
48.50%
29.72%
9.55%
9.23%
3.00%

23.24%
26.92%
21.81%
19.08%
11.75%
14.82%
5.62%
17.46%
36.28%
28.57%
17.23%
17.91%
13.66%
71.01%
28.70%
11.24%
61.27%
38.73%
34.44%
48.05%
30.57%
9.66%
8.51%
3.22%

22.26%
28.02%
18.78%
16.69%
12.52%
17.29%
6.71%
18.51%
31.36%
34.59%
18.10%
15.95%
13.40%
70.54%
29.46%
10.82%
61.96%
38.04%
34.97%
47.72%
28.56%
9.96%
9.39%
4.36%

22.45%
29.17%
21.34%
14.39%
14.39%
15.78%
4.92%
18.14%
33.59%
35.00%
15.63%
15.94%
12.47%
71.36%
28.41%
10.88%
63.54%
36.46%
36.08%
51.92%
26.87%
8.88%
7.38%
4.87%

21.60%
26.84%
17.86%
18.26%
13.22%
18.67%
5.05%
19.13%
35.88%
32.46%
16.86%
14.81%
12.94%
72.39%
27.61%
10.81%
67.34%
32.66%
35.52%
49.63%
26.69%
10.18%
7.42%
6.13%

31.04%

28.09%

29.01%

31.56%

34.12%

40.13%

41.79%

41.22%

48.94%

241

Item
Number of consumer units (000)
Pre-Tax Income
Average Annual Expenditures
Average Number Of Persons
Food:
Food At Home:

AGE AND PRE-TAX INCOME: Average Household At-Home Food Expenditures


Households 55 - 64
Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Less Than $5,000


$572

Meats, Poultry, Fish, And Eggs:


$363

Fruits And Vegetables:


Cereals And Bakery Products:
Dairy Products:

$266
$224
$687

Other Food At Home:

$5,000 to $9,999
Meats, Poultry, Fish, And Eggs:

$579

Fruits And Vegetables:


$347

Cereals And Bakery Products:


Dairy Products:

242

$488

$250

Other Food At Home:

$829

$10,000 to $14,999
$542

Meats, Poultry, Fish, And Eggs:


$342

Fruits And Vegetables:

$308

Cereals And Bakery Products:


Dairy Products:
Other Food At Home:

$230
$757

AGE AND PRE-TAX INCOME: Average Household At-Home Food Expenditures


Households 55 - 64
Source: Food Institute analysis based on Bureau of Labor Statistics' 2007Consumer Expenditure Survey

$15,000 to $19,999
$552

Meats, Poultry, Fish, And Eggs:


$450

Fruits And Vegetables:


Cereals And Bakery Products:
Other Dairy Products

$324
$275
$884

Dairy Products:

$20,000 to $29,999
Meats, Poultry, Fish, And Eggs:

$642

Fruits And Vegetables:

Dairy Products:

243

Cereals And Bakery Products:

$505
$355
$284

Other Food At Home:

$932

$30,000 to $39,999
Meats, Poultry, Fish, And Eggs:

$587

Fruits And Vegetables:


Cereals And Bakery Products:
Dairy Products:
Other Food At Home:

$441
$345
$284
$870

AGE AND PRE-TAX INCOME: Average Household At-Home Food Expenditures


Households 55 - 64
Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

$40,000 to $49,999
Meats, Poultry, Fish, And Eggs:

$671

Fruits And Vegetables:

$558
$404

Cereals And Bakery Products:


Dairy Products:

$326
$1,054

Other Food At Home:

$50,000 to $69,999
$792

Meats, Poultry, Fish, And Eggs:


$640

Cereals And Bakery Products:


Dairy Products:

244

Fruits And Vegetables:


$440
$384

$1,273

Other Food At Home:

$70,000 & Up
$991

Meats, Poultry, Fish, And Eggs:


$878

Fruits And Vegetables:


$594

Cereals And Bakery Products:


Dairy Products:
Other Food At Home:

$496
$1,630

AGE & PRE-TAX INCOME: Average Annual Household Food Expenditures - 65 and up
Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey
Less Than $5,000 - $10,000 - $15,000 - $20,000 - $30,000 $5,000
$9,999
$14,999
$19,999
$29,999
$39,999

Meats, Poultry, Fish, And Eggs:


Beef
Pork
Poultry
Other Meat
Fish And Seafood
Eggs
Fruits And Vegetables:
Fresh Vegetables
Fresh Fruits
Processed Fruits
Processed Vegetables
Cereals And Bakery Products:
Cereals And Cereal Products
Bakery Products
Dairy Products:
Other Dairy Products
Fresh Milk And Cream
Other Food At Home:
Miscellaneous Foods
Nonalcoholic Beverages
Fats And Oils
Sugar And Other Sweets
Food For Out-Of-Town Trips

Food Away From Home


Alcoholic Beverages

$40,000 $49,999

$50,000 $69,999

$70,000 And Over

775
1,767
3,287
2,951
4,467
2,749
1,796
2,311
3,101
$2,080
$8,333 $12,705 $17,411 $24,672 $34,895 $44,798 $58,693 $121,513
$19,289 $14,164 $18,690 $23,336 $29,323 $34,931 $41,824 $48,717 $79,782
1.4
1.2
1.2
1.4
1.7
1.9
2.0
2.1
2.3
$3,029 $2,073 $2,564 $3,053 $3,727 $4,436 $4,942 $5,921
$8,584
$2,029 $1,592 $1,849 $2,115 $2,496 $2,933 $3,037 $3,447
$4,724
$523
$134
$94
$91
$91
$81
$31
$407
$154
$127
$75
$52
$237
$64
$173
$211
$109
$102
$651
$311
$203
$49
$81
$7

$356
$92
$75
$58
$52
$55
$24
$327
$113
$105
$58
$51
$228
$68
$160
$185
$99
$86
$496
$238
$138
$52
$64
$5

$456
$146
$86
$82
$52
$59
$30
$353
$111
$122
$67
$54
$253
$76
$176
$207
$118
$90
$580
$277
$170
$54
$74
$5

$481
$111
$96
$80
$66
$102
$26
$383
$114
$125
$82
$61
$303
$88
$215
$235
$146
$90
$713
$352
$169
$79
$96
$16

$550
$152
$121
$90
$74
$80
$33
$475
$138
$169
$93
$74
$367
$111
$256
$285
$167
$118
$819
$410
$221
$74
$95
$19

$594
$164
$127
$96
$69
$99
$39
$566
$181
$174
$119
$92
$418
$110
$308
$353
$222
$131
$1,002
$524
$221
$90
$138
$29

$655
$180
$150
$91
$82
$116
$37
$585
$186
$212
$106
$82
$432
$125
$306
$350
$218
$132
$1,014
$491
$253
$85
$134
$51

$784
$206
$178
$118
$119
$123
$40
$638
$206
$219
$116
$98
$481
$136
$345
$376
$238
$138
$1,167
$589
$299
$95
$133
$53

$1,069
$331
$214
$157
$134
$186
$47
$915
$297
$326
$155
$137
$616
$157
$459
$508
$341
$167
$1,616
$786
$388
$122
$214
$105

$1,000
$132

$481
$117

$715
$106

$938
$113

$1,231
$242

$1,503
$251

$1,905
$271

$2,474
$375

$3,859
$699

245

Item
Number of consumer units (000)
Pre-Tax Income
Average Annual Expenditures
Average Number Of Persons
Food:
Food At Home:

AGE & PRE-TAX INCOME: Distribution of Food Expenditures - 65 and up


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey
Less Than
$5,000 $10,000 $15,000 $20,000 $30,000 $40,000 $5,000
$9,999
$14,999
$19,999
$29,999
$39,999
$49,999

Meats, Poultry, Fish, And Eggs:


Beef
Pork
Poultry
Other Meat
Fish And Seafood
Eggs
Fruits And Vegetables:
Fresh Vegetables
Fresh Fruits
Processed Fruits
Processed Vegetables
Cereals And Bakery Products:
Bakery Products
Cereals And Cereal Products
Dairy Products:
Other Dairy Products
Fresh Milk And Cream
Other Food At Home:
Miscellaneous Foods
Nonalcoholic Beverages
Fats And Oils
Sugar And Other Sweets
Food For Out-Of-Town Trips

Food Away From Home

775
$2,080
$19,289
1.4
100.00%
66.99%

$50,000 $69,999

$70,000 And Over

1,767
3,287
2,951
4,467
2,749
1,796
2,311
3,101
$8,333
$12,705 $17,411 $24,672 $34,895 $44,798 $58,693 $121,513
$14,164
$18,690 $23,336 $29,323 $34,931 $41,824 $48,717
$79,782
1.2
1.2
1.4
1.7
1.9
2.0
2.1
2.3
100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
76.80%
72.11% 69.28% 66.97% 66.12% 61.45% 58.22%
55.03%

25.78%
25.62%
17.97%
17.40%
17.40%
15.49%
5.93%
20.06%
37.84%
31.20%
18.43%
12.78%
11.68%
27.00%
73.00%
10.40%
51.66%
48.34%
32.08%
47.77%
31.18%
7.53%
12.44%
1.08%

22.36%
25.84%
21.07%
16.29%
14.61%
15.45%
6.74%
20.54%
34.56%
32.11%
17.74%
15.60%
14.32%
29.82%
70.18%
11.62%
53.51%
46.49%
31.16%
47.98%
27.82%
10.48%
12.90%
1.01%

24.66%
32.02%
18.86%
17.98%
11.40%
12.94%
6.58%
19.09%
31.44%
34.56%
18.98%
15.30%
13.68%
30.04%
69.57%
11.20%
57.00%
43.48%
31.37%
47.76%
29.31%
9.31%
12.76%
0.86%

22.74%
23.08%
19.96%
16.63%
13.72%
21.21%
5.41%
18.11%
29.77%
32.64%
21.41%
15.93%
14.33%
29.04%
70.96%
11.11%
62.13%
38.30%
33.71%
49.37%
23.70%
11.08%
13.46%
2.24%

22.04%
27.64%
22.00%
16.36%
13.45%
14.55%
6.00%
19.03%
29.05%
35.58%
19.58%
15.58%
14.70%
30.25%
69.75%
11.42%
58.60%
41.40%
32.81%
50.06%
26.98%
9.04%
11.60%
2.32%

20.25%
27.61%
21.38%
16.16%
11.62%
16.67%
6.57%
19.30%
31.98%
30.74%
21.02%
16.25%
14.25%
26.32%
73.68%
12.04%
62.89%
37.11%
34.16%
52.30%
22.06%
8.98%
13.77%
2.89%

21.57%
27.48%
22.90%
13.89%
12.52%
17.71%
5.65%
19.26%
31.79%
36.24%
18.12%
14.02%
14.22%
28.94%
70.83%
11.52%
62.29%
37.71%
33.39%
48.42%
24.95%
8.38%
13.21%
5.03%

22.74%
26.28%
22.70%
15.05%
15.18%
15.69%
5.10%
18.51%
32.29%
34.33%
18.18%
15.36%
13.95%
28.27%
71.73%
10.91%
63.30%
36.70%
33.86%
50.47%
25.62%
8.14%
11.40%
4.54%

22.63%
30.96%
20.02%
14.69%
12.54%
17.40%
4.40%
19.37%
32.46%
35.63%
16.94%
14.97%
13.04%
25.49%
74.51%
10.75%
67.13%
32.87%
34.21%
48.64%
24.01%
7.55%
13.24%
6.50%

33.01%

23.20%

27.89%

30.72%

33.03%

33.88%

38.55%

41.78%

44.96%

246

Item
Number of consumer units (000)
Pre-Tax Income
Average Annual Expenditures
Average Number Of Persons
Food:
Food At Home:

AGE AND PRE-TAX INCOME: Average Household At-Home Food Expenditures


Households Over 65
Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Less Than $5,000


$523

Meats, Poultry, Fish, And Eggs:


$407

Fruits And Vegetables:


Cereals And Bakery Products:
Dairy Products:

$237
$211

Other Food At Home:

$651

$5,000 to $9,999
Meats, Poultry, Fish, And Eggs:

$356

Fruits And Vegetables:

Dairy Products:

247

Cereals And Bakery Products:

$327
$228
$185

Other Food At Home:

$496

$10,000 to $14,999
$456

Meats, Poultry, Fish, And Eggs:


$353

Fruits And Vegetables:


Cereals And Bakery Products:
Dairy Products:
Other Food At Home:

$253
$207
$580

AGE AND PRE-TAX INCOME: Average Household At-Home Food Expenditures


Households Over 65
Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

$15,000 to $19,999
$481

Meats, Poultry, Fish, And Eggs:


Fruits And Vegetables:
Cereals And Bakery Products:
Dairy Products:

$383
$303
$235
$713

Other Food At Home:

$20,000 to $29,999
Meats, Poultry, Fish, And Eggs:

$550

Fruits And Vegetables:


$367

Cereals And Bakery Products:


Dairy Products:

248

$475

$285

Other Food At Home:

$819

$30,000 to $39,999
$594

Meats, Poultry, Fish, And Eggs:

$566

Fruits And Vegetables:


Cereals And Bakery Products:
Dairy Products:
Other Food At Home:

$418
$353
$1,002

AGE AND PRE-TAX INCOME: Average Household At-Home Food Expenditures


Households Over 65
Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

$40,000 to $49,999
Meats, Poultry, Fish, And Eggs:

$655

Fruits And Vegetables:

$585
$432

Cereals And Bakery Products:


Dairy Products:

$350
$1,014

Other Food At Home:

$50,000 to $69,999
$784

Meats, Poultry, Fish, And Eggs:

$481

Cereals And Bakery Products:


Dairy Products:

249

$638

Fruits And Vegetables:

$376

Other Food At Home:

$1,167

$70,000 & Up
Meats, Poultry, Fish, And Eggs:

$1,069

Fruits And Vegetables:

$915
$616

Cereals And Bakery Products:


Dairy Products:
Other Food At Home:

$508
$1,616

251

GENDER

GENDER: Average Annual Food Expenditures - Females

Item
Number of Consumer Units (000)
Average Annual Expenditures
Food:
Food At Home:
Meats, Poultry, Fish, And Eggs:
Beef
Pork
Poultry
Fish And Seafood
Other Meat
Eggs
Fruits And Vegetables:
Fresh Fruits
Fresh Vegetables
Processed Fruits
Processed Vegetables
Cereals And Bakery Products:
Bakery Products
Cereals And Cereal Products
Dairy Products:
Other Dairy Products
Fresh Milk And Cream
Other Food At Home:
Miscellaneous Foods
Nonalcoholic Beverages
Sugar And Other Sweets
Fats And Oils
Food For Out-Of-Town Trips

Food Away From Home


Alcoholic Beverages

Average
Females Females
Sing. Female under 25 25 - 34
19,340
1,815
1,945
$28,060
$19,014 $33,553
$3,051
$2,479
$3,547
$1,844
$996
$1,708

Females
35 - 44
1,552
$38,086
$4,158
$2,108

Females
45 - 54
2,680
$33,347
$3,674
$2,187

Females
55 - 64
3,448
$32,798
$3,498
$2,161

Females 65
& Up
7,899
$22,955
$2,427
$1,737

$376
$105
$72
$66
$61
$50
$22
$349
$122
$114
$63
$50
$246
$175
$71
$205
$129
$75
$668
$342
$175
$80
$48
$23

$167
$41
$34
$34
$28
$21
$9
$160
$48
$53
$33
$27
$150
$93
$57
$124
$77
$47
$395
$202
$95
$62
$22
$14

$302
$72
$37
$79
$50
$44
$18
$317
$110
$99
$64
$44
$198
$132
$65
$174
$112
$62
$717
$420
$165
$51
$50
$31

$457
$133
$84
$79
$91
$48
$23
$380
$133
$126
$67
$54
$237
$158
$78
$210
$144
$66
$824
$430
$231
$76
$48
$39

$478
$139
$94
$79
$82
$60
$24
$385
$137
$126
$59
$63
$289
$214
$75
$235
$139
$96
$801
$403
$210
$106
$51
$30

$438
$110
$90
$75
$76
$62
$25
$421
$145
$144
$74
$57
$280
$200
$80
$242
$160
$82
$780
$382
$228
$75
$61
$34

$354
$105
$68
$58
$51
$49
$23
$346
$122
$111
$65
$48
$248
$180
$68
$200
$124
$76
$589
$300
$146
$83
$47
$13

$1,207
$241

$1,483
$327

$1,839
$545

$2,050
$446

$1,487
$280

$1,337
$230

$690
$112

252

Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

GENDER: Average Annual Food Expenditures - Males

Item
Number of Consumer Units (000)
Average Annual Expenditures
Food:
Food At Home:
Meats, Poultry, Fish, And Eggs:
Beef
Pork
Poultry
Fish And Seafood
Other Meat
Eggs
Fruits And Vegetables:
Fresh Fruits
Fresh Vegetables
Processed Fruits
Processed Vegetables
Cereals And Bakery Products:
Bakery Products
Cereals And Cereal Products
Dairy Products:
Other Dairy Products
Fresh Milk And Cream
Other Food At Home:
Miscellaneous Foods
Nonalcoholic Beverages
Sugar And Other Sweets
Fats And Oils
Food For Out-Of-Town Trips

Food Away From Home


Alcoholic Beverages

Average
Single Male
16,141
$31,139
$3,562
$1,689

Males
under 25
2,250
$19,101
$2,604
$1,057

Males
25 - 34
2,797
$33,918
$4,208
$1,721

Males
35 -44
2,683
$37,244
$3,913
$1,874

Males
45-54
2,945
$34,022
$3,793
$1,824

Males
55 - 64
2,565
$32,421
$3,512
$1,797

Males 65
& up
2,901
$27,810
$3,075
$1,690

$382
$100
$68
$69
$67
$55
$22
$275
$94
$81
$57
$43
$215
$148
$66
$183
$109
$74
$635
$329
$181
$58
$43
$24

$199
$65
$30
$35
$22
$35
$12
$149
$51
$45
$34
$19
$130
$79
$51
$128
$74
$54
$450
$244
$128
$41
$27
$10

$390
$94
$64
$80
$73
$53
$26
$265
$87
$79
$60
$38
$227
$162
$65
$181
$117
$64
$658
$360
$186
$50
$40
$22

$475
$131
$89
$93
$74
$62
$26
$278
$87
$88
$54
$49
$210
$146
$64
$193
$112
$81
$717
$356
$223
$58
$47
$34

$435
$121
$77
$70
$84
$63
$20
$274
$86
$91
$56
$42
$222
$149
$73
$208
$127
$81
$685
$343
$206
$56
$48
$31

$362
$92
$62
$66
$61
$59
$22
$330
$119
$89
$66
$56
$237
$161
$76
$183
$108
$74
$685
$359
$190
$64
$42
$29

$377
$90
$76
$63
$71
$53
$23
$319
$121
$86
$64
$48
$235
$169
$65
$186
$105
$81
$574
$290
$144
$72
$49
$18

$1,873
$640

$1,547
$669

$2,487
$1,050

$2,039
$657

$1,969
$546

$1,714
$617

$1,385
$315

253

Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

GENDER & AGE: Average Annual Food Expenditures


Source: Food Institute Analysis Based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

$2,479
Under 25

$2,604

$3,547
25 - 34

$4,158
35 - 44

$3,913
Female
Male
$3,674

45 - 54

$3,793

$3,498
55 - 64

$3,512

$2,387
65 & Up

$3,075

254

$4,208

GENDER AND AGE:


Female Average Annual Food Expenditures
Food At-Home vs. Food Away-From-Home
Source: Food Institute analysis based on
Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

2500
$2,187
$2,108

$2,050

$1,844

$1,839
$1,708

255

2000

$2,161

$1,737
$1,483

Total
Under 25

$1,487

1500

$1,337
$1,207

$1,209

$996
1000

500

0
Food At Home

Food Away from Home

25-34
34-45
45-54
55-64
65+

GENDER AND AGE:


Males Average Annual Food Expenditures
Food At-Home vs. Food Away-From Home
Source: Food Institute analysis based on
Bureau of Labor Statistics' 2007 Consumer Expenditure Survey
$3,000

$2,487

$2,039

$2,000

$1,874

$1,824

$1,721

$1,689

$1,969

$1,873

$1,797

Total
$1,714

$1,690

Under 25

$1,547

25-34

$1,500

$1,385

34-45
45-54
55-64

$1,057

65+

$1,000

$500

$0
Food At Home

Food Away from Home

256

$2,500

GENDER AND AGE: Distribution of Food At-Home Spending


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Females

Under 25

$167
$160
$150
$124
$395
$302
$317

25 - 34

$198
$174
$717
$457
$380

35 - 44

$237
$210
$824
257

$478
$385
$289

45 - 54
$235

$801
$438
$421
$280

55 - 64
$242

$780
$354
$346
$248

65 & Up
$200

$589

Meats, Poultry, Fish, And Eggs:

Fruits And Vegetables:

Cereals And Bakery Products:

Dairy Products:

Other Food At Home:

GENDER AND AGE: Distribution of Food At-Home Spending


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Males
$199
Under 25

$149
$130
$128
$450
$390
$265
$227

25 - 34
$181

$658
$475
$278
35 - 44

$210
$193
$717
258

$435
$274
45 - 54

$222
$208
$685
$362
$330
$237

55 - 64
$183

$685
$377
$319
$235

65 & Up
$186

$574

Meats, Poultry, Fish, And Eggs:

Fruits And Vegetables:

Cereals And Bakery Products:

Dairy Products:

Other Food At Home:

GENDER & PRE-TAX INCOME: Average Annual Food Expenditures - Females


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey
Less Than $5,000 - $10,000 - $15,000 - $20,000 - $30,000 $5,000
$9,999
$14,999
$19,999
$29,999
$39,999

Meats, Poultry, Fish, And Eggs:


Beef
Pork
Poultry
Other Meat
Fish And Seafood
Eggs
Fruits And Vegetables:
Fresh Fruits
Fresh Vegetables
Processed Fruits
Processed Vegetables
Cereals And Bakery Products:
Bakery Products
Cereals And Cereal Products
Dairy Products:
Other Dairy Products
Fresh Milk And Cream
Other Food At Home:
Miscellaneous Foods
Nonalcoholic Beverages
Sugar And Other Sweets
Fats And Oils
Food For Out-Of-Town Trips

Food Away From Home


Alcoholic Beverages

1,624
$16,043
$2,286
$1,290

2,520
3,103
2,475
3,132
2,264
4,221
$13,189 $18,424 $22,812 $26,643 $32,169 $50,178
$1,789 $2,266 $2,513 $2,940 $3,361 $4,761
$1,321 $1,523 $1,663 $1,834 $2,018 $2,547

$303
$92
$58
$41
$54
$42
$17
$236
$75
$85
$36
$40
$174
$123
$51
$135
$79
$56
$441
$201
$144
$46
$34
$16

$323
$76
$73
$67
$43
$47
$18
$255
$78
$91
$46
$40
$170
$123
$47
$135
$77
$58
$438
$211
$127
$60
$36
$4

$335
$122
$61
$58
$37
$36
$22
$278
$96
$86
$51
$44
$214
$147
$67
$177
$102
$75
$518
$247
$152
$65
$40
$13

$314
$76
$71
$43
$55
$49
$20
$299
$91
$99
$62
$48
$234
$172
$62
$187
$126
$62
$628
$329
$150
$81
$51
$18

$379
$115
$70
$66
$47
$57
$24
$354
$123
$110
$68
$53
$263
$186
$77
$204
$126
$78
$635
$324
$164
$80
$49
$17

$395
$88
$77
$81
$54
$71
$23
$402
$140
$130
$76
$56
$257
$179
$78
$227
$140
$87
$738
$385
$193
$73
$58
$30

$475
$127
$82
$81
$61
$99
$24
$483
$184
$159
$79
$60
$322
$232
$90
$281
$192
$89
$987
$528
$237
$115
$58
$49

$996
$153

$468
$74

$743
$98

$850
$116

$1,106
$187

$1,343
$278

$2,214
$555

259

Item
Number of consumer units (000)
Average Annual Expenditures
Food:
Food At Home:

$40,000
And Over

GENDER & PRE-TAX INCOME: Average Annual Food Expenditures - Males


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey
Less Than $5,000 - $10,000 - $15,000 - $20,000 - $30,000 - $40,000
$5,000
$9,999
$14,999
$19,999
$29,999
$39,999 And Over

Meats, Poultry, Fish, And Eggs:


Beef
Poultry
Pork
Fish And Seafood
Other Meat
Eggs
Fruits And Vegetables:
Fresh Vegetables
Fresh Fruits
Processed Fruits
Processed Vegetables
Cereals And Bakery Products:
Bakery Products
Cereals And Cereal Products
Dairy Products:
Other Dairy Products
Fresh Milk And Cream
Other Food At Home:
Miscellaneous Foods
Nonalcoholic Beverages
Fats And Oils
Sugar And Other Sweets
Food For Out-Of-Town Trips

Food Away From Home


Alcoholic Beverages

1,332
$15,577
$2,238
$962

1,496
1,689
1,550
2,428
2,176
5,470
$15,669 $18,086 $19,985 $24,380 $29,280 $49,713
$2,489 $2,636 $2,626 $2,772 $3,440 $4,957
$1,542 $1,498 $1,411 $1,475 $1,603 $2,098

$257
$56
$56
$41
$19
$25
$13
$175
$52
$46
$24
$22
$140
$88
$51
$116
$54
$56
$352
$197
$104
$20
$26
$11

$264
$94
$55
$64
$55
$35
$21
$208
$79
$89
$53
$42
$168
$128
$76
$128
$87
$76
$473
$277
$205
$46
$51
$8

$377
$84
$78
$72
$60
$52
$26
$229
$76
$86
$45
$38
$180
$131
$66
$172
$92
$80
$526
$249
$160
$43
$56
$6

$346
$73
$51
$54
$47
$46
$20
$299
$58
$81
$55
$37
$225
$144
$55
$169
$105
$66
$568
$298
$118
$38
$53
$12

$311
$93
$53
$60
$53
$45
$20
$252
$66
$82
$63
$46
$178
$135
$57
$140
$97
$65
$532
$275
$177
$41
$40
$8

$374
$107
$70
$58
$49
$77
$22
$241
$78
$80
$57
$38
$232
$137
$63
$178
$105
$74
$618
$296
$158
$43
$60
$29

$429
$121
$84
$84
$97
$62
$23
$308
$103
$120
$64
$50
$226
$180
$75
$204
$136
$79
$770
$430
$221
$48
$73
$47

$1,277
$351

$948
$314

$1,138
$345

$1,215
$523

$1,297
$379

$1,837
$604

$2,859
$1,015

260

Item
Number of consumer units (000)
Average Annual Expenditures
Food:
Food At Home:

GENDER AND PRE-TAX INCOME: Average Annual Food Expenditures


Food At-Home vs. Food-Away-From-Home
Source: Food Institute Analysis Based on Bureau of Labor Statistics' 2007Consumer Expenditure Survey

At-Home Spending
$1,290

> $5,000

$962
$1,321

$5,000 - $9,999

$1,542
$1,523
$1,498

$10,000 - $14,999

Female

$1,663

$15,000 - $19,999

$1,411

Male
$1,834

$20,000 - $29,999

$1,475
$2,018

$30,000 - $39,999

$1,603
$2,547

$40,000 +

261

$2,098

Away-From-Home Spending
$996

> $5,000

$1,277

$5,000 - $9,999
$10,000 - $14,999
$15,000 - $19,999
$20,000 - $29,999
$30,000 - $39,999
$40,000 +

$948
$743
$1,138
$850

Female
$1,215

Male

$1,106
$1,297
$1,343
$1,837
$2,214
$2,859

GENDER AND PRE-TAX INCOME: Distribution of Food At Home Spending


Source: Food Institute Analysis Based on Bureau of Labor Statistics' 2005 Consumer Expenditure Survey

Females
$303
$236
> $5,000

$174
$135
$441
$323
$255

$5,000 - $9,999

$170
$135
$438
$335
$278

$10,000 - $14,999

$214
$177
$518
$314
$299
$234

262

$15,000 - $19,999

$187
$628
$379
$354

$20,000 - $29,999

$263
$204
$635
$395
$402

$30,000 - $39,999

$257
$227
$738
$475
$483

$40,000 +

$322
$281
$987

>Meats,
$5,000Poultry,
5,000 - Fish,
$9,99
0,000
- $14,9
5,000
- $19,9
0,000
- $29,9
0,000 Cereals
- $39,9$40,000
+ Products:
And Eggs:
Fruits
And
Vegetables:
And Bakery

Dairy Products:

Other Food At Home:

GENDER AND PRE-TAX INCOME: Distribution of Food At Home Spending


Source: Food Institute Analysis Based on Bureau of Labor Statistics' 2005 Consumer Expenditure Survey

Males
$257

$5,000 - $9,999

$139
$116

$128

$167

$15,000 - $19,999

$473

$139

$40,000 +

$376

$229

$526
$224

$169

$30,000 - $39,999

$264

$208

$180
$172

$10,000 - $14,999

$20,000 - $29,999

$352

$299

$347
263

> $5,000

$175

$568

$178

$252

$310

$531

$177

$374

$241
$232

$226
$204

$618
$307

$429

$770

Meats, Poultry, Fish, And Eggs:

Fruits And Vegetables:

Cereals And Bakery Products:

Dairy Products:

Other Food At Home:

265

RACE & ETHNICITY

RACE: Average Annual Household Food Expenditures

Item
Number of consumer units (000)
Average Annual Expenditures
Average Number of Persons

Food:
Food At Home:
Meats, Poultry, Fish, And Eggs:
Beef
Pork
Poultry
Fish And Seafood
Other Meat
Eggs
Fruits And Vegetables:
Fresh Fruits
Fresh Vegetables
Processed Fruits
Processed Vegetables
Cereals And Bakery Products:
Bakery Products
Cereals And Cereal Products
Dairy Products:
Other Dairy Products
Fresh Milk And Cream
Other Food At Home:
Miscellaneous Foods
Nonalcoholic Beverages
Sugar And Other Sweets
Fats And Oils
Food For Out-Of-Town Trips

Food Away From Home


Alcoholic Beverages

All Consumer
Units
120,171
$49,638
2.50
$6,133
$3,465
$777
$216
$150
$142
$122
$104
$43
$600
$202
$190
$112
$96
$460
$317
$143
$387
$234
$154
$1,241
$650
$333
$124
$91
$43
$2,668

White & Other


101,509
$51,120
2.40
$6,312
$3,539
$760
$220
$144
$135
$112
$106
$42
$610
$208
$192
$113
$97
$473
$330
$143
$407
$247
$160
$1,290
$680
$340
$129
$93
$47
$2,773

Asian
4,240
$60,402
2.80
$7,139
$3,890
$1,026
$221
$160
$158
$321
$106
$60
$887
$309
$369
$116
$93
$469
$275
$195
$349
$196
$154
$1,159
$549
$343
$133
$93
$40
$3,249

Black or African
American
14,422
$36,067
2.60
$4,601
$2,831
$834
$185
$185
$189
$138
$95
$41
$455
$131
$133
$107
$83
$365
$237
$127
$259
$147
$111
$919
$456
$279
$88
$81
$15
$1,771

$457

$499

$290

$198

266

Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

RACE: Average Annual Food Expenditures


Source: Food Institute Analysis Based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

$ 3,890
$ 3,539

$3,465

$3,249

$ 2,831

$2,773
$2,668

Food Away From Home


$1,771

All Consumer Units

White & Other

Asian

Black or African American

267

Food At Home

RACE: Distribution of Food Spending

Item
Number of consumer units (000)
Average Annual Expenditures
Average Number of Persons

Food:
Food At Home:
Meats, Poultry, Fish, And Eggs:
Beef
Pork
Poultry
Fish And Seafood
Other Meat
Eggs
Fruits And Vegetables:
Fresh Fruits
Fresh Vegetables
Processed Fruits
Processed Vegetables
Cereals And Bakery Products:
Bakery Products
Cereals And Cereal Products
Dairy Products:
Other Dairy Products
Fresh Milk And Cream
Other Food At Home:
Miscellaneous Foods
Nonalcoholic Beverages
Sugar And Other Sweets
Fats And Oils
Food For Out-Of-Town Trips

Food Away From Home

All Consumer
Units
120,171
$49,638
2.50
100.00%
56.50%
22.42%
27.80%
19.31%
18.28%
15.70%
13.38%
5.53%
17.32%
33.67%
31.67%
18.67%
16.00%
13.28%
68.91%
31.09%
11.17%
60.47%
39.79%
35.82%
52.38%
26.83%
9.99%
7.33%
3.46%
43.50%

White & Other


101,509
$51,120
2.40
100.00%
56.07%
21.47%
28.95%
18.95%
17.76%
14.74%
13.95%
5.53%
17.24%
34.10%
31.48%
18.52%
15.90%
13.37%
69.77%
30.23%
11.50%
60.69%
39.31%
36.45%
52.71%
26.36%
10.00%
7.21%
3.64%
43.93%

Asian
4,240
$60,402
2.80
100.00%
54.49%
26.38%
21.54%
15.59%
15.40%
31.29%
10.33%
5.85%
22.80%
34.84%
41.60%
13.08%
10.48%
12.06%
58.64%
41.58%
8.97%
56.16%
44.13%
29.79%
47.37%
29.59%
11.48%
8.02%
3.45%
45.51%

Black or African
American
14,422
$36,067
2.60
100.00%
61.53%
29.46%
22.18%
22.18%
22.66%
16.55%
11.39%
4.92%
16.07%
28.79%
29.23%
23.52%
18.24%
12.89%
64.93%
34.79%
9.15%
56.76%
42.86%
32.46%
49.62%
30.36%
9.58%
8.81%
1.63%
38.49%

268

Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

RACE: Distribution of At-Home Food Spending


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Asian

Black or African American


26.38%

29.79%

29.46%

32.46%

8.97%
22.80%
12.06%

9.15%

Total Food
Spending =
$3,890

16.07%

Total Food
Spending =
$2,831

269

12.89%

White and Other


21.47%

Meats, Poultry, Fish


& Eggs
Fruits & Vegetables

36.45%

Cereal & Bakery


17.24%

Dairy Products
Other Food At Home
11.50%

13.37%

Total Food
Spending =
$3,539

*All other races includes Native Hawaiian or Pacific Islander, American Indian or Alaska Native and approximately 1.3% reporting more than one race.

RACE: Food Spending As A Percent of Annual Expenditures

Item
Number of consumer units (000)
Average Annual Expenditures
Average Number of Persons

Food:
Food At Home:
Meats, Poultry, Fish, And Eggs:
Beef
Pork
Poultry
Other Meat
Fish And Seafood
Eggs
Fruits And Vegetables:
Fresh Fruits
Fresh Vegetables
Processed Fruits
Processed Vegetables
Cereals And Bakery Products:
Bakery Products
Cereals And Cereal Products
Dairy Products:
Other Dairy Products
Fresh Milk And Cream
Other Food At Home:
Miscellaneous Foods
Nonalcoholic Beverages
Sugar And Other Sweets
Fats And Oils
Food For Out-Of-Town Trips

Food Away From Home


Alcoholic Beverages

All Consumer
Units
120,171
$49,638
2.50
12.4%
7.0%
1.6%
0.4%
0.3%
0.3%
0.3%
0.2%
0.1%
1.2%
0.0%
0.4%
0.2%
0.2%
0.9%
0.6%
0.3%
0.8%
0.5%
0.3%
2.5%
1.3%
0.7%
0.3%
0.2%
0.1%
5.4%

0.9%

White & Other Asian


101,509
4,240
$51,120
$60,402
2.40
2.80
12.3%
11.8%
6.9%
6.4%
1.5%
1.7%
0.4%
0.4%
0.3%
0.3%
0.3%
0.3%
0.3%
0.3%
0.2%
0.5%
0.1%
0.1%
1.2%
1.5%
0.0%
0.0%
0.4%
0.6%
0.2%
0.2%
0.2%
0.2%
0.9%
0.8%
0.6%
0.5%
0.3%
0.3%
0.8%
0.6%
0.5%
0.3%
0.3%
0.3%
2.5%
1.9%
1.3%
0.9%
0.7%
0.6%
0.3%
0.2%
0.2%
0.2%
0.1%
0.1%
5.4%
5.4%

1.0%

0.5%

Black or
African
American
14,422
$36,067
2.60
12.8%
7.8%
2.3%
0.5%
0.5%
0.5%
0.5%
0.4%
0.1%
1.3%
0.0%
0.4%
0.3%
0.2%
1.0%
0.7%
0.4%
0.7%
0.4%
0.3%
2.5%
1.3%
0.8%
0.2%
0.2%
N/A
4.9%

0.5%

270

Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

ETHNIC COMPOSITION: Average Annual Household Food Expenditures


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Food:
Food At Home:
Meats, Poultry, Fish, And Eggs:
Beef
Pork
Poultry
Fish And Seafood
Other Meat
Eggs
Fruits And Vegetables:
Fresh Fruits
Fresh Vegetables
Processed Fruits
Processed Vegetables
Cereals And Bakery Products:
Bakery Products
Cereals And Cereal Products
Dairy Products:
Other Dairy Products
Fresh Milk And Cream
Other Food At Home:
Miscellaneous Foods
Nonalcoholic Beverages
Sugar And Other Sweets
Fats And Oils
Food For Out-Of-Town Trips

Food Away From Home


Alcoholic Beverages

Hispanic or
Latino

120,171
$49,638
2.5

14,185
$41,501
3.2

105,987
$50,720
2.4

91,734
$53,003
2.3

14,253
$35,984
2.6

$6,133
$3,465

$5,933
$3,424

$6,160
$3,470

$6,399
$3,568

$4,603
$2,831

$777
$216
$150
$142
$122
$104
$43
$600
$202
$190
$112
$96
$460
$317
$143
$387
$234
$154
$1,241
$650
$333
$124
$91
$43

$890
$255
$162
$193
$119
$101
$60
$652
$227
$229
$106
$91
$410
$255
$154
$368
$200
$168
$1,104
$546
$345
$97
$90
$27

$763
$211
$148
$136
$122
$105
$41
$593
$199
$186
$113
$96
$466
$324
$141
$390
$238
$152
$1,258
$662
$332
$128
$91
$45

$752
$215
$142
$127
$120
$107
$40
$615
$209
$194
$114
$98
$481
$338
$143
$410
$252
$158
$1,310
$694
$340
$134
$93
$50

$832
$186
$185
$189
$138
$93
$41
$455
$132
$133
$107
$83
$366
$238
$127
$258
$146
$112
$920
$457
$279
$88
$81
$15

$2,668
$457

$2,508
$262

$2,690
$481

$2,831
$525

$1,772
$193

271

Item
Number of consumer units (000)
Average Annual Expenditures
Average Number of Persons

All Consumer
Units

Not Hispanic or Latino


Total nonBlack or
Hispanic or
White & all
African
Latino
other races
American

ETHNIC: Average Annual Household Food Expenditures


Food At-Home vs. Food Away-From-Home
Source: Food Institute Analysis Based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey
$3,568
$3,465

$3,470

$3,424

$2,831

$2,831

$2,690

$2,668
$2,508

Food At Home
Food Away From Home

All Consumer Units

Hispanic or Latino

Total Non-Hispanic or
Latino

White and all Other Races

Black or African
American

272

$1,772

ETHNIC COMPOSITION: Distribution of Food Spending


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Average Number of Persons

Food:
Food At Home:
Meats, Poultry, Fish, And Eggs:
Beef
Pork
Other Meat
Poultry
Fish And Seafood
Eggs
Fruits And Vegetables:
Fresh Fruits
Fresh Vegetables
Processed Fruits
Processed Vegetables
Cereals And Bakery Products:
Cereals And Cereal Products
Bakery Products
Dairy Products:
Fresh Milk And Cream
Other Dairy Products
Other Food At Home:
Sugar And Other Sweets
Fats And Oils
Miscellaneous Foods
Nonalcoholic Beverages
Food For Out-Of-Town Trips

Food Away From Home

All Consumer
Units

Hispanic or
Latino

120,171
$49,638
2.5

14,185
$41,501
3.2

105,987
$50,720
2.4

91,734
$53,003
2.3

14,253
$35,984
2.6

100.00%
56.50%

100.00%
57.71%

100.00%
56.33%

100.00%
55.76%

100.00%
61.50%

22.42%
6.23%
4.33%
4.10%
3.52%
3.00%
1.24%
9.78%
33.67%
31.67%
18.67%
16.00%
13.28%
68.91%
31.09%
11.17%
3.82%
39.79%
35.82%
52.38%
26.83%
9.99%
7.33%
3.46%

25.99%
7.45%
4.73%
5.64%
3.48%
2.95%
1.75%
10.99%
34.82%
35.12%
16.26%
13.96%
11.97%
62.20%
37.56%
10.75%
3.37%
45.65%
32.24%
49.46%
31.25%
8.79%
8.15%
2.45%

21.99%
6.08%
4.27%
3.92%
3.52%
3.03%
1.18%
9.63%
33.56%
31.37%
19.06%
16.19%
13.43%
69.53%
30.26%
11.24%
3.86%
38.97%
36.25%
52.62%
26.39%
10.17%
7.23%
3.58%

21.08%
6.03%
3.98%
3.56%
3.36%
3.00%
1.12%
9.61%
33.98%
31.54%
18.54%
15.93%
13.48%
70.27%
29.73%
11.49%
3.94%
38.54%
36.72%
52.98%
25.95%
10.23%
7.10%
3.82%

29.39%
6.57%
6.53%
6.68%
4.87%
3.29%
1.45%
9.88%
29.01%
29.23%
23.52%
18.24%
12.93%
65.03%
34.70%
9.11%
3.17%
43.41%
32.50%
49.67%
30.33%
9.57%
8.80%
1.63%

43.50%

42.27%

43.67%

44.24%

38.50%

273

Item
Number of consumer units (000)
Average Annual Expenditures

Not Hispanic or Latino


Total nonBlack or
Hispanic or
White & all
African
Latino
other races
American

ETHNIC COMPOSITION: Distribution of At-Home Food Spending


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Hispanic or Latino

Non-Hispanic or Latino
21.99%

25.99%
32.24%
36.25%

17.09%
Total At-Home
Food Spending:
$3,424

19.04%
10.75%
11.97%

Total At-Home
Food Spending:
$3,470

11.24%

13.43%

White & All Other Races


Total At-Home
Food Spending:
$3,568
Meats, Poultry, Fish &
Eggs
Fruits & Vegetables

21.08%

274

Non-Hispanic or Latino Breakdown

Black or African American


Total At-Home
Food Spending:
$2,831
29.39%

32.50%

36.72%

Cereal & Bakery

17.24%

Dairy Products
Other Food At Home

11.49%

16.07%
13.48%

9.11%
12.93%

ETHNIC COMPOSITION: Food Spending As A Percent Of Annual Expenditures


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Average Number of Persons

Food:
Food At Home:
Meats, Poultry, Fish, And Eggs:
Beef
Pork
Poultry
Other Meat
Fish And Seafood
Eggs
Fruits And Vegetables:
Fresh Fruits
Fresh Vegetables
Processed Fruits
Processed Vegetables
Cereals And Bakery Products:
Bakery Products
Cereals And Cereal Products
Dairy Products:
Other Dairy Products
Fresh Milk And Cream
Other Food At Home:
Miscellaneous Foods
Nonalcoholic Beverages
Sugar And Other Sweets
Fats And Oils
Food For Out-Of-Town Trips

Food Away From Home


Alcoholic Beverages

All Consumer
Units
120,171
$49,638

Hispanic or
Latino
14,185
$41,501

2.5

3.2

2.4

2.3

2.6

12.4%
7.0%

14.3%
8.3%

12.1%
6.8%

12.1%
6.7%

12.8%
7.9%

1.6%
0.4%
0.3%
0.3%
0.2%
0.2%
0.1%
1.2%
0.4%
0.4%
0.2%
0.2%
0.9%
0.6%
0.3%
0.8%
0.5%
0.3%
2.5%
1.3%
0.7%
0.3%
0.2%
0.1%

2.1%
0.6%
0.4%
0.5%
0.2%
0.3%
0.1%
1.6%
0.5%
0.6%
0.3%
0.2%
1.0%
0.6%
0.4%
0.9%
0.5%
0.4%
2.7%
1.3%
0.8%
0.2%
0.2%
0.1%

1.5%
0.4%
0.3%
0.3%
0.2%
0.2%
0.1%
1.2%
0.4%
0.4%
0.2%
0.2%
0.9%
0.6%
0.3%
0.8%
0.5%
0.3%
2.5%
1.3%
0.7%
0.3%
0.2%
0.1%

1.4%
0.4%
0.3%
0.2%
0.2%
0.2%
0.1%
1.2%
0.4%
0.4%
0.2%
0.2%
0.9%
0.6%
0.3%
0.8%
0.5%
0.3%
2.5%
1.3%
0.6%
0.3%
0.2%
0.1%

2.3%
0.5%
0.5%
0.5%
0.3%
0.4%
0.1%
1.3%
0.4%
0.4%
0.3%
0.2%
1.0%
0.7%
0.4%
0.7%
0.4%
0.3%
2.6%
1.3%
0.8%
0.2%
0.2%
N/A

5.4%
0.9%

6.0%
0.6%

5.3%
0.9%

5.3%
1.0%

4.9%
0.5%

275

Item
Number of consumer units (000)
Average Annual Expenditures

Not Hispanic or Latino


Total nonBlack or
Hispanic or
White & all
African
Latino
other races
American
105,987
91,734
14,253
$50,720
$53,003
$35,984

277

REGION

REGIONS: Average Annual Household Food Expenditures


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Meats, Poultry, Fish, And Eggs:


Beef
Pork
Poultry
Fish And Seafood
Other Meat
Eggs
Fruits And Vegetables:
Fresh Fruits
Fresh Vegetables
Processed Fruits
Processed Vegetables
Cereals And Bakery Products:
Bakery Products
Cereals And Cereal Products
Dairy Products:
Other Dairy Products
Fresh Milk And Cream
Other Food At Home:
Miscellaneous Foods
Nonalcoholic Beverages
Sugar And Other Sweets
Fats And Oils
Food For Out-Of-Town Trips

Food Away From Home


Alcoholic Beverages

Average Northeast Midwest South


119,507
22,570
27,334
42,804
$49,279 $50,703 $46,812 $45,225
$6,122
$6,320
$5,778 $5,715
$3,441
$3,529
$3,256 $3,223

West

26,800
$57,124
$6,981
$3,918

$787
$226
$153
$141
$122
$105
$40
$596
$199
$192
$111
$95
$453
$310
$143
$378
$231
$147
$1,227
$638
$333
$125
$89
$43

$825
$212
$145
$159
$147
$120
$41
$641
$212
$208
$128
$93
$486
$331
$156
$390
$244
$146
$1,187
$604
$326
$125
$90
$43

$715
$212
$148
$113
$99
$112
$31
$538
$186
$162
$103
$87
$438
$306
$133
$370
$231
$139
$1,195
$627
$315
$129
$84
$40

$767
$225
$162
$143
$106
$94
$38
$532
$167
$174
$96
$96
$423
$291
$132
$347
$202
$146
$1,154
$596
$326
$115
$85
$32

$864
$254
$153
$152
$151
$102
$51
$725
$253
$239
$129
$104
$489
$330
$160
$425
$267
$158
$1,414
$748
$369
$135
$98
$64

$2,681
$477

$2,791
$513

$2,522
$512

$2,492
$374

$3,063
$576

278

Item
Number of consumer units (000)
Average Annual Expenditures
Food:
Food At Home:

REGION: Total Food Spending


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

$6,981
$6,320
$5,715

Midwest

South

279

$5,778

Northeast

West

REGIONS: Average Annual Household Food Expenditures


Food At-Home vs. Food-Away-From-Home
Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

$3,918
$3,529
$3,256

$3,223
$3,063

$2,791
$2,492

280

$2,522

Northeast

Midwest

Food At Home

South

Food Away From Home

West

REGIONS: Distribution of Food Spending


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Meats, Poultry, Fish, And Eggs:


Beef
Pork
Other Meat
Poultry
Fish And Seafood
Eggs
Fruits And Vegetables:
Fresh Fruits
Fresh Vegetables
Processed Fruits
Processed Vegetables
Cereals And Bakery Products:
Cereals And Cereal Products
Bakery Products
Dairy Products:
Fresh Milk And Cream
Other Dairy Products
Other Food At Home:
Sugar And Other Sweets
Fats And Oils
Miscellaneous Foods
Nonalcoholic Beverages
Food For Out-Of-Town Trips

Food Away From Home

Average
119,507
$49,279
100.0%
56.21%

Northeast

Midwest

South

West

22,570
$50,703
100.0%
55.84%

27,334
$46,812
100.0%
56.35%

42,804
$45,225
100.0%
56.40%

26,800
$57,124
100.0%
56.12%

22.87%
28.72%
19.44%
19.44%
15.50%
13.34%
5.08%
17.32%
33.39%
32.21%
18.62%
15.94%
13.16%
68.43%
31.57%
10.99%
61.11%
38.89%
35.66%
52.00%
27.14%
10.19%
7.25%
3.50%

23.38%
25.70%
17.58%
17.58%
17.82%
14.55%
4.97%
18.16%
33.07%
32.45%
19.97%
14.51%
13.77%
68.11%
32.10%
11.05%
62.56%
37.44%
33.64%
50.88%
27.46%
10.53%
7.58%
3.62%

21.96%
29.65%
20.70%
20.70%
13.85%
15.66%
4.34%
16.52%
34.57%
30.11%
19.14%
16.17%
13.45%
69.86%
30.37%
11.36%
62.43%
37.57%
36.70%
52.47%
26.36%
10.79%
7.03%
3.35%

23.80%
29.34%
21.12%
21.12%
13.82%
12.26%
4.95%
16.51%
31.39%
32.71%
18.05%
18.05%
13.12%
68.79%
31.21%
10.77%
58.21%
42.07%
35.81%
51.65%
28.25%
9.97%
7.37%
2.77%

22.05%
29.40%
17.71%
17.71%
17.48%
11.81%
5.90%
18.50%
34.90%
32.97%
17.79%
14.34%
12.48%
67.48%
32.72%
10.85%
62.82%
37.18%
36.09%
52.90%
26.10%
9.55%
6.93%
4.53%

77.91%

79.09%

77.46%

77.32%

78.18%

281

Item
Number of consumer units (000)
Average Annual Expenditures
Food:
Food At Home:

REGIONS: Distribution of At-Home Food Spending


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Northeast

Midwest
23.38%

21.96%

33.64%
36.70%

16.52%

18.16%
11.05%

11.36%

13.45%

Total Food AtHome Spending =


$3,232
282

13.77%

Total At-Home
Food Spending =
$3,645

South
Meats, Poultry, Fish,
and Eggs
Fruits and
Vegetables

West
22.05%

23.80%
35.81%

36.09%

Cereals and Bakery


Products
Dairy Products

18.50%

16.51%

Other Food At Home


10.77%
13.12%

Total Food AtHome Spending =


$3,011

10.85%

12.48%

Total Food AtHome Spending =


$3,527

REGION: Food Spending As A Percent of Annual Expenditures


Item
Number of consumer units (000)
Average Annual Expenditures
Food:
Food At Home:
Meats, Poultry, Fish, And Eggs:
Beef
Pork
Poultry
Other Meat
Fish And Seafood
Eggs
Fruits And Vegetables:
Fresh Fruits
Fresh Vegetables
Processed Fruits
Processed Vegetables
Cereals And Bakery Products:
Bakery Products
Cereals And Cereal Products
Dairy Products:
Other Dairy Products
Fresh Milk And Cream
Other Food At Home:
Miscellaneous Foods
Nonalcoholic Beverages
Sugar And Other Sweets
Fats And Oils
Food For Out-Of-Town Trips

Food Away From Home


Alcoholic Beverages

Average
119,507
$49,279

Northeast
22,570
$50,703

Midwest
27,334
$46,812

South
42,804
$45,225

West
26,800
$57,124

7.0%
1.6%
0.4%
0.3%
0.3%
0.2%
0.2%
0.1%
1.2%
0.4%
0.4%
0.2%
2.5%
0.9%
0.6%
0.3%
0.8%
0.5%
0.3%
2.5%
1.3%
0.7%
0.3%
0.2%
0.1%
5.4%

7.0%
1.6%
0.4%
0.3%
0.3%
0.2%
0.3%
0.1%
1.3%
0.4%
0.4%
0.3%
2.4%
1.0%
0.7%
0.3%
0.8%
0.5%
0.3%
2.4%
1.2%
0.6%
0.2%
0.2%
0.1%
5.5%

6.8%
1.4%
0.4%
0.3%
0.2%
0.2%
0.2%
0.1%
1.1%
0.4%
0.3%
0.2%
2.5%
0.9%
0.7%
0.3%
0.8%
0.5%
0.3%
2.5%
1.3%
0.7%
0.3%
0.2%
0.1%
5.3%

7.3%
1.7%
0.5%
0.4%
0.3%
0.2%
0.2%
0.1%
1.2%
0.4%
0.4%
0.2%
2.6%
1.0%
0.7%
0.3%
0.8%
0.5%
0.3%
2.6%
1.4%
0.7%
0.3%
0.2%
0.1%
5.4%

6.8%
1.5%
0.4%
0.3%
0.3%
0.2%
0.3%
0.1%
1.2%
0.4%
0.4%
0.2%
2.5%
0.9%
0.6%
0.3%
0.8%
0.5%
0.3%
2.5%
1.3%
0.7%
0.2%
0.2%
0.1%
5.3%

0.9%

1.0%

1.0%

0.8%

0.9%

283

Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

REGIONS: Food Spending by Age


Source: Food Institute Analysis Based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

75 & up

$3,487
$3,093
$3,396
$3,923
$5,329
$4,500
$4,582

65 - 74

$5,367
$6,987
$5,736
$5,354

55 - 64

$6,787
$7,777
45 - 54

$6,199
$7,721
$7,623
$7,375

35 - 44

$6,493
$7,159
$6,173
$5,288
$5,412

25 - 34

$6,043

Under 25

$3,741
$3,447
$3,720
$4,342
West

South

Midwest

Northeast

284

$6,915

AGE & REGION: Average Annual Household Food Expenditures - Under 25

Item
Number of consumer units (000)
Average Annual Expenditures
Food:
Food At Home:
Meats, Poultry, Fish, And Eggs:
Beef
Poultry
Pork
Fish And Seafood
Other Meat
Eggs
Fruits And Vegetables:
Fresh Fruits
Fresh Vegetables
Processed Fruits
Processed Vegetables
Cereals And Bakery Products:
Bakery Products
Cereals And Cereal Products
Dairy Products:
Other Dairy Products
Fresh Milk And Cream
Other Food At Home:
Miscellaneous Foods
Nonalcoholic Beverages
Sugar And Other Sweets
Fats And Oils
Food For Out-Of-Town Trips

Food Away From Home


Alcoholic Beverages

Total
Under 25 Northeast
8,158
1,362
$28,881
$25,265
$4,033
$3,573
$2,111
$1,925

Midwest
2,475
$24,161
$3,302
$1,634

South
2,588
$31,028
$4,322
$2,276

West
1,733
$35,321
$5,063
$2,731

$464
$143
$85
$87
$59
$66
$25
$330
$106
$101
$67
$55
$257
$164
$94
$229
$131
$98
$831
$467
$229
$69
$50
$17

$470
$134
$103
$71
$64
$72
$26
$325
$106
$99
$71
$51
$258
$171
$87
$192
$102
$90
$680
$288
$247
$78
$53
$14

$319
$106
$52
$67
$29
$50
$15
$234
$81
$65
$49
$39
$202
$128
$75
$191
$114
$77
$688
$380
$196
$58
$38
$15

$510
$162
$92
$98
$59
$74
$25
$317
$91
$98
$64
$64
$272
$170
$102
$233
$128
$105
$944
$557
$248
$67
$51
$21

$609
$173
$111
$111
$102
$72
$40
$508
$171
$167
$100
$70
$320
$204
$115
$310
$186
$124
$984
$588
$233
$83
$65
$16

$1,922
$467

$1,648
$250

$1,668
$635

$2,046
$472

$2,332
$352

285

Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Report

AGE AND REGION: Average Household Food Expenditures


Food At Home Vs. Food Away From Home - Under 25
Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey
$2,731

$2,332

$2,276
$2,046
$1,925

$1,634

$1,668

286

$1,648

Northeast

Midwest

South
At Home

Away From Home

West

AGE AND REGION: Distribution of At-Home Food Expenditures - Under 25


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Northeast

Midwest
19.52%

24.42%
35.32%
42.11%

14.32%
16.88%
9.97%
11.69%

Total Food At-Home


Expenditures =
$1,634
287

Total Food At-Home


Expenditures = $1,925

12.36%
13.40%

Total Food At-Home


Expenditures = $2,276

South

West
22.41%

22.30%
36.03%

Meats, Poultry,
Fish, And Eggs

41.48%

Fruits And
Vegetables
Cereals And
Bakery Products

13.93%
18.60%

Dairy Products
Other Food At
Home

10.24%

11.95%

11.35%

11.72%

Total Food At-Home


Expenditures = $2,731

AGE & REGION: Average Annual Household Food Expdenditures - 25-34

Item
Number of consumer units (000)
Average Annual Expenditures
Food:
Food At Home:
Meats, Poultry, Fish, And Eggs:
Beef
Poultry
Pork
Fish And Seafood
Other Meat
Eggs
Fruits And Vegetables:
Fresh Fruits
Fresh Vegetables
Processed Fruits
Processed Vegetables
Cereals And Bakery Products:
Bakery Products
Cereals And Cereal Products
Dairy Products:
Other Dairy Products
Fresh Milk And Cream
Other Food At Home:
Miscellaneous Foods
Nonalcoholic Beverages
Sugar And Other Sweets
Fats And Oils
Food For Out-Of-Town Trips

Food Away From Home


Alcoholic Beverages

Total
25 - 34 Northeast Midwest
20,285
3,268
4,355
$47,869 $48,496
$46,158
$6,051
$6,216
$5,640
$3,198
$3,226
$3,052

South
7,473
$43,290
$5,461
$2,826

West
5,188
$55,444
$7,125
$3,827

$719
$213
$140
$134
$104
$91
$37
$533
$166
$170
$110
$87
$416
$273
$144
$360
$210
$150
$1,169
$653
$310
$97
$76
$32

$705
$184
$148
$129
$121
$86
$36
$560
$172
$175
$130
$83
$430
$268
$163
$384
$242
$143
$1,146
$657
$285
$96
$83
$26

$679
$228
$106
$124
$83
$110
$28
$482
$151
$151
$99
$81
$410
$285
$125
$364
$216
$147
$1,117
$639
$292
$91
$68
$27

$661
$197
$139
$133
$78
$77
$36
$441
$121
$142
$92
$86
$380
$250
$130
$301
$160
$141
$1,042
$571
$292
$89
$66
$24

$844
$241
$165
$149
$144
$96
$49
$688
$240
$222
$131
$95
$463
$298
$165
$422
$253
$169
$1,410
$779
$370
$114
$94
$53

$2,853
$585

$2,991
$650

$2,588
$693

$2,635
$438

$3,297
$652

288

Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

AGE AND REGION: Average Household Food Expenditures


Food At Home Vs. Food Away From Home - 25 - 34
Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

$3,827

$3,297

$3,226
$2,991

$3,052
$2,826
$2,635

289

$2,588

Northeast

Midwest

South
At Home

Away From Home

West

AGE AND REGION: Distribution of At-Home Food Expenditures - 25 - 34


Source: Food Institute Analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Northeast

Total Food At-Home


Expenditures = $3,226

Total Food At-Home


Expenditures = $3,052

Midwest
21.85%

35.52%

22.25%

36.60%

15.79%

17.36%

11.93%

11.90%

13.43%

290

13.33%

Fruits And
Vegetables

West

South

Meats, Poultry,
Fish, And Eggs

22.05%

23.39%
36.87%

36.84%

Cereals And
Bakery Products
Dairy Products

Other Food At
Home

17.98%

15.61%

10.65%

13.45%

Total Food At-Home


Expenditures = $2,826

11.03%

12.10%

Total Food At-Home


Expenditures = $3,827

AGE & REGION: Average Annual Household Food Expenditures - 35-44

Item
Number of consumer units (000)
Average Annual Expenditures
Food:
Food At Home:
Meats, Poultry, Fish, And Eggs:
Beef
Pork
Poultry
Fish And Seafood
Other Meat
Eggs
Fruits And Vegetables:
Fresh Fruits
Fresh Vegetables
Processed Fruits
Processed Vegetables
Cereals And Bakery Products:
Bakery Products
Cereals And Cereal Products
Dairy Products:
Other Dairy Products
Fresh Milk And Cream
Other Food At Home:
Miscellaneous Foods
Nonalcoholic Beverages
Sugar And Other Sweets
Fats And Oils
Food For Out-Of-Town Trips

Food Away From Home


Alcoholic Beverages

Total
35 - 44 Northeast
23,683
4,492
$58,447 $60,189
$7,361
$7,417
$4,127
$4,311

Midwest
4,931
$57,469
$7,375
$4,146

South
8,735
$53,644
$6,802
$3,739

West
5,524
$65,693
$8,261
$4,624

$969
$278
$186
$182
$147
$129
$47
$674
$223
$214
$128
$110
$551
$370
$181
$455
$272
$183
$1,477
$787
$395
$148
$99
$48

$1,051
$263
$183
$213
$189
$156
$48
$733
$230
$233
$157
$113
$610
$404
$206
$477
$297
$180
$1,439
$735
$406
$151
$102
$45

$899
$247
$185
$160
$121
$147
$38
$644
$223
$186
$122
$113
$572
$390
$182
$483
$297
$186
$1,547
$842
$377
$170
$105
$53

$898
$265
$186
$180
$120
$106
$41
$586
$187
$187
$110
$102
$492
$333
$159
$407
$230
$178
$1,355
$717
$388
$126
$88
$37

$1,091
$343
$189
$182
$183
$130
$64
$806
$278
$272
$140
$117
$581
$384
$197
$493
$300
$193
$1,653
$900
$418
$162
$111
$62

$3,235
$483

$3,107
$563

$3,229
$498

$3,063
$375

$3,637
$585

291

Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

AGE AND REGION: Average Household Food Expenditures


Food At Home Vs. Food Away From Home - 35 - 44
Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey
$4,624
$4,311
$4,146
$3,739

$3,637

$3,229
$3,107

292

$3,063

Northeast

Midwest

South
At Home

Away From Home

West

AGE AND REGION: Distribution of At-Home Food Expenditures - 35 - 44


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey
Total Food At-Home
Expenditures = $4,311

Northeast

Midwest

Total Food At-Home


Expenditures = $4,146

24.38%
33.38%

21.68%

37.31%

15.53%

17.00%
11.06%
11.65%

13.80%

293

14.15%

South

West
23.59%

24.02%
Meats, Poultry,
Fish, And Eggs

36.24%
35.75%

Fruits And
Vegetables
Cereals And
Bakery Products
15.67%

Dairy Products
Other Food At
Home

10.89%

Total Food At-Home


13.16% Expenditures = $3,739

17.43%

10.66%
12.56%

Total Food At-Home


Expenditures = $4,624

AGE & REGION: Average Annual Household Food Expenditures - 45-54

Item
Number of consumer units (000)
Average Annual Expdenditures
Food:
Food At Home:
Meats, Poultry, Fish, And Eggs:
Beef
Pork
Poultry
Fish And Seafood
Other Meat
Eggs
Fruits And Vegetables:
Fresh Fruits
Fresh Vegetables
Processed Fruits
Processed Vegetables
Cereals And Bakery Products:
Bakery Products
Cereals And Cereal Products
Dairy Products:
Other Dairy Products
Fresh Milk And Cream
Other Food At Home:
Miscellaneous Foods
Nonalcoholic Beverages
Sugar And Other Sweets
Fats And Oils
Food For Out-Of-Town Trips

Food Away From Home


Alcoholic Beverages

Total
45 - 54 Northeast
24,971
5,000
$58,369 $63,575
$7,254
$8,218
$4,019
$4,409

Midwest
5,603
$57,544
$7,069
$3,941

South
8,722
$52,155
$6,583
$3,673

West
5,646
$64,342
$7,702
$4,334

$939
$275
$183
$166
$144
$129
$43
$684
$229
$225
$120
$109
$516
$355
$162
$431
$269
$162
$1,449
$730
$412
$153
$102
$52

$1,051
$284
$179
$204
$179
$156
$48
$795
$268
$258
$152
$117
$579
$394
$185
$482
$302
$180
$1,502
$737
$440
$168
$107
$50

$902
$262
$191
$141
$134
$139
$35
$633
$225
$196
$109
$102
$505
$346
$159
$433
$279
$154
$1,468
$747
$406
$163
$105
$47

$888
$269
$182
$158
$129
$110
$39
$601
$189
$206
$99
$107
$474
$329
$145
$383
$235
$148
$1,325
$656
$392
$140
$98
$38

$967
$291
$177
$173
$150
$125
$52
$777
$265
$259
$140
$113
$543
$371
$172
$463
$287
$176
$1,583
$827
$427
$149
$103
$78

$3,235
$555

$3,809
$650

$3,128
$665

$2,911
$400

$3,368
$606

294

Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

AGE AND REGION: Average Household Food Expenditures


Food At Home Vs. Food Away From Home - 45 - 54
Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

$4,409

$4,334
$3,941
$3,809
$3,673
$3,368
$3,128

295

$2,911

Northeast

Midwest

South
At Home

Away From Home

West

AGE AND REGION: Distribution of At-Home Food Expenditures - 45 - 54


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey
Total Food At-Home
Expenditures = $4,409

Total Food At-Home


Expenditures = $3,941

Midwest

Northeast
23.84%
34.07%

22.89%

37.25%

16.06%

18.03%
10.93%
13.13%

10.99%

296

12.81%

Total Food At-Home


Expenditures = $3,673

West

South
24.18%

22.31%

36.07%
36.53%

Meats, Poultry,
Fish, And Eggs
Fruits And
Vegetables
Cereals And
Bakery Products

17.93%

16.36%

Dairy Products
10.68%

10.43%

Other Food At
Home

12.90%

12.53%

Total Food At-Home


Expenditures = $4,334

AGE & REGION: Average Annual Household Food Expenditures - 55-64

Item
Number of consumer units (000)
Average Annual Expenditures
Food:
Food At Home:
Meats, Poultry, Fish, And Eggs:
Beef
Pork
Poultry
Fish And Seafood
Other Meat
Eggs
Fruits And Vegetables:
Fresh Vegetables
Fresh Fruits
Processed Fruits
Processed Vegetables
Cereals And Bakery Products:
Bakery Products
Cereals And Cereal Products
Dairy Products:
Other Dairy Products
Fresh Milk And Cream
Other Food At Home:
Miscellaneous Foods
Nonalcoholic Beverages
Sugar And Other Sweets
Fats And Oils
Food For Out-Of-Town Trips

Food Away From Home


Alcoholic Beverages

Total
55 - 64
19,207
$52,461
$6,186
$3,488

Northeast
3,757
$53,087
$6,143
$3,365

Midwest
4,584
$50,163
$5,932
$3,373

South
6,936
$47,338
$5,771
$3,305

West
3,929
$63,312
$7,177
$4,014

$779
$212
$152
$136
$133
$103
$42
$648
$213
$224
$110
$101
$454
$322
$132
$377
$242
$135
$1,229
$610
$342
$120
$97
$59

$756
$189
$128
$143
$139
$116
$41
$650
$232
$220
$111
$87
$492
$346
$147
$364
$240
$124
$1,103
$566
$280
$97
$93
$67

$700
$185
$155
$116
$102
$117
$36
$608
$178
$217
$122
$91
$457
$332
$125
$368
$240
$128
$1,240
$624
$344
$126
$88
$57

$816
$228
$174
$143
$126
$104
$41
$565
$185
$186
$91
$104
$415
$296
$120
$359
$216
$143
$1,149
$560
$333
$122
$96
$39

$814
$233
$134
$141
$168
$88
$50
$825
$277
$300
$129
$119
$485
$338
$147
$427
$289
$138
$1,463
$720
$411
$131
$109
$91

$2,699
$505

$2,777
$584

$2,559
$397

$2,466
$405

$3,167
$711

297

Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

AGE AND REGION: Average Household Food Expenditures


Food At Home Vs. Food Away From Home - 55 - 64
Source: Food Institute analysis based on Bureau of Labor Statistics' 2007Consumer Expenditure Survey
$4,014

$3,373

$3,365

$3,305
$3,167

$2,727
$2,559

298

$2,466

Northeast

Midwest

South
At Home

Away From Home

West

AGE AND REGION: Distribution of At-Home Food Expenditures - 55 - 64


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey
Total Food At-Home
Expenditures = $3,365

Midwest

Northeast

Total Food At-Home


Expenditures = $3,373

22.47%
32.78%

20.75%
36.76%

18.03%

19.32%
10.82%
14.62%

10.91%

299

13.55%

Total Food At-Home


Expenditures = $3,308

West

South

20.28%

24.69%
34.77%
36.45%

Meats, Poultry,
Fish, And Eggs
Fruits And
Vegetables

20.55%

Cereals And
Bakery Products
Dairy Products

17.10%
10.86%

10.64%
12.56%

Other Food At
Home

12.08%

Total Food At-Home


Expenditures = $4,014

AGE & REGION: Average Annual Household Food Expenditures - 65-74

Item
Number of consumer units (000)
Average Annual Expenditures
Food:
Food At Home:
Meats, Poultry, Fish, And Eggs:
Beef
Pork
Fish And Seafood
Poultry
Other Meat
Eggs
Fruits And Vegetables:
Fresh Fruits
Fresh Vegetables
Processed Fruits
Processed Vegetables
Cereals And Bakery Products:
Bakery Products
Cereals And Cereal Products
Dairy Products:
Other Dairy Products
Fresh Milk And Cream
Other Food At Home:
Miscellaneous Foods
Nonalcoholic Beverages
Sugar And Other Sweets
Fats And Oils
Food For Out-Of-Town Trips

Food Away From Home


Alcoholic Beverages

Total 65 74
11,888
$41,944
$5,200
$3,208

Northeast
2,115
$41,556
$5,372
$3,148

Midwest
2,815
$40,302
$5,130
$3,049

South
4,393
$39,152
$4,833
$3,119

West
2,565
$48,876
$5,755
$3,587

$731
$198
$162
$123
$118
$92
$38
$601
$198
$198
$108
$96
$436
$311
$126
$353
$225
$129
$1,087
$529
$282
$132
$93
$50

$729
$181
$150
$139
$114
$102
$43
$591
$210
$193
$103
$84
$430
$312
$118
$344
$216
$128
$1,054
$502
$285
$121
$92
$54

$697
$196
$157
$123
$95
$97
$29
$551
$190
$178
$100
$83
$436
$323
$113
$326
$206
$120
$1,040
$501
$265
$138
$90
$46

$741
$205
$181
$105
$125
$88
$38
$587
$180
$202
$101
$104
$419
$293
$126
$344
$208
$136
$1,028
$513
$264
$125
$91
$35

$750
$203
$145
$140
$134
$85
$43
$687
$228
$217
$135
$108
$474
$328
$146
$408
$283
$125
$1,267
$612
$329
$150
$100
$77

$1,992
$342

$2,224
$334

$2,081
$306

$1,714
$277

$2,168
$503

300

Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

AGE AND REGION: Average Household Food Expenditures


Food At Home Vs. Food Away From Home - 65 - 74
Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey
$4,014

$3,148

$3,167

$3,119

$3,049

$2,224
301

$2,081
$1,714

Northeast

Midwest

South
At Home

Away From Home

West

AGE AND REGION: Distribution of At-Home Food Expenditures - 65 - 74


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey
Total Food At-Home
Expenditures = $3,148

Midwest

Northeast

Total Food At-Home


Expenditures = $3,049

23.16%
33.48%

34.11%

22.86%

18.77%

18.07%

10.93%
10.69%

13.66%

302

14.30%

Total Food At-Home


Expenditures = $3,119

West

South

20.91%

23.76%
32.96%
35.32%

Meats, Poultry,
Fish, And Eggs
Fruits And
Vegetables

19.15%

Cereals And
Bakery Products
Dairy Products

18.82%
11.03%

11.37%
13.43%

Other Food At
Home

13.21%

Total Food At-Home


Expenditures = $3,587

AGE & REGION: Average Annual Household Food Expenditures - 75+

Item
Number of consumer units (000)
Average Annual Expenditures
Food:
Food At Home:
Meats, Poultry, Fish, And Eggs:
Beef
Pork
Fish And Seafood
Poultry
Other Meat
Eggs
Fruits And Vegetables:
Fresh Fruits
Fresh Vegetables
Processed Fruits
Processed Vegetables
Cereals And Bakery Products:
Bakery Products
Cereals And Cereal Products
Dairy Products:
Other Dairy Products
Fresh Milk And Cream
Other Food At Home:
Miscellaneous Foods
Nonalcoholic Beverages
Sugar And Other Sweets
Fats And Oils
Food For Out-Of-Town Trips

Food Away From Home


Alcoholic Beverages

Total 75
and over
11,316
$29,718
$3,586
$2,331

Northeast
2,576
$30,168
$3,606
$2,419

Midwest
2,570
$27,850
$3,329
$2,200

South
3,956
$26,864
$3,455
$2,319

West
2,215
$36,587
$4,157
$2,429

$508
$151
$98
$80
$77
$71
$31
$459
$166
$136
$91
$66
$336
$244
$92
$270
$160
$110
$759
$386
$184
$103
$68
$17

$564
$139
$95
$112
$96
$90
$32
$504
$179
$154
$108
$63
$343
$255
$89
$265
$155
$110
$744
$369
$186
$107
$60
$21

$485
$178
$90
$53
$63
$75
$26
$421
$146
$122
$87
$66
$312
$223
$88
$271
$165
$106
$712
$356
$181
$103
$62
$10

$486
$143
$107
$64
$80
$60
$31
$441
$161
$127
$85
$67
$345
$252
$93
$269
$153
$116
$778
$399
$196
$93
$79
$11

$509
$142
$97
$104
$68
$60
$37
$488
$187
$149
$87
$65
$345
$247
$98
$276
$172
$104
$811
$432
$165
$116
$69
$29

$1,255
$201

$1,187
$183

$1,129
$204

$1,136
$165

$1,729
$284

303

Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

AGE AND REGION: Average Household Food Expenditures


Food At Home Vs. Food Away From Home - 75 and Up
Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

$2,429

$2,419
$2,319
$2,200

$1,187

Northeast

304

$1,729

$1,136

$1,129

Midwest

South
At Home

Away From Home

West

AGE AND REGION: Distribution of At-Home Food Expenditures - 75 and Up


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Midwest

Northeast
Total Food At-Home
Expenditures = $2,419

Total Food At-Home


Expenditures = $2,200

23.32%
30.76%

32.36%
22.05%

19.14%

20.84%
10.95%
12.32%

14.18%

305

14.18%

Total Food At-Home


Expenditures = $2,319

West

South
20.96%

20.96%

33.55%
33.39%

Meats, Poultry,
Fish, And Eggs
Fruits And
Vegetables

19.02%

Cereals And
Bakery Products
Dairy Products

11.36%

11.60%
14.88%

Other Food At
Home

20.09%

14.20%

Total Food At-Home


Expenditures = $2,429

REGION & INCOME: Average Annual Household Food Expenditures - Northeast

Item
Number Of Consumer Units (000)
Average Annual Expenditures
Food:
Food At Home:
Meats, Poultry, Fish, And Eggs:
Beef
Pork
Poultry
Other Meat
Fish And Seafood
Eggs
Fruits And Vegetables:
Fresh Fruits
Fresh Vegetables
Processed Fruits
Processed Vegetables
Cereals And Bakery Products:
Bakery Products
Cereals And Cereal Products
Dairy Products:
Other Dairy Products
Fresh Milk And Cream
Other Food At Home:
Miscellaneous Foods
Nonalcoholic Beverages
Sugar And Other Sweets
Fats And Oils
Food For Out-Of-Town Trips

Food Away From Home


Alcoholic Beverages

Less Than
$5,000

$5,000 $9,999

$10,000 $14,999

$15,000 $19,999

$20,000 $29,999

$30,000 $39,999

$40,000 $49,999

$50,000 $69,999

$70,000
And Over

868
$20,338
$2,551
$1,548

1,132
1,435
1,410
2,572
2,314
2,071
$15,706 $19,803 $23,887 $29,355 $35,078 $40,322
$2,589 $3,276 $3,007 $3,993 $4,806 $5,367
$1,842 $2,107 $2,000 $2,581 $2,853 $3,109

3,238
$50,240
$6,755
$3,852

7,530
$85,201
$9,694
$4,991

$471
$81
$115
$101
$46
$99
$28
$266
$75
$93
$42
$56
$223
$143
$79
$157
$68
$89
$431
$183
$134
$59
$45
$10

$425
$92
$71
$93
$49
$89
$31
$368
$121
$137
$68
$42
$259
$150
$109
$186
$98
$88
$605
$263
$198
$89
$44
$11

$508
$108
$96
$113
$55
$99
$36
$406
$134
$137
$78
$57
$294
$186
$109
$241
$128
$113
$658
$341
$183
$65
$55
$14

$526
$141
$109
$92
$78
$75
$31
$360
$130
$98
$80
$51
$280
$187
$93
$230
$133
$97
$604
$306
$170
$61
$52
$15

$637
$185
$107
$113
$86
$109
$35
$493
$158
$156
$108
$70
$362
$241
$121
$295
$173
$122
$794
$371
$238
$95
$69
$21

$652
$154
$137
$121
$110
$95
$34
$543
$163
$177
$117
$86
$385
$264
$121
$322
$192
$130
$952
$474
$288
$97
$69
$24

$738
$211
$134
$135
$109
$115
$35
$551
$192
$172
$101
$86
$418
$276
$142
$335
$207
$128
$1,067
$560
$298
$106
$71
$31

$883
$208
$183
$151
$132
$164
$45
$672
$228
$213
$132
$99
$531
$369
$162
$420
$256
$164
$1,346
$689
$368
$143
$106
$40

$1,141
$301
$176
$232
$170
$211
$51
$897
$298
$296
$178
$126
$688
$476
$212
$552
$367
$184
$1,714
$886
$448
$174
$125
$80

$1,003
$156

$747
$110

$1,169
$152

$1,006
$194

$1,412
$244

$1,954
$325

$2,258
$398

$2,903
$531

$4,703
$905

306

Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

REGION AND INCOME: Average Annual Household Food Expenditures


Food At Home Vs. Food Away From Home
Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Northeast
$7,258
$4,991
$4,703

$3,852

$3,109
$2,903
307

$2,853
$2,581
$2,107

$2,000

$1,954

$1,842
$1,548
$1,412
$1,169
$1,006

$1,003
$747

Less Than $5,000 $5,000 - $9,999

$10,000 $14,999

$15,000 $19,999

Food At Home

$20,000 $29,999

$30,000 $39,999

Food Away From Home

$40,000 $49,999

$50,000 $69,999

$70,000 & Up

REGION AND INCOME: Average Annual Household At-Home Food Expenditures


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Northeast

$5,000-$9,000

$10,000-$14,999

$15,000-$19,999

$20,000-$29,999

$30,000-$39,999

$40,000-$49,999

$50,000-$69,999

$70,000 And Over

$157

$186

$431
$425
$368

$259

$605
$406

$294
$241

$280
$230

$295

$508
$650
$526

$360

$362

$322

$493

$604
$637

308

Less than $5,000

$471

$266
$223

$794
$385

$335

$543

$652
$952

$418

$738

$551

$1,067

$420

$531

$672

$883
$1,346

$552

Meats, Poultry, Fish, & Eggs

$688

$897

$1,141
$1,714

Fruits and Vegetables

Cereals and Bakery Products

Dairy Products

Other Food At Home

REGION & INCOME: Average Annual Household Food Expenditures - Midwest

Item
Number Of Consumer Units (000)
Average Annual Expenditures
Food:
Food At Home:
Meats, Poultry, Fish, And Eggs:
Beef
Pork
Poultry
Fish And Seafood
Other Meat
Eggs
Fruits And Vegetables:
Fresh Fruits
Fresh Vegetables
Processed Fruits
Processed Vegetables
Cereals And Bakery Products:
Bakery Products
Cereals And Cereal Products
Dairy Products:
Other Dairy Products
Fresh Milk And Cream
Other Food At Home:
Miscellaneous Foods
Nonalcoholic Beverages
Sugar And Other Sweets
Fats And Oils
Food For Out-Of-Town Trips

Food Away From Home


Alcoholic Beverages

Less Than
$5,000

$5,000 $9,999

$10,000 $14,999

$15,000 $19,999

$20,000 $29,999

$30,000 $39,999

$40,000 $49,999

$50,000 $69,999

$70,000
And Over

1,212
$16,821
$2,667
$1,457

1,514
1,678
1,578
3,227
3,106
2,608
$15,907 $19,352 $23,462 $28,461 $32,883 $38,423
$2,452 $2,770 $3,375 $4,038 $4,102 $5,188
$1,569 $1,791 $2,189 $2,615 $2,517 $3,116

4,239
$49,151
$6,160
$3,445

8,173
$80,606
$9,010
$4,686

$332
$87
$91
$41
$76
$15
$22
$224
$78
$58
$50
$38
$180
$121
$58
$165
$95
$69
$556
$291
$171
$51
$34
$9

$346
$85
$81
$72
$51
$44
$14
$271
$87
$74
$59
$51
$199
$134
$65
$169
$101
$68
$584
$312
$165
$58
$35
$14

$495
$217
$87
$69
$65
$39
$19
$268
$90
$85
$47
$46
$225
$156
$69
$186
$109
$77
$617
$312
$184
$72
$40
$10

$487
$111
$110
$67
$61
$116
$23
$352
$118
$96
$70
$68
$302
$209
$93
$236
$144
$91
$812
$422
$207
$103
$65
$15

$612
$172
$141
$106
$82
$84
$27
$445
$153
$131
$93
$68
$359
$248
$111
$271
$158
$112
$928
$481
$269
$90
$75
$13

$557
$168
$121
$80
$91
$68
$29
$408
$138
$120
$80
$70
$332
$233
$99
$298
$181
$117
$922
$465
$270
$95
$70
$23

$660
$184
$142
$106
$106
$92
$29
$502
$164
$158
$101
$79
$417
$288
$129
$370
$230
$140
$1,168
$623
$308
$122
$81
$34

$741
$229
$163
$103
$128
$85
$34
$549
$182
$157
$114
$96
$483
$335
$148
$410
$258
$151
$1,262
$646
$368
$120
$88
$39

$1,004
$295
$191
$170
$157
$151
$40
$795
$285
$247
$141
$123
$626
$441
$185
$532
$340
$192
$1,729
$924
$410
$197
$117
$80

$1,210
$275

$883
$216

$979
$216

$1,187
$224

$1,423
$284

$1,585
$399

$2,072
$420

$2,716
$493

$4,324
$873

309

Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

REGION AND INCOME: Average Annual Household Food Expenditures


Food At-Home Vs. Food Away-From-Home
Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Midwest

$4,686
$4,324

$3,445

310

$3,116
$2,716

$2,615

$2,517

$2,189

$2,072

$1,791
$1,585

$1,569

$1,457

$1,423
$1,210

$1,187
$883

Less Than
$5,000

$5,000 - $9,999

$974

$10,000 $14,999

$15,000 $19,999
Food At Home

$20,000 $29,999

$30,000 $39,999

Food Away From Home

$40,000 $49,999

$50,000 $69,999

$70,000 & Up

REGION AND INCOME: Average Annual Household At-Home Food Expenditures


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Midwest

$5,000-$9,000

$10,000-$14,999

$15,000-$19,999

$20,000-$29,999

$30,000-$39,999

$40,000-$49,999

$50,000-$69,999

$70,000 And Over

$705
$486

$293
$244
$189

$238

$298

$639
$583

$376

$780

$293
$237

$262

$578

$359

$821

$334

$411

$872

$358
$304

$320

$643

311

Less than $5,000

$483

$307
$257
$202

$664

$430

$970
$769

$504

$415

$1,089
$440
$387

$777

$536

$483

Meats, Poultry, Fish, & Eggs

$1,183
$589

$774

$1,022
$1,661

Fruits and Vegetables

Cereals and Bakery Products

Dairy Products

Other Food At Home

REGION & INCOME: Average Annual Household Food Expenditures - South

Item
Number Of Consumer Units (000)
Average Annual Expenditures
Food:
Food At Home:
Meats, Poultry, Fish, And Eggs:
Beef
Pork
Poultry
Other Meat
Fish And Seafood
Eggs
Fruits And Vegetables:
Fresh Vegetables
Fresh Fruits
Processed Vegetables
Processed Fruits
Cereals And Bakery Products:
Bakery Products
Cereals And Cereal Products
Dairy Products:
Other Dairy Products
Fresh Milk And Cream
Other Food At Home:
Sugar And Other Sweets
Fats And Oils
Miscellaneous Foods
Nonalcoholic Beverages
Food For Out-Of-Town Trips

Food Away From Home


Alcoholic Beverages

Less Than
$5,000

$5,000 $9,999

$10,000 $14,999

$15,000 $19,999

$20,000 $29,999

$30,000 $39,999

$40,000 $49,999

$50,000 $69,999

$70,000
And Over

1,502
$20,125
$2,981
$1,948

2,211
2,948
3,023
5,653
5,030
4,409
$16,549 $20,665 $23,800 $28,135 $33,792 $38,847
$2,680 $3,158 $3,326 $3,910 $4,487 $5,340
$1,851 $2,274 $2,288 $2,523 $2,726 $3,098

6,273
$47,641
$6,066
$3,323

11,754
$79,027
$8,937
$4,530

$483
$134
$108
$97
$49
$71
$25
$307
$102
$85
$60
$59
$251
$166
$85
$202
$102
$100
$705
$72
$52
$362
$214
$6

$486
$134
$108
$90
$56
$74
$25
$293
$89
$95
$60
$49
$244
$166
$78
$189
$95
$93
$639
$64
$59
$312
$193
$11

$583
$160
$130
$110
$67
$74
$42
$376
$123
$117
$66
$69
$298
$204
$93
$238
$118
$119
$780
$81
$68
$380
$241
$10

$578
$157
$129
$113
$81
$64
$34
$359
$124
$102
$69
$65
$293
$188
$105
$237
$134
$104
$821
$74
$71
$427
$228
$20

$643
$189
$143
$119
$83
$76
$33
$411
$134
$117
$83
$77
$334
$224
$111
$262
$147
$115
$872
$85
$72
$459
$243
$14

$664
$196
$152
$123
$77
$77
$38
$430
$133
$131
$87
$80
$358
$235
$124
$304
$167
$137
$970
$99
$80
$498
$270
$24

$769
$220
$172
$135
$93
$110
$39
$504
$156
$163
$93
$92
$415
$287
$129
$320
$181
$139
$1,089
$103
$93
$556
$312
$25

$777
$228
$171
$145
$93
$103
$36
$536
$177
$167
$96
$96
$440
$311
$129
$387
$226
$161
$1,183
$116
$81
$617
$333
$35

$1,022
$310
$195
$190
$127
$157
$43
$774
$257
$252
$128
$137
$589
$411
$178
$483
$297
$186
$1,661
$170
$107
$862
$461
$60

$1,033
$183

$829
$84

$884
$121

$1,038
$147

$1,387
$212

$1,761
$274

$2,242
$380

$2,742
$433

$4,407
$634

312

Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

REGION AND INCOME: Average Annual Household Food Expenditures


Food At Home Vs. Food Away From Home
Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

South

$4,530
$4,407

$3,323

313

$3,098
$2,742

$2,726
$2,523
$2,288

$2,274
$1,948

$2,242

$1,851

$1,761
$1,387
$1,038

$1,033
$829

Less Than
$5,000

$5,000 - $9,999

$884

$10,000 $14,999

$15,000 $19,999
Food At Home

$20,000 $29,999

$30,000 $39,999

Food Away From Home

$40,000 $49,999

$50,000 $69,999

$70,000 & Up

REGION AND INCOME: Average Annual Household At-Home Food Expenditures


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

South

$5,000-$9,000

$10,000-$14,999

$15,000-$19,999

$20,000-$29,999

$30,000-$39,999

$40,000-$49,999

$50,000-$69,999

$70,000 And Over

$199
$169

$556

$271

$346
$584
$495

$268
$225
$186

$236

$617
$487

$352
$302

$812

$271

$359

$612

$445

314

Less than $5,000

$332

$224
$180
$165

$928

$332
$298

$557

$408

$922

$417
$370

$410

$502

$660
$1,168

$483

$741

$549

$1,262

$532

Meats, Poultry, Fish, & Eggs

$626

$792

$1,004
$1,729

Fruits and Vegetables

Cereals and Bakery Products

Dairy Products

Other Food At Home

REGION & INCOME: Average Annual Household Food Expenditures - West

Item
Number Of Consumer Units (000)
Average Annual Expenditures
Food:
Food At Home:
Meats, Poultry, Fish, And Eggs:
Beef
Poultry
Pork
Other Meat
Fish And Seafood
Eggs
Fruits And Vegetables:
Fresh Vegetables
Fresh Fruits
Processed Fruits
Processed Vegetables
Cereals And Bakery Products:
Bakery Products
Cereals And Cereal Products
Dairy Products:
Other Dairy Products
Fresh Milk And Cream
Other Food At Home:
Miscellaneous Foods
Nonalcoholic Beverages
Sugar And Other Sweets
Fats And Oils
Food For Out-Of-Town Trips

Food Away From Home


Alcoholic Beverages

Less Than
$5,000

$5,000 $9,999

$10,000 $14,999

$15,000 $19,999

$20,000 $29,999

$30,000 $39,999

$40,000 $49,999

$50,000 $69,999

$70,000
And Over

797
$26,059
$4,144
$2,146

969
1,507
1,605
3,025
2,808
2,546
$19,310 $22,845 $26,424 $33,401 $39,982 $45,944
$3,127 $3,379 $4,005 $4,603 $5,521 $6,267
$2,171 $2,308 $2,753 $2,862 $3,304 $3,611

4,282
$55,945
$7,064
$4,091

9,260
$91,151
$10,072
$5,220

$500
$68
$100
$68
$60
$70
$41
$460
$202
$161
$47
$51
$296
$198
$98
$253
$162
$91
$637
$334
$178
$50
$38
$36

$475
$95
$106
$95
$53
$66
$30
$438
$143
$132
$90
$72
$286
$185
$101
$228
$138
$90
$745
$367
$217
$74
$74
$12

$472
$95
$89
$95
$57
$62
$35
$446
$136
$157
$85
$68
$302
$186
$116
$273
$168
$105
$814
$420
$227
$84
$70
$13

$568
$117
$87
$117
$73
$106
$36
$536
$186
$197
$85
$68
$357
$240
$117
$303
$175
$128
$989
$541
$252
$104
$76
$16

$644
$115
$119
$115
$72
$116
$46
$541
$178
$196
$92
$75
$368
$237
$131
$313
$187
$126
$996
$518
$280
$92
$79
$28

$728
$116
$146
$116
$74
$118
$46
$619
$189
$210
$122
$97
$399
$277
$122
$383
$237
$147
$1,176
$619
$312
$119
$85
$41

$829
$147
$127
$147
$92
$160
$54
$713
$241
$254
$117
$101
$449
$307
$142
$399
$251
$148
$1,220
$659
$313
$112
$91
$45

$917
$160
$155
$160
$113
$135
$59
$729
$253
$241
$129
$106
$498
$344
$155
$436
$276
$159
$1,510
$812
$378
$149
$112
$60

$1,141
$203
$202
$203
$138
$213
$57
$945
$305
$333
$171
$136
$651
$439
$212
$556
$356
$199
$1,927
$1,014
$500
$180
$119
$113

$1,997
$176

$956
$316

$1,071
$284

$1,252
$315

$1,741
$317

$2,217
$422

$2,657
$526

$2,973
$577

$4,852
$869

315

Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

REGION AND INCOME: Average Annual Household Food Expenditures


Food At Home Vs. Food Away From Home
Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

West
$5,220
$4,852

$4,091
$3,611
$3,304

$2,753

$2,657

$2,308

$2,217

$2,171

$2,146

316

$2,973

$2,862

$1,997
$1,741
$1,252
$956

Less Than
$5,000

$5,000 - $9,999

$1,071

$10,000 $14,999

$15,000 $19,999
Food At Home

$20,000 $29,999

$30,000 $39,999

Food Away From Home

$40,000 $49,999

$50,000 $69,999

$70,000 & Up

REGION AND INCOME: Average Annual Household At-Home Food Expenditures


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

West

$5,000-$9,000

$10,000-$14,999

$15,000-$19,999

$20,000-$29,999

$30,000-$39,999

$40,000-$49,999

$50,000-$69,999

$296

$637
$475
$438

$286

$745
$472
$446

$302

$814
$568
$536

$357

$989
$541

$368

$644

317

Less than $5,000

$500
$460

$996
$728

$619

$399

$1,176

$449

$713

$1,220
$729

$498

$70,000 And Over

$829

$1,570

$657

Meats, Poultry, Fish, & Eggs

$917

Fruits and Vegetables

$945

$1,141
$1,927

Cereals and Bakery Products

Dairy Products

Other Food At Home

319

METRO AREAS

METRO AREAS: Average Annual Household Food Expenditures - Northeast

Item
Number of Consumer Units (000)
Pre-Tax Income
Averages:
Age Of Householder
Average Number Of Persons
Average Annual Expenditures:
Food:
Food At Home:
Meats, Poultry, Fish, And Eggs
Fruits And Vegetables
Cereals And Bakery Products
Dairy Products
Other Food At Home

Food Away From Home


Alcoholic Beverages

Average
Northeast
22,570
$67,060

New York
8,716
$76,022

Philadelphia
2,722
$65,637

Boston
2,890
$80,966

50.1
2.4
$50,703
$6,320
$3,529
$825
$641
$486
$390
$1,187
$2,791

50.7
2.5
$56,683
$7,023
$3,822
$955
$743
$528
$396
$1,199
$3,202

48.4
2.4
$48,649
$5,600
$3,028
$734
$559
$408
$343
$984
$2,571

48.1
2.3
$55,189
$6,700
$3,893
$887
$657
$553
$423
$1,374
$2,807

$513

$533

$451

$565

320

Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

METRO AREAS: Average Annual Household Food Expenditures


Food At-Home vs. Food Away-From-Home by Region
Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Northeast

$3,202
45.57%

$2,807
41.90%

$2,791
44.16%

321

$2,571
45.92%

$3,529
55.83%

Northeast
Northeast
Average

$3,822
54.41%

New York
Food At Home:

Food Away From Home

$3,028
54.08%

Philadelphia

$3,893
58.10%

Boston

METRO AREAS: Average Annual Household Food Expenditures - Midwest


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Meats, Poultry, Fish, And Eggs


Fruits And Vegetables
Cereals And Bakery Products
Dairy Products
Other Food At Home

Food Away From Home


Alcoholic Beverages

Chicago
3,224
$75,463

Detroit
2,251
$58,414

Minneapolis
- St. Paul
1,467
$76,772

48.6
2.4
$46,812
$5,778
$3,256
$715
$538
$438
$370
$1,195
$2,522

49.6
2.6
$57,304
$7,202
$4,046
$932
$713
$537
$406
$1,457
$3,156

49.3
2.4
$48,348
$6,550
$3,886
$871
$635
$579
$420
$1,381
$2,663

48.1
2.3
$60,059
$6,848
$3,845
$703
$731
$517
$475
$1,419
$3,003

$512

$801

$495

$928

Cleveland
1,155
$62,104
53.0
2.5
$47,890
$5,514
$3,331
$934
$531
$422
$320
$1,125
$2,183

$401

322

Item
Number of Consumer Units (000)
Pre-Tax Income
Averages:
Age Of Householder
Average Number Of Persons
Average Annual Expenditures:
Food:
Food At Home:

Average
Midwest
27,334
$58,688

METRO AREAS: Average Annual Household Food Expenditures


Food At-Home vs. Food Away-From-Home
Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Midwest

$3,171
45.95%

$3,095
48.42%

$2,787
42.14%

$2,513
43.64%

323

$2,047
40.59%

$3,246
56.36%

Midwest
Midwest
Average

$3,730
54.05%

$3,827
57.86%

Chicago

Detroit
Food At Home:

$3,297
51.58%

Minneapolis St. Paul

Food Away From Home

- St. Paul

$2,996
59.41%

Cleveland

METRO AREAS: Average Annual Household Food Expenditures - South


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Item
Number of Consumer Units (000)
Pre-Tax Income
Averages:
Age Of Householder
Average Number Of Persons
Average Annual Expenditures:
Food:
Food At Home:
Meats, Poultry, Fish, And Eggs
Fruits And Vegetables
Cereals And Bakery Products
Dairy Products
Other Food At Home
Food Away From Home

Alcoholic Beverages

Average
South
42,804
$57,216

Washington
D.C.
2,175
$100,486

Miami
1,646
$54,990

Fort
Worth
2,171
$67,145

Baltimore
1,006
$78,930

Atlanta
2,204
$67,859

Houston
1,837
$71,124

48.8
2.5
$45,225
$5,715
$3,223
$767
$532
$423
$347
$1,154
$2,492

45.8
2.6
$65,894
$7,533
$3,747
$864
$780
$451
$407
$1,244
$3,786

48.9
2.5
$53,244
$6,222
$3,386
$820
$573
$438
$338
$1,217
$2,836

45.7
2.5
$46,705
$5,646
$2,871
$662
$518
$368
$281
$1,042
$2,775

48.8
2.4
$46,201
$5,728
$3,830
$949
$854
$476
$443
$1,107
$1,898

45.5
2.8
$54,334
$6,160
$3,498
$774
$605
$434
$381
$1,304
$2,662

45.3
2.7
$55,381
$6,547
$3,447
$802
$607
$419
$355
$1,264
$3,099

$374

$650

$479

$345

$276

$381

$603

324

Dallas-

METRO AREAS: Average Annual Household Food Expenditures


Food At-Home vs Food Away-From-Home by Region
Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

South

$3,092
48.65%
$2,883
58.89%

$3,073
55.16%

$2,498
44.84%

South
Average
South

$3,593
63.74%

$3,573
54.66%

$3,231
53.29%

$3,264
51.35%

Washington
D.C.
D.C.

$2,038
41.41%

Baltimore

325

$2,506
47.38%

$2,044
36.26%
$2,783
52.62%

Atlanta
Food At Home:

Miami

Food Away From Home

$2,964
45.34%

Dallas-Fort
Worth
Worth

$2,832
46.71%

Houston

METRO AREAS: Average Annual Household Food Expenditures - West

Item
Number of Consumer Units (000)
Pre-Tax Income
Averages:
Age Of Householder
Average Number Of Persons
Average Annual Expenditures:
Food:
Food At Home:
Meats, Poultry, Fish, And Eggs
Fruits And Vegetables
Cereals And Bakery Products
Dairy Products
Other Food At Home

Food Away From Home


Alcoholic Beverages

Average
West
26,800
$67,953

Los
Angeles
5,049
$76,384

San
Francisco
2,956
$86,112

San
Diego
1,009
$73,604

Seattle
1,954
$67,923

Phoenix
1,556
$68,070

47.7
2.6
$57,124
$6,981
$3,918
$864
$725
$489
$425
$1,414
$3,063

47.7
2.8
$60,932
$7,785
$4,257
$1,026
$879
$494
$416
$1,442
$3,528

48.9
2.4
$69,559
$8,369
$4,375
$1,009
$888
$558
$466
$1,454
$3,994

46.9
2.6
$54,648
$5,312
$2,819
$630
$510
$332
$286
$1,061
$2,493

48.5
2.3
$59,384
$6,486
$3,615
$761
$619
$447
$390
$1,398
$2,871

45.0
2.7
$57,657
$7,156
$4,045
$873
$676
$508
$445
$1,542
$3,112

$576

$543

$888

$520

$570

$645

326

Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

METRO AREAS: Average Annual Household Food Expenditures


Food At-Home vs. Food Away-From-Home
Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

West

$3,528
45.32%

$3,994
47.72%
$3,112
43.48%

$3,063
43.88%

327

$2,871
44.26%
$2,493
46.93%

$3,918
56.12%

$4,257
58.15%

$4,375
52.28%
$2,819
53.07%

West
Average
West

Los Angeles
Angeles

San
Francisco
Francisco
Food At Home:

San
Diego
Diego
Food Away From Home

$3,615
55.74%

Seattle

$4,045
56.52%

Phoenix

METRO AREAS: Average Annual Food At-Home Expenditures


by Household in Selected Major Metropolitan Areas
Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey
Detroit
$3,886

Seattle
$3,615

Cleveland
$3,331

Minneapolis/
St. Paul $3,845

Chicago $4,046
Boston $3,893
San Francisco
$4,375

Philadelphia
$3,028

Los Angeles
$4,257

Phoenix
$4,045

Baltimore $3,386

Washington, D.C.
$3,055

San Diego
$2,819

Dallas/F.W.
$3,498

Houston
$3,447

Atlanta
$2,871

Miami
$3,830

328

New York City


$3,822

METRO AREAS: Average Annual Food Away-From-Home Expenditures


by Household in Selected Major Metropolitan Areas
Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Seattle
$2,871

Detroit
$2,663

Cleveland
$2,183

Minneapolis/
St. Paul
$3,003

Boston
$2807

San Francisco
$3,994

New York
City $3,202

Chicago
$3,156

Los Angeles $3,528


Phoenix
$3,112

Washington,
D.C.
$3,786

Baltimore
$2,836

Atlanta
$2,775

San Diego
$2,493
Dallas/F.W.
$2,662

Houston
$3,099

Miami $1,898

329

Philadelphia
$2571

URBAN OR RURAL HOUSING: Average Annual Household Food Expenditures, Distribution of Food Spending &
Food Spending As A Percent of Annual Expenditures
Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Distribution of Food Dollars

Food Spending As A Percent


of Annual Expenditures

Item

Urban

Rural

Urban

Rural

Urban

Rural

Number of consumer units (000)


Average Annual Expenditures

109,771
$50,391

10,401
$41,680

109,771

10,401

Food:
Food At Home:

$6,235
$3,500

$5,060
$3,091

100.00%
56.10%

100.00%
61.00%

$787
$216
$149
$147
$127
$106
$43
$612
$207
$196
$114
$96
$462
$317
$144
$388
$235
$153
$1,252
$659
$335
$124
$91
$43

$667
$221
$161
$90
$65
$92
$39
$473
$148
$135
$97
$93
$439
$314
$125
$385
$223
$162
$1,127
$552
$312
$126
$95
$41

22.50%
27.40%
18.90%
18.70%
16.10%
13.50%
5.50%
17.50%
33.80%
32.00%
18.60%
15.70%
13.20%
68.60%
31.00%
60.60%
60.50%
39.40%
35.80%
52.60%
26.60%
9.90%
7.30%
3.40%

21.60%
7.00%
7.10%
2.90%
2.10%
3.00%
1.30%
9.30%
31.30%
28.50%
20.50%
19.70%
8.70%
71.50%
28.50%
7.60%
57.90%
42.00%
22.30%
49.00%
27.70%
11.20%
8.40%
3.60%

$2,734
$474

$1,969
$274

78.10%
13.50%

38.90%
5.40%

109,771
$50,391
12.30%
6.9%
1.5%
0.4%
0.3%
0.2%
0.3%
0.2%
0.1%
1.2%
0.4%
0.4%
0.2%
0.2%
0.9%
0.6%
0.3%
0.8%
0.5%
0.3%
2.5%
1.3%
0.7%
0.2%
0.2%
0.1%
5.4%

10,401
$41,680
12.10%
7.4%
1.6%
0.5%
0.4%
0.2%
0.2%
0.2%
0.1%
1.1%
0.4%
0.3%
0.2%
0.2%
1.1%
0.8%
0.3%
0.9%
50.0%
0.4%
2.7%
1.3%
0.7%
0.3%
0.2%
0.1%
4.7%

0.9%

0.7%

Meats, Poultry, Fish, And Eggs:


Beef
Pork
Poultry
Fish And Seafood
Other Meat
Eggs
Fruits And Vegetables:
Fresh Fruits
Fresh Vegetables
Processed Fruits
Processed Vegetables
Cereals And Bakery Products:
Bakery Products
Cereals And Cereal Products
Dairy Products:
Other Dairy Products
Fresh Milk And Cream
Other Food At Home:
Miscellaneous Foods
Nonalcoholic Beverages
Sugar And Other Sweets
Fats And Oils
Food For Out-Of-Town Trips

Food Away From Home


Alcoholic Beverages

330

Spending in Dollars

URBAN OR RURAL HOUSING: Distribution of Annual At-Home Food Spending


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Rural

Other Food At
Home:
35.8%

Meats, Poultry,
Fish, And
Eggs:
22.5%

Other Food At
Home:
36.5%

Meats, Poultry,
Fish, And
Eggs:
21.6%

Fruits And
Vegetables:
15.3%

Fruits And
Vegetables:
17.5%
Dairy
Products:
11.1%

Cereals And
Bakery
Products:
13.2%
Total At-Home Food
Spending: $3,500

Dairy Products:
12.5%

Cereals And
Bakery
Products:
14.2%

Total At-Home Food


Spending: $3,091

331

Urban

333

CAREER OF HEAD OF HOUSEHOLD

Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey
Technical
SelfTotal Wage
Sales &
Construction
Operators
Employed
& Salary
Managers &
Clerical
Service
Workers &
Fabricators
Workers
Earners
Professionals
Workers
Workers
Mechanics
& Laborers

Item
Number of Consumer Units (000)
Average Annual Expenditures

Food:
Food At Home:
Meats, Poultry, Fish, And Eggs:
Beef
Pork
Fish And Seafood
Poultry
Other Meat
Eggs
Fruits And Vegetables:
Fresh Vegetables
Fresh Fruits
Processed Fruits
Processed Vegetables
Cereals And Bakery Products:
Bakery Products
Cereals And Cereal Products
Dairy Products:
Other Dairy Products
Fresh Milk And Cream
Other Food At Home:
Miscellaneous Foods
Nonalcoholic Beverages
Sugar And Other Sweets
Fats And Oils
Food For Out-Of-Town Trips

Food Away From Home


Alcoholic Beverages

Retired

Other

5,471
$63,455
$7,236
$4,039
$881
$230
$176
$143
$166
$113
$52
$728
$228
$227
$154
$119
$502
$344
$158
$457
$276
$181
$1,472
$783
$395
$133
$104
$56
$3,197

79,622
$53,873
$6,614
$3,582
$796
$221
$149
$129
$146
$109
$43
$612
$194
$206
$113
$98
$477
$328
$149
$401
$244
$158
$1,295
$685
$347
$129
$91
$44
$3,033

30,543
$69,510
$7,988
$4,090
$833
$215
$148
$151
$158
$115
$44
$753
$239
$266
$137
$112
$548
$375
$173
$463
$292
$170
$1,494
$804
$384
$143
$99
$64
$3,898

21,668
$48,509
$6,222
$3,394
$790
$231
$149
$118
$144
$108
$41
$531
$168
$172
$103
$87
$450
$319
$131
$377
$223
$153
$1,246
$657
$334
$128
$89
$37
$2,827

13,178
$40,246
$5,321
$3,110
$732
$193
$137
$121
$132
$108
$40
$531
$171
$173
$97
$90
$418
$284
$134
$350
$208
$142
$1,079
$549
$301
$118
$82
$30
$2,212

4,663
$44,100
$5,610
$3,382
$846
$263
$164
$122
$143
$108
$45
$529
$173
$155
$103
$98
$435
$299
$136
$373
$218
$155
$1,199
$630
$349
$111
$87
$22
$2,227

9,570
$39,377
$5,276
$3,082
$753
$231
$159
$99
$130
$91
$44
$486
$148
$158
$89
$91
$403
$271
$133
$342
$195
$147
$1,099
$568
$314
$107
$85
$25
$2,194

20,658
$35,424
$4,420
$2,813
$629
$171
$138
$100
$101
$79
$39
$537
$170
$187
$101
$80
$382
$272
$110
$315
$192
$123
$950
$470
$251
$105
$88
$37
$1,607

14,419
$41,661
$5,643
$3,592
$853
$254
$161
$107
$172
$115
$44
$584
$187
$192
$109
$96
$465
$311
$154
$394
$226
$169
$1,295
$677
$358
$128
$92
$42
$2,052

$508

$525

$653

$503

$351

$602

$359

$303

$294

334

CAREER OF HEAD OF HOUSEHOLD: Average Annual Food Expenditures

CAREER OF HEAD OF HOUSEHOLD:


Food At-Home vs. Food Away-From-Home Spending
Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

63.64%
55.82%

63.65%

54.16%
45.86%
36.36%

36.36%

Self-Employed Workers

Wage & Salary Earners


At-Home

Retired
Away-From-Home

Other

335

44.18%

CAREER OF HEAD OF HOUSEHOLD: Food Spending As A


Percent of Annual Expenditures
Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

11.4%
12.3%

336

13.5%

12.5%

$7,236
$6,614
$5,643
$4,420

Self-Employed Workers

Wage & Salary Earners

Retired

Other

CAREER OF HEAD OF HOUSEHOLD: Wage & Salary Workers


Food At-Home vs. Food Away-From-Home Spending
Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

60.29%

58.45%

58.42%

54.55%
51.20%

48.80%
41.60%

Managers &
Professionals

Sales & Clerical


Workers

Service Workers

At-Home

39.70%

Construction Workers
& Mechanics

Away-From-Home

41.58%

Operators, Fabricators
& Laborers

337

45.44%

CAREER OF HEAD OF HOUSEHOLD: Wage & Salary Workers


Food Spending As A Percent of Annual Expenditures
Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

11.5%

13.4%

13.2%

$7,988
$6,222
$5,321

Managers & Professionals Sales & Clerical Workers

Service Workers

$5,610

$5,276

Construction Workers & Operators, Fabricators &


Mechanics
Laborers

338

12.7%

12.8%

CAREER OF HEAD OF HOUSEHOLD: Distribution of Food Expenditures

Item
Number of Consumer Units (000)
Average Annual Expenditures

Food:
Food At Home:
Meats, Poultry, Fish, And Eggs:
Beef
Pork
Other Meat
Poultry
Fish And Seafood
Eggs
Fruits And Vegetables:
Fresh Fruits
Fresh Vegetables
Processed Fruits
Processed Vegetables
Cereals And Bakery Products:
Cereals And Cereal Products
Bakery Products
Dairy Products:
Fresh Milk And Cream
Other Dairy Products
Other Food At Home:
Sugar And Other Sweets
Fats And Oils
Miscellaneous Foods
Nonalcoholic Beverages
Food For Out-Of-Town Trips

Food Away From Home

5,471
$63,455
100.00%
55.82%
21.81%
26.11%
19.98%
16.23%
18.84%
12.83%
5.90%
18.02%
31.32%
31.18%
21.15%
16.35%
12.43%
68.53%
31.47%
11.31%
60.39%
39.61%
36.44%
53.19%
26.83%
9.04%
7.07%
3.80%
44.18%

79,622
$53,873
100.00%
54.16%
22.22%
27.76%
18.72%
16.21%
18.34%
13.69%
5.40%
17.09%
31.70%
33.66%
18.46%
16.01%
13.32%
68.76%
31.24%
11.19%
60.85%
39.40%
36.15%
52.90%
26.80%
9.96%
7.03%
3.40%
45.86%

30,543
$69,510
100.00%
51.20%
20.37%
25.81%
17.77%
18.13%
18.97%
13.81%
5.28%
18.41%
31.74%
35.33%
18.19%
14.87%
13.40%
68.43%
31.57%
11.32%
63.07%
36.72%
36.53%
53.82%
25.70%
9.57%
6.63%
4.28%
48.80%

21,688
$48,509
100.00%
54.55%
23.28%
29.24%
18.86%
14.94%
18.23%
13.67%
5.19%
15.65%
31.64%
32.39%
19.40%
16.38%
13.26%
70.89%
29.11%
11.11%
59.15%
40.58%
36.71%
52.73%
26.81%
10.27%
7.14%
2.97%
45.44%

13,178
$40,246
100.00%
58.45%
23.54%
26.37%
18.72%
16.53%
18.03%
14.75%
5.46%
17.07%
32.20%
32.58%
18.27%
16.95%
13.44%
67.94%
32.06%
11.25%
59.43%
40.57%
34.69%
50.88%
27.90%
10.94%
7.60%
2.78%
41.57%

4,663
$44,100
100.00%
60.29%
25.01%
31.09%
19.39%
14.42%
16.90%
12.77%
5.32%
15.64%
32.70%
29.30%
19.47%
18.53%
12.86%
68.74%
31.26%
11.03%
58.45%
41.55%
35.45%
52.54%
29.11%
9.26%
7.26%
1.83%
39.70%

Operators
Fabricators
& Laborers

Retired

Other

9,570
$39,377
100.00%
58.42%
24.43%
30.68%
21.12%
13.15%
17.26%
12.08%
5.84%
15.77%
30.45%
32.51%
18.31%
18.72%
13.08%
67.25%
33.00%
11.10%
57.02%
42.98%
35.66%
51.68%
28.57%
9.74%
7.73%
2.27%
41.58%

20,658
$35,424
100.00%
63.64%
22.36%
27.19%
21.94%
15.90%
16.06%
12.56%
6.20%
19.09%
31.66%
34.82%
18.81%
14.90%
13.58%
71.20%
28.80%
11.20%
60.95%
39.05%
33.77%
49.47%
26.42%
11.05%
9.26%
3.89%
36.36%

14,419
$41,661
100.00%
63.65%
23.75%
29.78%
18.87%
12.54%
20.16%
13.48%
5.16%
16.26%
32.02%
32.88%
18.66%
16.44%
12.95%
66.88%
33.12%
10.97%
57.36%
42.89%
36.05%
52.28%
27.64%
9.88%
7.10%
3.24%
36.36%

339

Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey
Technical
SelfTotal Wage
Sales &
Construction
Employed
& Salary
Managers &
Clerical
Service
Workers &
Workers
Earners
Professionals
Workers
Workers
Mechanics

CAREER OF HEAD OF HOUSEHOLD: Distribution of


At-Home Food Spending

Self-Employed
Workers

Wage & Salary


Earners

Managers &
Professionals

Meats, Poultry, Fish & Eggs

Fruits & Vegetables

$1,295

Dairy Products

340

$584

Retired

Other Food At-Home

$465
$394

$382
$315

Operators,
Fabricators &
Laborers

$853

$950

Construction
Workers &
Mechanics

Cereals & Bakery Products

$629
$537

$486
$403
$342

$529
$435
$373

$418
$350

Sales & Clerical Service Workers


Workers

$1,099

$753

$846
$732
$531

$531
$450
$377

$548
$463

$790

$833
$753
$477
$401

$502
$457

$612

$728

$796

$881

$1,079

$1,199

$1,246

$1,494

$1,295

$1,472

Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Other

CAREER OF HEAD OF HOUSEHOLD:


Distribution of At-Home of Food Spending - Meats, Poultry, Fish & Eggs

Self-Employed
Workers

Managers &
Professionals

$254

Construction
Workers &
Mechanics

Pork

Fish & Seafood

Poultry

Other Meat

Eggs

$172

$161

$171

$39

341

$44

$79

$115

$100
$101

$107

$138

Operators,
Fabricators &
Laborers

Wage & Salary Earners

Beef

$91
$44

$45

$99

$108

$122
$40

Sales & Clerical Service Workers


Workers

$130

$143

$159

$164
$137
$121
$132
$108
$41

$108

$118
$44

$115

Wage & Salary


Earners

$144

$149

$148
$151
$158
$43

$52

$113

$143

$149
$129
$146
$109

$166

$176

$193

$231

$231

$215

$221

$230

$263

Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Retired

Other

CAREER OF HEAD OF HOUSEHOLD:


Distribution of At-Home Food Spending - Fruits & Vegetables

Sales & Clerical Service Workers


Workers

Construction
Workers &
Mechanics

Fresh Fruits

Processed Fruits

Processed Vegetables

$80

$101

$109
$96

342

Operators,
Fabricators &
Laborers

Wage & Salary Earners

Fresh Vegetables

$187
$192

$170
$187
$89
$91

$103
$98

$148
$158

$173
$155
$97
$90

Managers &
Professionals

$87

Wage & Salary


Earners

$103

$137
$112

Self-Employed
Workers

$113
$98

$119

$154

$168
$172

$171
$173

$194
$206

$228
$227

$239

$266

Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Retired

Other

CAREER OF HEAD OF HOUSEHOLD:


Distribution of At-Home Food Spending - Cereals & Bakery Products

Sales & Clerical Service Workers


Workers

Bakery Products

Construction
Workers &
Mechanics

Cereals & Cereal Products

Operators,
Fabricators &
Laborers

$154
$110

$133

$136

$134

$131
Managers &
Professionals

Retired

Other

343

$272

$271

$284

$299

$319

Wage & Salary


Earners

$173

$149

$158
Self-Employed
Workers

$311

$375

$328

$344

Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

CAREER OF HEAD OF HOUSEHOLD:


Distribution of At-Home Food Spending - Other Food At-Home

Self-Employed
Workers

Wage & Salary


Earners

Managers &
Professionals

Miscellaneous Foods

Sales & Clerical


Workers

Non-Alcoholic Beverages

Service Workers

$677

Construction
Workers &
Mechanics

Sugar & Other Sweets

Fats & Oils

344

$358
Retired

Food For Out-of-Town Trips

$128
$92
$42

$251

Operators,
Fabricators &
Laborers

$105
$88
$37

$22

$25

$107
$85

$111
$87

$314

$349
$118
$82
$30

$301
$128
$89
$37

$143
$99
$64

$334

$384
$129
$91
$44

$133
$104
$56

$347

$395

$470

$549

$568

$630

$657

$685

$783

$804

Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Other

Item
Number of Consumer Units (000)

Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey
Technical
SelfTotal Wage
Sales &
Construction
Employed
& Salary
Managers &
Clerical
Service
Workers &
Workers
Earners
Professionals
Workers
Workers
Mechanics

Average Annual Expenditures

Food:
Food At Home:
Meats, Poultry, Fish, And Eggs:
Beef
Pork
Fish And Seafood
Other Meat
Poultry
Eggs
Fruits And Vegetables:
Fresh Fruits
Fresh Vegetables
Processed Fruits
Processed Vegetables
Cereals And Bakery Products:
Bakery Products
Cereals And Cereal Products
Dairy Products:
Other Dairy Products
Fresh Milk And Cream
Other Food At Home:
Miscellaneous Foods
Nonalcoholic Beverages
Sugar And Other Sweets
Fats And Oils
Food For Out-Of-Town Trips

Food Away From Home


Alcoholic Beverages

Operators
Fabricators &
Laborers

Retired

Other

5,471
$63,455

79,622
$53,873

30,543
$69,510

21,668
$48,509

13,178
$40,246

4,663
$44,100

9,570
$39,377

20,658
$35,424

14,419
$41,661

11.40%

12.30%

11.50%

12.80%

13.20%

12.70%

13.40%

12.50%

13.50%

6.40%
1.40%
0.40%
0.30%
0.20%
0.20%
0.30%
0.10%
0.10%
0.40%
0.40%
0.20%
0.20%
0.80%
0.50%
0.20%
0.70%
0.40%
0.30%
2.30%
1.20%
0.60%
0.20%
0.20%
0.10%
5.00%

6.60%
1.50%
0.00
0.30%
0.20%
0.20%
0.30%
0.10%
0.10%
0.40%
0.40%
0.20%
0.20%
0.90%
0.60%
0.30%
0.70%
0.50%
0.30%
2.40%
1.30%
0.60%
0.20%
0.20%
0.10%
5.60%

5.90%
1.20%
0.00
0.20%
0.20%
0.20%
0.20%
0.10%
0.10%
0.40%
0.30%
0.20%
0.20%
0.80%
0.50%
0.20%
0.70%
0.40%
0.20%
2.10%
1.20%
0.60%
0.20%
0.10%
0.10%
5.60%

7.00%
1.60%
0.01
0.30%
0.20%
0.20%
0.30%
0.10%
0.10%
0.40%
0.30%
0.20%
0.20%
0.90%
0.70%
0.30%
0.80%
0.50%
0.30%
2.60%
1.40%
0.70%
0.30%
0.20%
0.10%
5.80%

7.70%
1.80%
0.01
0.30%
0.30%
0.30%
0.30%
0.10%
1.30%
0.40%
0.40%
0.20%
0.20%
1.00%
0.70%
0.30%
0.90%
0.50%
0.40%
2.70%
1.40%
0.70%
0.30%
0.20%
0.10%
5.50%

7.70%
1.90%
0.01
0.40%
0.30%
0.20%
0.30%
0.10%
1.20%
0.40%
0.40%
0.20%
0.20%
1.00%
0.70%
0.30%
0.80%
0.50%
0.40%
2.70%
1.40%
0.80%
0.30%
0.20%
0.10%
5.10%

7.80%
1.90%
0.01
0.40%
0.30%
0.20%
0.30%
0.10%
1.20%
0.40%
0.40%
0.20%
0.20%
1.00%
0.70%
0.30%
0.90%
0.50%
0.40%
2.80%
1.40%
0.80%
0.30%
0.20%
0.10%
5.60%

7.90%
1.80%
0.01
0.40%
0.30%
0.20%
0.30%
0.10%
1.50%
0.50%
0.50%
0.30%
0.20%
1.10%
0.80%
0.30%
0.90%
0.50%
0.30%
2.70%
1.30%
0.70%
0.30%
0.20%
0.10%
4.50%

8.60%
2.00%
0.01
0.40%
0.30%
0.30%
0.40%
0.10%
1.40%
0.50%
0.50%
0.30%
0.20%
1.10%
0.70%
0.40%
0.90%
0.50%
0.40%
3.10%
1.60%
0.90%
0.30%
0.20%
0.10%
4.90%

0.80%

1.00%

0.90%

1.00%

0.90%

1.40%

0.90%

0.90%

0.70%

345

CAREER OF HEAD OF HOUSEHOLD: Food Spending As a Percent of Annual Expenditures

347

COMPOSITION OF HOUSEHOLD

COMPOSITION OF HOUSEHOLD: Average Annual Food Expenditures


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Couple With Children

Item
Number of consumer units (000)
Average Annual Expenditures
Food:
Food At Home:
Meats, Poultry, Fish, And Eggs:
Beef
Pork
Poultry
Fish And Seafood
Other Meat
Eggs
Fruits And Vegetables:
Fresh Fruits
Fresh Vegetables
Processed Fruits
Processed Vegetables
Cereals And Bakery Products:
Bakery Products
Cereals And Cereal Products
Dairy Products:
Other Dairy Products
Fresh Milk And Cream
Other Food At Home:
Miscellaneous Foods
Nonalcoholic Beverages
Sugar And Other Sweets
Fats And Oils
Food For Out-Of-Town Trips
Food Away From Home

Alcoholic Beverages

Husband
& Wife
Totals
60,747
$64,104
$7,900
$4,460
$986
$277
$190
$182
$152
$131
$53
$780
$265
$253
$142
$120
$596
$414
$183
$511
$312
$199
$1,586
$827
$418
$160
$120
$62
$3,440

Couple
Only
25,923
$58,637
$6,690
$3,617
$790
$214
$162
$134
$135
$101
$44
$676
$233
$224
$118
$101
$472
$337
$134
$424
$274
$150
$1,255
$618
$329
$135
$106
$67
$3,073

$506

$559

Average
29,984
$69,101
$8,876
$5,080
$1,113
$319
$208
$213
$159
$154
$60
$848
$287
$269
$159
$133
$693
$472
$221
$581
$342
$239
$1,845
$995
$480
$181
$128
$61
$3,796

Oldest
under 6
5,865
$62,403
$7,137
$4,243
$784
$254
$151
$138
$93
$103
$45
$735
$264
$222
$141
$107
$516
$353
$163
$514
$285
$229
$1,694
$1,069
$367
$121
$92
$45
$2,894

Oldest
6 To 17
15,265
$70,766
$9,151
$5,115
$1,122
$325
$209
$213
$159
$153
$63
$856
$290
$271
$157
$138
$730
$488
$242
$605
$351
$254
$1,802
$945
$465
$192
$127
$73
$4,036

Oldest
18 & up
8,854
$70,822
$9,623
$5,626
$1,337
$353
$249
$269
$207
$193
$66
$914
$297
$299
$177
$142
$750
$529
$221
$582
$366
$216
$2,043
$1,041
$595
$201
$155
$51
$3,997

Other
Couples
4,841
$63,339
$9,138
$5,737
$1,394
$404
$245
$286
$218
$175
$67
$998
$329
$333
$180
$156
$752
$515
$238
$602
$360
$242
$1,990
$1,040
$573
$184
$154
$40
$3,401

Single Parent
with at least
1 Child
under 18
7,139
$38,239
$5,614
$3,295
$793
$191
$168
$146
$132
$113
$42
$492
$148
$131
$110
$104
$456
$307
$149
$356
$203
$153
$1,198
$663
$317
$115
$82
$21
$2,319

$470

$513

$405

$566

$421

$212

Single
Person
& Others
52,286
$34,360
$4,142
$2,328
$532
$148
$101
$94
$85
$72
$30
$403
$134
$125
$78
$66
$301
$205
$95
$247
$146
$101
$845
$442
$236
$84
$59
$24
$1,814

$428

348

Husband & Wife

COMPOSITION OF HOUSEHOLD: Average Annual At-Home Food Expenditures


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

$790
$676
Couple Only

$472
$424
$1,255
$784
$735

Couple - Oldest Child Under 6

$516
$514
$1,694
$1,122
$856
$730

Couple - Oldest Child 6 - 17


$605

$1,802
$1,337
349

$914
$750

Couple - Oldest Child 18 & Up


$582

$2,043
$1,394
$998
$752

Other Couples
$602

$1,990
$793
Single Parent with at Least 1
Child Under 18

Fruits and
Vegetables

$492
$456
$356
$1,198
$532

Single Person & Others

Meats, Poultry, Fish,


and Eggs

Cereals and Bakery


Products
Dairy products

$403
$301
$247
$845

Other Food At Home

COMPOSITION OF HOUSEHOLD: Distribution of Food Expenditures


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Couple With Children

Item
Number of consumer units (000)
Average Annual Expenditures
Food:
Food At Home:
Meats, Poultry, Fish, And Eggs:
Beef
Pork
Other Meat
Poultry
Fish And Seafood
Eggs
Fruits And Vegetables:
Fresh Fruits
Fresh Vegetables
Processed Fruits
Processed Vegetables
Cereals And Bakery Products:
Cereals And Cereal Products
Bakery Products
Dairy Products:
Fresh Milk And Cream
Other Dairy Products
Other Food At Home:
Sugar And Other Sweets
Fats And Oils
Miscellaneous Foods
Nonalcoholic Beverages
Food For Out-Of-Town Trips
Food Away From Home

Husband
& Wife
Totals
60,747
$64,104
100%
56.46%
22.11%
28.09%
19.27%
18.46%
15.42%
13.29%
5.38%
17.49%
33.97%
32.44%
18.21%
15.38%
13.36%
69.46%
30.70%
11.46%
61.06%
38.94%
35.56%
52.14%
26.36%
10.09%
7.57%
3.91%
43.54%

Couple
Only
25,923
$58,637
100%
54.07%
21.84%
27.09%
20.51%
16.96%
17.09%
12.78%
5.57%
18.69%
34.47%
33.14%
17.46%
14.94%
13.05%
71.40%
28.39%
11.72%
64.62%
35.38%
34.70%
49.24%
26.22%
10.76%
8.45%
5.34%
45.93%

Average
29,984
$69,101
100%
57.23%
21.91%
28.66%
18.69%
19.14%
14.29%
13.84%
5.39%
16.69%
33.84%
31.72%
18.75%
15.68%
13.64%
68.11%
31.89%
11.44%
58.86%
41.14%
36.32%
53.93%
26.02%
9.81%
6.94%
3.31%
42.77%

Oldest
under 6
5,865
$62,403
100%
59.45%
18.48%
32.40%
19.26%
17.60%
11.86%
13.14%
5.74%
17.32%
35.92%
30.20%
19.18%
14.56%
12.16%
68.41%
31.59%
12.11%
55.45%
44.55%
39.92%
63.11%
21.66%
7.14%
5.43%
2.66%
40.55%

Oldest
6 To 17
15,265
$70,766
100%
55.90%
21.94%
28.97%
18.63%
18.98%
14.17%
13.64%
5.61%
16.74%
33.88%
31.66%
18.34%
16.12%
14.27%
66.85%
33.15%
11.83%
58.02%
41.98%
35.23%
52.44%
25.80%
10.65%
7.05%
4.05%
44.10%

Oldest
18 & up
8,854
$70,822
100%
58.46%
23.76%
26.40%
18.62%
20.12%
15.48%
14.44%
4.94%
16.25%
32.49%
32.71%
19.37%
15.54%
13.33%
70.53%
29.47%
10.34%
62.89%
37.11%
36.31%
50.95%
29.12%
9.84%
7.59%
2.50%
41.54%

Other
Couple
4,841
$63,339
100%
62.78%
24.30%
28.98%
17.58%
20.52%
15.64%
12.55%
4.81%
17.40%
32.97%
33.37%
18.04%
15.63%
13.11%
68.48%
31.65%
10.49%
59.80%
40.20%
34.69%
52.26%
28.79%
9.25%
7.74%
2.01%
37.22%

Single Parent
with at least
1 Child
under 18
7,139
$38,239
100%
58.69%
24.07%
24.09%
21.19%
18.41%
16.65%
14.25%
5.30%
14.93%
30.08%
26.63%
22.36%
21.14%
13.84%
67.32%
32.68%
10.80%
57.02%
42.98%
36.36%
55.34%
26.46%
9.60%
6.84%
1.75%
41.31%

Single
Person
& Others
52,286
$34,360
100%
56.20%
22.85%
27.82%
18.98%
17.67%
15.98%
13.53%
5.64%
17.31%
33.25%
31.02%
19.35%
16.38%
12.93%
68.11%
31.56%
10.61%
59.11%
40.89%
36.30%
52.31%
27.93%
9.94%
6.98%
2.84%
43.80%

350

Husband & Wife

COMPOSITION OF HOUSEHOLD: Food Spending As A Percent of Annual Expenditures


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Couple With Children

Item
Number of consumer units (000)
Average Annual Expenditures
Food:
Food At Home:
Meats, Poultry, Fish, And Eggs:
Beef
Pork
Poultry
Fish And Seafood
Other Meat
Eggs
Fruits And Vegetables:
Fresh Fruits
Fresh Vegetables
Processed Fruits
Processed Vegetables
Cereals And Bakery Products:
Bakery Products
Cereals And Cereal Products
Dairy Products:
Other Dairy Products
Fresh Milk And Cream
Other Food At Home:
Miscellaneous Foods
Nonalcoholic Beverages
Sugar And Other Sweets
Fats And Oils
Food For Out-Of-Town Trips
Food Away From Home

Alcoholic Beverages
*Value less than .05%

Husband
& Wife
Totals
60,747
$64,104
12.30%
7.00%
1.50%
0.40%
0.30%
0.30%
0.20%
0.20%
0.10%
1.20%
0.40%
0.40%
0.20%
0.20%
0.90%
0.60
0.30
0.80
0.50
0.30
2.50%
1.30%
0.70%
0.20%
0.20%
0.10%
5.40%
0.80%

Couple
Only
25,923
$58,637
11.40%
6.20%
1.30%
0.40%
0.30%
0.20%
0.20%
0.20%
0.10%
1.20%
0.40%
0.40%
0.20%
0.20%
0.80%
0.60
0.20
0.70
0.50
0.30
2.10%
1.10%
0.60%
0.20%
0.20%
0.10%
5.20%

1.00%

Average
29,984
$69,101
12.80%
7.40%
1.60%
0.50%
0.30%
0.30%
0.20%
0.20%
0.10%
1.20%
0.40%
0.40%
0.20%
0.20%
1.00%
0.70
0.30
0.80
0.50
0.30
2.70%
1.40%
0.70%
0.30%
0.20%
0.10%
5.50%

Oldest
under 6
5,865
$62,403
11.40%
6.80%
1.30%
0.40%
0.20%
0.20%
0.10%
0.20%
0.10%
1.20%
0.40%
0.40%
0.20%
0.20%
0.80%
0.60
0.30
0.80
0.50
0.40
2.70%
1.70%
0.60%
0.20%
0.10%
0.10%
4.60%

Oldest
6 To 17
15,265
$70,766
12.90%
7.20%
1.60%
0.50%
0.30%
0.30%
0.20%
0.20%
0.10%
1.20%
0.40%
0.40%
0.20%
0.20%
1.00%
0.70
0.30
0.90
0.50
0.40
2.50%
1.30%
0.70%
0.30%
0.20%
0.10%
5.70%

Oldest
18 & up
8,854
$70,822
13.60%
7.90%
1.90%
0.50%
0.40%
0.40%
0.30%
0.30%
0.10%
1.30%
0.40%
0.40%
0.20%
0.20%
1.10%
0.70
0.30
0.80
0.50
0.30
2.90%
1.50%
0.80%
0.30%
0.20%
0.10%
5.60%

Other
Couple
4,841
$63,339
14.40%
9.10%
2.20%
0.60%
0.40%
0.50%
0.30%
0.30%
0.10%
1.60%
0.50%
0.50%
0.30%
0.20%
1.20%
0.80
0.40
1.00%
0.60
0.40
3.10%
1.60%
0.90%
0.30%
0.20%
0.10%
5.40%

Single Parent
with at least
1 Child
under 18
7,139
$38,239
14.70%
8.60%
2.10%
0.50%
0.40%
0.40%
0.30%
0.30%
0.10%
1.30%
0.40%
0.30%
0.30%
0.30%
1.20%
0.80
0.40
0.90
0.50
0.40
3.10%
1.70%
0.80%
0.30%
0.20%
0.10%
6.10%

0.70%

0.80%

0.60%

0.80%

0.70%

0.60%

Single
Person
& Others
52,286
$34,360
12.10%
6.80%
1.50%
0.40%
0.30%
0.30%
0.20%
0.20%
0.10%
1.20%
0.40%
0.40%
0.20%
0.20%
0.90%
0.60
0.30
0.70
0.40
0.30
2.50%
1.30%
0.70%
0.20%
0.20%
0.10%
5.30%

1.20%

351

Husband & Wife

353

EDUCATION OF HOUSEHOLD

EDUCATION OF HEAD OF HOUSEHOLD: Average Annual Food Expenditures


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Meats, Poultry, Fish, And Eggs:


Beef
Pork
Poultry
Other Meat
Fish And Seafood
Eggs
Fruits And Vegetables:
Fresh Fruits
Fresh Vegetables
Processed Fruits
Processed Vegetables
Cereals And Bakery Products:
Bakery Products
Cereals And Cereal Products
Dairy Products:
Other Dairy Products
Fresh Milk And Cream
Other Food At Home:
Miscellaneous Foods
Nonalcoholic Beverages
Sugar And Other Sweets
Fats And Oils
Food For Out-Of-Town Trips

Food Away From Home


Alcoholic Beverages

Not a 4-yr. College Graduate


< High
H.S.
H.S. & some Associate
School Graduate
College
Degree
18,227
30,313
26,169
10,680
$30,201 $39,164
$45,876
$52,721
$4,491
$5,231
$5,729
$6,524
$3,027
$3,196
$3,173
$3,669

4-Year College Graduate


College Grad
Total

34,783
$70,605
$7,878
$4,055

Bachelor's

Higher
Degrees

22,523
12,259
$65,706
$79,532
$7,393
$8,734
$3,816
$4,471

$762
$217
$155
$138
$102
$107
$42
$522
$168
$165
$100
$91
$427
$294
$133
$353
$204
$149
$1,148
$596
$321
$114
$87
$30

$772
$224
$162
$144
$90
$107
$45
$515
$168
$170
$92
$85
$396
$261
$135
$311
$165
$146
$1,033
$530
$308
$99
$81
$15

$779
$226
$168
$135
$108
$101
$42
$504
$158
$158
$98
$89
$427
$299
$128
$348
$201
$147
$1,138
$584
$327
$114
$85
$28

$714
$206
$135
$127
$98
$107
$42
$520
$168
$163
$97
$92
$428
$299
$129
$367
$217
$150
$1,144
$589
$313
$113
$90
$38

$813
$206
$158
$170
$115
$125
$40
$597
$194
$181
$123
$100
$477
$321
$157
$403
$246
$157
$1,379
$757
$343
$137
$97
$45

$812
$215
$136
$150
$109
$157
$44
$781
$282
$250
$142
$107
$535
$370
$165
$467
$303
$164
$1,460
$774
$362
$150
$101
$74

$782
$213
$134
$147
$105
$139
$43
$697
$247
$221
$130
$98
$512
$359
$153
$442
$283
$159
$1,384
$737
$345
$140
$97
$65

$864
$218
$141
$155
$117
$188
$45
$927
$342
$300
$162
$122
$576
$390
$186
$512
$338
$174
$1,593
$838
$391
$167
$107
$90

$2,181

$1,464

$2,035

$2,555

$2,855

$3,823

$3,577

$4,262

$341

$174

$329

$421

$448

$729

$743

$706

354

Item
Number of consumer units (000)
Average Annual Expenditures
Food:
Food At Home:

Non-college
Total
85,389
$41,024
$5,395
$3,213

EDUCATION HEAD OF HOUSEHOLD: Average Annual At-Home Food Expenditures


Source: Food Institute Analysis Based on bureau of Labor Statistics' 2007 Consumer Expenditure Survey

$772
$515
$396

Less Than High School


$311

$1,033
$779
$504
H.S. Graduate

$427
$348
$1,138
$714
$520
$428
$367

Meats, Poultry,
Fish and Eggs

$1,144

Fruits and
Vegetables

$813
$597
Associate's

Cereals and
Bakery products

$477
$403
$1,379

Dairy products

$782

Other Food At
Home

$697
Bachelor's

$512
$442
$1,384
$864
$927

Higher Degrees

$576
$512
$1,593

355

H.S. & Some College

EDUCATION OF HEAD OF HOUSEHOLD: Distribution of Food Expenditures


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Meats, Poultry, Fish, And Eggs:


Eggs
Beef
Pork
Other Meat
Poultry
Fish And Seafood
Fruits And Vegetables:
Fresh Fruits
Fresh Vegetables
Processed Fruits
Processed Vegetables
Cereals And Bakery Products:
Cereals And Cereal Products
Bakery Products
Dairy Products:
Fresh Milk And Cream
Other Dairy Products
Other Food At Home:
Sugar And Other Sweets
Fats And Oils
Miscellaneous Foods
Nonalcoholic Beverages
Food For Out-Of-Town Trips

Food Away From Home


Alcoholic Beverages

Not a 4-yr. College Graduate


< High
H.S.
H.S. & some
School
Graduate
College
18,227
30,313
26,169
$30,201
$39,164
$45,876

4-Year College Graduate


Associate
Degree
10,680
$52,721

College Grad
Total

Bachelor's

Higher
Degrees

34,782
$145,238

22,523
$65,706

12,259
$79,532

100.00%
61.7%
68.7%
69.3%
70.2%
72.7%
68.7%
68.3%
61.4%
61.0%
58.2%
60.6%
62.1%
66.5%
65.1%
65.4%
65.0%
63.9%
68.0%
61.2%
66.5%
64.0%
66.9%
64.3%
67.5%
50.3%

100.00%
10.2%
13.7%
14.5%
14.3%
15.0%
11.9%
14.0%
12.2%
11.9%
11.2%
12.3%
11.3%
12.3%
11.9%
13.1%
11.4%
11.1%
13.2%
9.8%
12.3%
11.0%
12.3%
11.3%
12.8%
5.4%

100.00%
22.2%
26.1%
25.6%
27.2%
29.2%
27.0%
24.7%
21.5%
21.9%
20.4%
21.6%
22.8%
24.3%
24.2%
23.3%
24.6%
23.4%
25.0%
22.4%
24.3%
24.0%
24.3%
23.4%
25.6%
16.3%

100.00%
20.1%
19.8%
21.2%
20.5%
19.4%
20.2%
19.3%
18.9%
18.7%
17.9%
18.5%
18.6%
20.8%
20.1%
19.5%
20.3%
20.4%
21.1%
20.0%
20.8%
19.6%
21.2%
19.6%
20.3%
19.3%

100.00%
9.2%
9.0%
8.0%
8.2%
9.1%
9.5%
10.3%
8.8%
8.6%
8.3%
8.2%
9.4%
9.0%
8.9%
9.4%
8.7%
8.9%
8.8%
9.1%
9.0%
9.4%
9.1%
10.0%
8.8%
9.4%

100.00%
35.0%
31.3%
30.7%
29.8%
27.3%
31.3%
31.7%
38.6%
39.0%
41.8%
39.4%
37.9%
33.5%
34.9%
34.6%
35.0%
36.1%
32.0%
38.8%
33.5%
36.0%
33.1%
35.7%
32.5%
49.7%

100.00%
20.9%
19.1%
19.3%
18.7%
17.0%
19.0%
19.7%
21.7%
22.1%
23.3%
22.1%
22.1%
19.6%
21.2%
20.3%
21.5%
21.7%
19.6%
23.0%
19.6%
21.3%
20.3%
21.6%
19.7%
28.3%

100.00%
14.1%
12.2%
11.4%
11.0%
10.3%
12.3%
11.9%
16.9%
16.9%
18.6%
17.3%
15.8%
14.0%
13.7%
14.3%
13.5%
14.4%
12.4%
15.8%
14.0%
14.6%
12.8%
14.1%
12.8%
21.4%

57.4%

7.7%

19.8%

20.7%

9.2%

42.6%

25.4%

17.2%

52.4%

5.3%

18.8%

19.9%

8.5%

47.6%

30.9%

16.7%

356

Item
Number of consumer units (000)
Average Annual Expenditures
Food:
Food At Home:

Non-college
Total
85,389
$167,962

EDUCATION OF HEAD OF HOUSEHOLD: Food Spending As A Percent of Annual Expenditures


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

4-Year College Graduate


Associate
Degree
10,680
$52,721

College Grad
Total

Bachelor's

Higher
Degrees

34,783
$70,605

22,523
$65,706

12,259
$79,532

13.1%
7.8%
1.9%
0.5%
0.4%
0.2%
0.3%
0.3%
0.1%
1.3%
0.4%
0.4%
0.2%
0.2%
1.0%
0.7%
0.3%
0.9%
0.4%
0.5%
2.8%
0.2%
0.8%
0.3%
0.2%
0.1%

14.9%
10.0%
2.6%
0.7%
0.5%
0.3%
0.5%
0.4%
0.1%
1.7%
0.6%
0.6%
0.3%
0.3%
1.3%
0.9%
0.4%
1.0%
0.5%
0.5%
3.4%
0.3%
1.0%
0.3%
0.3%
0.1%

13.4%
8.2%
2.0%
0.6%
0.4%
0.3%
0.3%
0.3%
0.1%
1.3%
0.4%
0.4%
0.3%
0.2%
1.1%
0.8%
0.3%
0.9%
0.4%
0.5%
2.9%
0.2%
0.8%
0.3%
0.2%
0.1%

12.5%
6.9%
1.6%
0.4%
0.3%
0.2%
0.3%
0.2%
0.1%
1.1%
0.4%
0.4%
0.2%
0.2%
0.0
0.7%
0.3%
0.8%
0.3%
0.5%
2.5%
0.2%
0.7%
0.2%
0.2%
0.1%

12.4%
7.0%
1.5%
0.4%
0.3%
0.2%
0.3%
0.2%
0.1%
1.1%
0.4%
0.3%
0.2%
0.2%
0.0
0.6%
0.3%
0.8%
0.3%
0.5%
2.6%
0.2%
0.6%
0.3%
0.2%
0.1%

11.2%
5.7%
1.1%
0.3%
0.2%
0.2%
0.2%
0.2%
0.1%
1.1%
0.4%
0.4%
0.2%
0.2%
0.0
0.5%
0.2%
0.7%
0.2%
0.4%
2.1%
0.1%
0.5%
0.2%
0.1%
0.1%

11.3%
5.8%
1.2%
0.3%
0.2%
0.2%
0.2%
0.2%
0.1%
1.1%
0.4%
0.3%
0.2%
0.1%
0.0
0.5%
0.2%
0.7%
0.2%
0.4%
2.1%
0.1%
0.5%
0.2%
0.1%
0.1%

11.0%
5.6%
1.1%
0.3%
0.2%
0.1%
0.2%
0.2%
0.1%
1.2%
0.4%
0.4%
0.2%
0.2%
0.0
0.5%
0.2%
0.6%
0.2%
0.4%
2.0%
0.1%
0.5%
0.2%
0.1%
0.1%

Food Away From Home

5.3%

4.8%

5.2%

5.6%

5.4%

5.4%

5.4%

5.4%

Alcoholic Beverages

0.8%

0.6%

0.8%

0.9%

0.8%

1.0%

1.1%

0.9%

Meats, Poultry, Fish, And Eggs:


Beef
Pork
Other Meat
Poultry
Fish And Seafood
Eggs
Fruits And Vegetables:
Fresh Fruits
Fresh Vegetables
Processed Fruits
Processed Vegetables
Cereals And Bakery Products:
Bakery Products
Cereals And Cereal Products
Dairy Products:
Other Dairy Products
Fresh Milk And Cream
Other Food At Home:
Miscellaneous Foods
Nonalcoholic Beverages
Sugar And Other Sweets
Fats And Oils
Food For Out-Of-Town Trips

357

Item
Number of consumer units (000)
Average Annual Expenditures
Food:
Food At Home:

Not a 4-year College Graduate


Non-college < High
H.S.
H.S. & some
Total
School Graduate
College
85,389
18,227
30,313
26,169
$41,024
$30,201 $39,164
$45,876

359

SIZE OF HOUSEHOLD

SIZE OF HOUSEHOLD: Average Annual Food Expenditures


Item
Number of consumer units (000)
Average Annual Expenditures
Average Number Of Persons
Food:
Food At Home:
Meats, Poultry, Fish, And Eggs:
Beef
Pork
Poultry
Fish And Seafood
Other Meat
Eggs
Fruits And Vegetables:
Fresh Fruits
Fresh Vegetables
Processed Fruits
Processed Vegetables
Cereals And Bakery Products:
Bakery Products
Cereals And Cereal Products
Dairy Products:
Other Dairy Products
Fresh Milk And Cream
Other Food At Home:
Miscellaneous Foods
Nonalcoholic Beverages
Sugar And Other Sweets
Fats And Oils
Food For Out-Of-Town Trips

Food Away From Home


Alcoholic Beverages

All Consumer
Units
120,171
$49,638
2.5
$6,133
$3,465

1 Person
35,740
$29,285
1.0
$3,328
$1,814

2 People
38,260
$53,091
2.0
$6,209
$3,375

3 People
18,175
$57,326
3.0
$7,251
$4,227

4 People
16,496
$66,476
4.0
$8,671
$4,967

5 or more
11,499
$65,042
5.6
$9,220
$5,564

$777
$216
$150
$142
$122
$104
$43
$600
$202
$190
$112
$96
$460
$317
$143
$387
$234
$154
$1,241
$650
$333
$124
$91
$43

$390
$104
$69
$70
$67
$54
$24
$322
$111
$100
$62
$49
$238
$166
$72
$201
$121
$80
$662
$346
$180
$66
$47
$23

$744
$202
$149
$128
$128
$96
$41
$616
$209
$202
$110
$94
$437
$308
$130
$385
$245
$140
$1,193
$594
$321
$127
$97
$54

$940
$272
$190
$158
$146
$125
$48
$708
$240
$229
$122
$117
$563
$389
$174
$449
$270
$180
$1,567
$861
$406
$148
$107
$45

$1,146
$325
$221
$225
$151
$164
$59
$832
$268
$258
$170
$136
$654
$444
$210
$562
$327
$235
$1,775
$948
$482
$171
$120
$54

$1,310
$370
$236
$270
$188
$174
$73
$903
$302
$271
$177
$152
$783
$521
$262
$628
$356
$272
$1,939
$1,029
$523
$195
$142
$50

$2,668
$457

$1,514
$428

$2,834
$528

$3,024
$448

$3,704
$429

$3,656
$353

360

Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

SIZE OF HOUSEHOLD: Average Annual Food Expenditures


Food At-Home vs. Food Away-From-Home
Source: Food Institute Analysis Based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

$5,564

$4,967

$4,227
$3,704

$3,656

$3,375
361

$3,024
$2,834

$1,814
$1,514

1 Person

2 People

3 People

Food at Home

4 People

Food Away from Home

5 or more

SIZE OF HOUSEHOLD: Average Annual At-Home Food Expenditures


Source: Food Institute Analysis Based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

$390
$322
1 Person

$238
$201
$662
$744
$616

2 People

$437
$385
$1,193
$940
362

$708
$563

3 People
$449

$1,567
$1,146
$832
$654

4 People
$562

$1,775
$1,310
$903
$783

5 or more
$628

$1,939

Meats, Poultry, Fish, And Eggs:

Fruits And Vegetables:

Dairy Products:

Other Food At Home:

Cereals And Bakery Products:

SIZE OF HOUSEHOLD: Distribution of At-Home Food Spending


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

One Person
Meats, Poultry,
Fish and Eggs
21.51%

Meats, Poultry,
Fish and Eggs
22.04%

Other Food AtHome


35.35%

Fruits and
Vegetables
18.25%

Fruits and
Vegetables
17.76%

Total At- Dairy Products


11.09%
Home Food
Spending:
$1,814

Cereals and
Bakery Products
13.13%

Dairy Products
11.41%

Total At-Home
Cereals and
Food
Bakery Products
12.95%
Spending:
$3,375

Three Person

Other Food At-Home


37.07%

Meats, Poultry, Fish and


Eggs
22.24%

Fruits and Vegetables


16.75%

Dairy Products
10.62%

Cereals and Bakery Products


13.32%

Total At-Home
Food
Spending:
$4,227

363

Other Food AtHome


36.51%

Two Person

SIZE OF HOUSEHOLD: Distribution of At-Home Food Spending


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Five Person

Four Person

Meats, Poultry,
Fish and Eggs
23.55%

Other Food AtHome


34.86%

364

Other Food AtHome


35.72%

Meats, Poultry,
Fish and Eggs
23.06%

Fruits and
Vegetables
16.74%
Dairy Products
11.31%

Cereals and
Bakery Products
13.16%

Fruits and
Vegetables
16.23%
Dairy Products
11.29%

Total At-Home
Food
Spending:
$4,967

Cereals and
Bakery Products
14.08%

Total At-Home
Food
Spending:
$5,564

SIZE OF HOUSEHOLD: Distribution of Food Expenditures


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Meats, Poultry, Fish, And Eggs:


Beef
Pork
Other Meat
Poultry
Fish And Seafood
Eggs
Fruits And Vegetables:
Fresh Fruits
Fresh Vegetables
Processed Fruits
Processed Vegetables
Cereals And Bakery Products:
Cereals And Cereal Products
Bakery Products
Dairy Products:
Fresh Milk And Cream
Other Dairy Products
Other Food At Home:
Sugar And Other Sweets
Fats And Oils
Miscellaneous Foods
Nonalcoholic Beverages
Food For Out-Of-Town Trips

Food Away From Home

All Consumer
Units
1 Person 2 People 3 People 4 People 5 or more
120,171
35,740
38,260
18,175
16,496
11,499
$49,638
$29,285
$53,091
$57,326
$66,476
$65,042
2.5
1.0
2.0
3.0
4.0
5.6
100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
56.50%
54.51%
54.36%
58.30%
57.28%
60.35%
22.42%
27.80%
19.31%
18.28%
15.70%
13.38%
5.53%
17.32%
33.67%
31.67%
18.67%
16.00%
13.28%
68.91%
31.09%
11.17%
60.47%
39.79%
35.82%
52.38%
26.83%
9.99%
7.33%
3.46%

21.50%
26.67%
17.69%
17.95%
17.18%
13.85%
6.15%
17.75%
34.47%
31.06%
19.25%
15.22%
13.12%
69.75%
30.25%
11.08%
60.20%
39.80%
36.49%
52.27%
27.19%
9.97%
7.10%
3.47%

22.04%
27.15%
20.03%
17.20%
17.20%
12.90%
5.51%
18.25%
33.93%
32.79%
17.86%
15.26%
12.95%
70.48%
29.75%
11.41%
63.64%
36.36%
35.35%
49.79%
26.91%
10.65%
8.13%
4.53%

22.24%
28.94%
20.21%
16.81%
15.53%
13.30%
5.11%
16.75%
33.90%
32.34%
17.23%
16.53%
13.32%
69.09%
30.91%
10.62%
60.13%
40.09%
37.07%
54.95%
25.91%
9.44%
6.83%
2.87%

23.07%
28.36%
19.28%
19.63%
13.18%
14.31%
5.15%
16.75%
32.21%
31.01%
20.43%
16.35%
13.17%
67.89%
32.11%
11.31%
58.19%
41.81%
35.74%
53.41%
27.15%
9.63%
6.76%
3.04%

23.54%
28.24%
18.02%
20.61%
14.35%
13.28%
5.57%
16.23%
33.44%
30.01%
19.60%
16.83%
14.07%
66.54%
33.46%
11.29%
56.69%
43.31%
34.85%
53.07%
26.97%
10.06%
7.32%
2.58%

43.50%

45.49%

45.64%

41.70%

42.72%

39.65%

365

Item
Number of consumer units (000)
Average Annual Expenditures
Average Number Of Persons
Food:
Food At Home:

367

EARNERS IN HOUSEHOLD

EARNERS IN HOUSEHOLD: Average Annual Food Expenditures


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Item
Number of consumer units (000)
Average Annual Expenditures
Average Number of Person

Food:
Food At Home:
Meats, Poultry, Fish, And Eggs:
Beef
Pork
Poultry
Fish And Seafood
Other Meat
Eggs
Fruits And Vegetables:
Fresh Fruits
Fresh Vegetables
Processed Fruits
Processed Vegetables
Cereals And Bakery Products:
Bakery Products
Cereals And Cereal Products
Dairy Products:
Other Dairy Products
Fresh Milk And Cream
Other Food At Home:
Miscellaneous Foods
Nonalcoholic Beverages
Sugar And Other Sweets
Fats And Oils
Food For Out-Of-Town Trips

Food Away From Home


Alcoholic Beverages

120,171
13,210
$49,638
$21,046
2.5
1.0
$6,133
$2,409
$3,465
$1,630
$777
$354
$216
$102
$150
$70
$142
$60
$122
$50
$104
$47
$43
$25
$600
$311
$202
$106
$190
$95
$112
$63
$96
$47
$460
$228
$317
$160
$143
$68
$387
$178
$234
$102
$154
$76
$1,241
$559
$650
$284
$333
$155
$124
$64
$91
$44
$43
$13
$2,668
$779
$457
$154

22,531
$34,135
1.0
$3,875
$1,923
$411
$106
$69
$76
$78
$59
$24
$330
$115
$103
$62
$50
$244
$170
$74
$214
$131
$83
$723
$383
$196
$67
$49
$28
$1,952
$591

No
Earner

With 2 or more in Household


1
2
3 Or
Earner
Earners More Earners

10,133
$39,020
2.3
$5,486
$3,535
$788
$209
$180
$137
$113
$100
$50
$628
$222
$190
$122
$94
$490
$344
$147
$397
$233
$164
$1,232
$620
$331
$127
$116
$39
$1,951
$305

23,945
$51,092
3.0
$6,511
$3,971
$909
$253
$183
$161
$139
$122
$50
$703
$237
$221
$129
$116
$537
$367
$170
$448
$269
$179
$1,374
$721
$357
$146
$103
$48
$2,539
$373

40,006
$63,676
3.0
$7,647
$4,085
$909
$264
$173
$161
$144
$121
$46
$696
$233
$225
$126
$111
$536
$369
$167
$462
$280
$182
$1,482
$780
$394
$148
$102
$58
$3,562
$548

10,346
$72,821
4.3
$9,777
$5,570
$1,298
$340
$233
$282
$195
$179
$69
$926
$290
$297
$188
$151
$721
$493
$228
$595
$365
$229
$2,029
$1,068
$580
$187
$149
$45
$4,207
$546

368

1 Person Homes
All Consumer
No
1
Units
Earner Earner

Earners In Household: Distribution of At-Home Food Spending


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey
Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

No Earner (1 Person Home)


1 Earner (1 Person Home)
Meats, Poultry, Fish, And Eggs:
22%
Other Food
At Home:
37.6%

Other Food At Home


34%

Fruits And
Vegetables:
17.2%

Fruits And Vegetables:


19%

Dairy Products:
11%
Cereals And Bakery Products:
14%

Total At-Home
Food
Spending:
$1 630

Dairy
Products:
11.1%

Cereals And
Bakery
Products:
12.7%

Total At-Home
Food Spending:
$1,923

369

Meats,
Poultry,
Fish, And
Eggs:
21.4%

EARNERS IN HOUSEHOLD: Distribution of At-Home Food Spending


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

No Earner (2+ Home)

1 Earner (2+ Home)

Meats, Poultry,
Fish, And
Eggs:
22.3%

Other Food At
Home:
34.9%
Fruits And
Vegetables:
17.8%
Dairy Products:
11.2%

Cereals And
Bakery
Products:
13.9%

Total AtHome Food


Spending =
$3,971
370

Total AtHome
Food
Spending
= $3,535

2 Earners (2+ Home)


Other Food At
Home:
36.3%

Total AtHome
Food
Spending =
$4,085

Fruits And
Vegetables:
17.0%
Dairy
Products:
11.3%

3+ Earners (2+ Home) Meats, Poultry,

Meats, Poultry,
Fish, And
Eggs:
22.3%

Cereals And
Bakery
Products:
13.1%

Other Food At
Home:
36.4%

Total AtHome
Food
Spending
= $5,570

Fish, And
Eggs:
23.3%

Fruits And
Vegetables:
16.6%

Dairy Products:
10.7%

Cereals And
Bakery
Products:
12.9%

EARNERS IN HOUSEHOLD: Distribution of Food Expenditures


Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

Item
Number of consumer units (000)
Average Annual Expenditures
Average Number of Person

Food:
Food At Home:
Meats, Poultry, Fish, And Eggs:
Beef
Pork
Other Meat
Poultry
Fish And Seafood
Eggs
Fruits And Vegetables:
Fresh Fruits
Fresh Vegetables
Processed Fruits
Processed Vegetables
Cereals And Bakery Products:
Cereals And Cereal Products
Bakery Products
Dairy Products:
Fresh Milk And Cream
Other Dairy Products
Other Food At Home:
Sugar And Other Sweets
Fats And Oils
Miscellaneous Foods
Nonalcoholic Beverages
Food For Out-Of-Town Trips

Food Away From Home


Alcoholic Beverages

120,171
$49,638
2.5
100.00%
56.50%
22.42%
27.80%
19.31%
18.28%
15.70%
13.38%
5.53%
17.32%
33.67%
31.67%
18.67%
16.00%
13.28%
68.91%
31.09%
11.17%
60.47%
52.20%
35.82%
52.38%
26.83%
9.99%
7.33%
3.46%
43.50%
13.19%

13,210
$21,046
1.0
100.00%
67.66%
21.72%
28.81%
19.77%
16.95%
14.12%
13.28%
7.06%
19.08%
34.08%
30.55%
20.26%
15.11%
13.99%
70.18%
29.82%
10.92%
57.30%
59.55%
34.29%
50.81%
27.73%
11.45%
7.87%
2.33%
32.34%
9.45%

22,531
$34,135
1.0
100.00%
49.63%
21.37%
25.79%
16.79%
18.49%
18.98%
14.36%
5.84%
17.16%
34.85%
31.21%
18.79%
15.15%
12.69%
69.67%
30.33%
11.13%
61.21%
53.74%
37.60%
52.97%
27.11%
9.27%
6.78%
3.87%
50.37%
30.73%

No
Earner

With 2 or more in Household


1
2
3 Or
Earner
Earners More Earners

10,133
$39,020
2.3
100.00%
64.44%
22.29%
26.52%
22.84%
17.39%
14.34%
12.69%
6.35%
17.77%
35.35%
30.25%
19.43%
14.97%
13.86%
70.20%
30.00%
11.23%
58.69%
55.92%
34.85%
50.32%
26.87%
10.31%
9.42%
3.17%
35.56%
8.63%

23,945
$51,092
3.0
100.00%
60.99%
22.89%
27.83%
20.13%
17.71%
15.29%
13.42%
5.50%
17.70%
33.71%
31.44%
18.35%
16.50%
13.52%
68.34%
31.66%
11.28%
60.04%
52.90%
34.60%
52.47%
25.98%
10.63%
7.50%
3.49%
39.00%
9.39%

40,006
$63,676
3.0
100.00%
53.42%
22.25%
29.04%
19.03%
17.71%
15.84%
13.31%
5.06%
17.04%
33.48%
32.33%
18.10%
15.95%
13.12%
68.84%
31.16%
11.31%
60.61%
50.43%
36.28%
52.63%
26.59%
9.99%
6.88%
3.91%
46.58%
13.41%

10,346
$72,821
4.3
100.00%
56.97%
23.30%
26.19%
17.95%
21.73%
15.02%
13.79%
5.32%
16.62%
31.32%
32.07%
20.30%
16.31%
12.94%
68.38%
31.62%
10.68%
61.34%
48.74%
36.43%
52.64%
28.59%
9.22%
7.34%
2.22%
43.03%
9.80%

371

1 Person Homes
All Consumer
No
1
Units
Earner
Earner

EARNERS IN HOUSEHOLD: Food Spending As A Percent of Annual Expenditures


1 Person Homes
All Consumer
No
1
Units
Earner Earner

Item
Number of consumer units (000)
Average Annual Expenditures
Average Number of Person

Food:
Food At Home:
Meats, Poultry, Fish, And Eggs:
Beef
Pork
Poultry
Other Meat
Fish And Seafood
Eggs
Fruits And Vegetables:
Fresh Fruits
Fresh Vegetables
Processed Fruits
Processed Vegetables
Cereals And Bakery Products:
Bakery Products
Cereals And Cereal Products
Dairy Products:
Other Dairy Products
Fresh Milk And Cream
Other Food At Home:
Miscellaneous Foods
Nonalcoholic Beverages
Sugar And Other Sweets
Fats And Oils
Food For Out-Of-Town Trips

Food Away From Home


Alcoholic Beverages

120,171
$49,638
2.5
12.4%
7.0%
1.6%
0.40%
0.30%
0.30%
0.20%
0.20%
0.1%
1.2%
0.4%
0.4%
0.2%
0.2%
0.9%
0.6%
0.3%
0.8%
0.5%
30.0%
2.5%
1.3%
0.7%
0.3%
0.2%
0.1%
5.4%
0.9%

13,210
$21,046
1.0
11.4%
7.7%
1.7%
0.50%
0.30%
0.30%
0.20%
0.20%
0.1%
1.5%
0.5%
0.5%
0.3%
0.2%
1.1%
0.8%
0.3%
0.8%
0.5%
40.0%
2.7%
1.3%
0.7%
0.3%
0.2%
0.1%
3.7%
0.7%

22,531
$34,135
1.0
11.4%
5.6%
1.2%
0.30%
0.20%
0.20%
0.20%
0.20%
0.1%
1.0%
0.3%
0.3%
0.2%
0.1%
0.7%
0.5%
0.2%
0.6%
0.4%
20.0%
2.1%
1.1%
0.6%
0.2%
0.1%
0.1%
5.7%
1.7%

No
Earner

With 2 or more in Household


1
2
3 Or
Earner
Earners
More Earners

10,133
$39,020
2.3
14.1%
9.1%
2.0%
0.50%
0.50%
0.40%
0.30%
0.30%
0.1%
1.6%
0.6%
0.5%
0.3%
0.2%
1.3%
0.9%
0.4%
1.0%
0.6%
40.0%
3.2%
1.6%
0.8%
0.3%
0.3%
0.1%
5.0%
0.8%

23,945
$51,092
3.0
12.7%
7.8%
1.8%
0.50%
0.40%
0.30%
0.20%
0.30%
0.1%
1.4%
0.5%
0.4%
0.3%
0.2%
1.1%
0.7%
0.3%
0.9%
0.5%
40.0%
2.7%
1.4%
0.7%
0.3%
0.2%
0.1%
5.0%
0.7%

40,006
$63,676
3.0
12.0%
6.4%
1.4%
0.40%
0.30%
0.30%
0.20%
0.20%
0.1%
1.1%
0.4%
0.4%
0.2%
0.2%
0.8%
0.6%
0.3%
0.7%
0.4%
30.0%
2.3%
1.2%
0.6%
0.2%
0.2%
0.1%
5.6%
0.9%

10,346
$72,821
4.3
13.4%
7.6%
1.8%
0.50%
0.30%
0.40%
0.20%
0.30%
0.1%
1.3%
0.4%
0.4%
0.3%
0.2%
1.0%
0.7%
0.3%
0.8%
0.5%
30.0%
2.8%
1.5%
0.8%
0.3%
0.2%
0.1%
5.8%
0.7%

372

Source: Food Institute analysis based on Bureau of Labor Statistics' 2007 Consumer Expenditure Survey

373

POPULATION

U.S. Population: Past and Projected Totals


Source: Food Institute analysis based on U.S. Census, March 2007

4.34
3.50
85 & Up

2.34
1.93
1.85
20.17
20.03
19.30

65-84

In Millions

16.05
12.97
22.43
22.68
22.57

2050

24.71
26.10

2040
2030

25.25
24.99
25.50
26.28
26.78

25-44

18-24

Under 18

9.01
9.13
9.12
9.03
9.90
23.14
23.17
23.51
23.93
24.25

2020
2010

374

45-64

U.S. Population: Past and Projected - Females


Source: Food Institute analysis based on U.S. Census, March 2007

21.79
21.74
20.99
17.61
14.57

65-84

22.39
22.58
22.54
24.87
26.36

45-64

In Millions

2050
2040
2030

24.78
24.49
24.95
25.67
26.17

25-44

18-24

Under 18

8.74
8.85
8.84
8.75
9.55
22.31
22.33
22.68
23.10
23.36

2020
2010

375

85 & Up

5.19
4.23
2.88
2.46
2.45

U.S. Population: Past and Projected - Males


Source: Food Institute analysis based on U.S. Census, March 2007

65-84

18.50
18.25
17.56
14.46
11.32

In Millions

22.48
22.78
22.60
24.54
25.84

45-64

2050
2040
2030

25.74
25.51
26.06
26.91
27.42

25-44

18-24

Under 18

9.29
9.42
9.41
9.31
10.26
24.00
24.04
24.37
24.78
26.16

2020
2010

376

85 & Up

3.46
2.75
1.79
1.39
1.24

CONSUMER PRICE INDEX

CONSUMER PRICE INDEX - ALL ITEMS


Source: U.S. Bureau of Labor Statistics
All Items
Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Annual

1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009

161.6
164.3
168.8
175.1
177.1
181.7
185.2
190.7
198.3
202.4
211.1
211.1

161.9
164.5
169.8
175.8
177.8
183.1
186.2
191.8
198.7
203.5
211.7
212.2

162.2
165.0
171.2
176.2
178.8
184.2
187.4
193.3
199.8
205.4
213.5
212.7

162.5
166.2
171.3
176.9
179.8
183.8
188.0
194.6
201.5
206.7
214.8
213.2

162.8
166.2
171.5
177.7
179.8
183.5
189.1
194.4
202.5
207.9
216.6
213.9

163.0
166.2
172.4
178.0
179.9
183.7
189.7
194.5
202.9
208.4
218.8
215.7

163.2
166.7
172.8
177.5
180.1
183.9
189.4
195.4
203.5
208.3
220.0

163.4
167.1
172.8
177.5
180.7
184.6
189.5
196.4
203.9
207.9
219.1

163.6
167.9
173.7
178.3
181.0
185.2
189.9
198.8
202.9
208.5
218.8

164.0
168.2
174.0
177.7
181.3
185.0
190.9
199.2
201.8
208.9
216.6

164.0
168.3
174.1
177.4
181.3
184.5
191.0
197.6
201.5
210.2
212.4

163.9
168.3
174.0
176.7
180.9
184.3
190.3
196.8
201.8
210.0
210.2

163.0
166.6
172.2
177.1
179.9
184.0
188.9
195.3
201.6
207.3
215.3

Annual %
Change
1.6
2.2
3.4
2.8
1.6
2.3
2.7
3.4
3.2
3.9
3.9

377

Year

CONSUMER PRICE INDEX - FOOD & BEVERAGES


Source: U.S. Bureau of Labor Statistics

Year

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Annual

Annual %
Change

1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009

160.3
163.9
166.6
171.4
176.2
178.1
184.3
189.5
194.5
199.2
208.8
219.7

159.8
163.8
166.8
171.8
176.4
178.9
184.5
189.3
194.4
200.4
209.5
219.3

160.1
163.7
167.1
172.2
176.6
179.2
184.9
189.6
194.5
200.9
209.7
218.8

160.2
163.9
167.2
172.4
176.7
179.0
185.0
190.7
194.2
201.3
211.4
218.4

160.7
164.2
167.8
172.9
176.4
179.4
186.5
191.1
194.7
202.2
212.3
218.1

160.6
164.1
167.9
173.4
176.4
180.2
186.8
190.9
195.1
202.9
213.4
218.0

160.9
164.2
168.7
174.0
176.6
180.3
187.2
191.3
195.6
203.5
215.3

161.4
164.7
169.2
174.4
176.6
180.9
187.3
191.3
196.0
204.3
216.4

161.5
165.1
169.4
174.6
176.9
181.3
187.2
191.8
196.7
205.3
217.7

162.4
165.5
169.6
175.3
177.1
182.2
188.4
192.5
197.5
206.1
218.7

162.5
165.7
169.5
175.2
177.4
182.9
188.6
192.8
197.2
206.6
218.8

162.7
165.9
170.5
175.2
177.8
184.1
188.9
193.2
197.4
206.9
218.8

161.1
164.6
168.4
173.6
176.8
180.5
186.6
191.2
195.7
203.3
214.2

2.2
2.2
2.3
3.1
1.8
2.1
3.4
2.5
2.4
3.9
5.4

378

Food and Beverages

CONSUMER PRICE INDEX - FOOD


Source: U.S. Bureau of Labor Statistics

Year

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Annual

Annual %
Change

1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009

159.9
163.6
166.1
170.9
175.8
177.5
183.8
189.1
194.1
198.8
208.6
219.7

159.4
163.3
166.3
171.3
175.9
178.3
184.1
188.8
194.0
200.0
209.2
219.2

159.7
163.3
166.5
171.7
176.1
178.6
184.4
189.1
194.0
200.4
209.4
218.6

159.8
163.4
166.6
171.9
176.2
178.4
184.5
190.2
193.7
200.8
211.1
218.2

160.3
163.7
167.3
172.5
175.8
178.8
186.1
190.6
194.2
201.8
212.0
217.8

160.1
163.6
167.3
173.0
175.8
179.6
186.3
190.4
194.5
202.4
213.2
217.7

160.5
163.8
168.1
173.5
176.0
179.7
186.8
190.8
195.0
203.1
215.3

161.0
164.2
168.7
173.9
176.0
180.4
186.8
190.9
195.5
203.9
216.4

161.1
164.6
168.9
174.1
176.4
180.7
186.7
191.4
196.2
204.9
217.7

162.0
165.1
169.1
174.9
176.5
181.7
187.9
192.1
197.1
205.8
218.7

162.1
165.2
168.9
174.6
176.8
182.4
188.2
192.4
196.8
206.3
218.7

162.3
165.4
170.0
174.7
177.3
183.6
188.5
192.9
197.0
206.7
218.8

160.7
164.1
167.8
173.1
176.2
180.0
186.2
190.7
195.2
202.9
214.1

2.2
2.1
2.3
3.2
1.8
2.2
3.4
2.4
2.4
3.9
5.5

379

Food

CONSUMER PRICE INDEX - FOOD AT HOME


Source: U.S. Bureau of Labor Statistics

Year

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Annual

Annual %
Change

1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009

161.0
164.3
166.3
171.3
176.2
176.7
184.0
188.9
193.4
196.7
208.0
219.7

160.0
163.8
166.3
171.8
176.0
177.6
184.0
188.0
192.6
198.2
208.3
218.4

160.2
163.4
166.4
172.0
176.3
177.7
184.3
188.1
192.3
198.8
208.2
217.1

160.2
163.5
166.5
172.2
176.4
177.3
184.1
189.8
191.5
199.0
210.9
215.8

160.7
163.9
167.5
172.8
175.5
177.8
186.6
190.3
191.9
200.3
211.9
215.1

160.5
163.7
167.3
173.3
175.0
178.9
186.8
189.4
192.2
201.0
213.2
214.8

160.8
163.7
168.3
173.9
175.2
178.9
187.1
189.8
192.6
201.4
215.8

161.4
164.1
168.9
174.2
174.9
179.7
186.7
189.5
193.1
202.1
217.3

161.2
164.5
169.0
174.3
175.2
180.1
186.1
190.0
194.1
203.2
218.6

162.5
165.1
169.1
175.2
175.1
181.5
187.9
190.8
195.1
204.3
219.7

162.5
165.1
168.8
174.7
175.5
182.4
188.1
191.0
194.3
204.7
219.1

162.6
165.4
170.2
174.7
176.1
184.1
188.5
191.7
194.3
205.2
218.7

161.1
164.2
167.9
173.4
175.6
179.4
186.2
189.8
193.1
201.2
214.1

1.9
1.9
2.3
3.3
1.3
2.2
3.8
1.9
1.7
4.2
6.4

Other food at home


Year

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Annual

1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009

148.7
153.0
154.3
157.8
161.3
161.8
162.8
165.6
169.1
170.9
176.1
192.5

149.1
153.3
154.4
157.9
160.4
162.2
163.7
165.3
169.1
171.5
177.9
192.4

149.5
152.9
155.1
158.6
159.9
162.6
165.1
165.7
169.2
171.8
178.2
192.2

149.6
153.6
154.0
157.6
161.5
162.1
165.0
167.5
168.8
172.6
181.8
191.4

149.3
153.4
155.4
159.6
160.0
162.1
165.4
166.3
170.0
172.7
182.7
191.1

150.4
153.6
156.2
159.5
160.8
163.4
165.8
166.9
170.0
173.8
183.8
191.3

151.1
153.7
156.6
160.4
161.0
162.7
166.0
167.6
171.0
174.4
185.7

152.1
154.2
156.9
161.0
160.6
163.2
166.2
167.7
170.6
174.7
187.0

152.2
153.9
156.7
160.2
160.8
163.1
165.2
167.7
169.8
174.2
187.9

152.7
153.7
155.8
160.9
160.9
163.0
165.4
168.3
170.1
174.7
189.3

152.7
153.0
156.0
160.3
161.1
162.0
164.4
167.3
169.2
174.0
189.3

152.4
153.3
156.3
160.9
161.1
163.0
163.6
167.6
168.7
174.1
190.2

150.8
153.5
155.6
159.6
160.8
162.6
164.9
167.0
169.6
173.3
184.2

Annual %
Change
2.4
1.8
1.4
2.6
0.8
1.1
1.4
1.3
1.6
2.2
6.3

380

Food at Home

CONSUMER PRICE INDEX - FOOD AWAY FROM HOME


Source: U.S. Bureau of Labor Statistics
Food away from home
Year

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Annual

1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009

159.2
163.5
167.2
171.4
176.4
179.9
184.9
190.8
196.6
203.2
211.1
221.3

159.6
163.8
167.6
171.8
177.0
180.7
185.5
191.4
197.2
203.9
211.9
222.0

159.9
164.2
167.9
172.3
177.1
181.0
185.8
191.7
197.6
204.1
212.6
222.2

160.2
164.5
168.1
172.7
177.2
181.1
186.2
192.1
198.0
204.7
213.1
222.9

160.6
164.6
168.3
173.1
177.6
181.5
186.7
192.6
198.7
205.2
214.0
223.0

160.7
164.6
168.6
173.6
178.2
181.9
187.0
193.2
199.2
205.9
215.0
223.2

161.1
165.1
169.1
174.1
178.5
182.3
187.8
193.6
199.7
206.9
216.4

161.5
165.6
169.5
174.7
178.8
182.6
188.4
194.2
200.2
207.8
217.0

162.1
165.8
170.0
175.1
179.2
182.8
188.9
194.6
200.5
208.8
218.2

162.3
166.2
170.3
175.6
179.6
183.3
189.4
195.2
201.1
209.3
219.3

162.6
166.5
170.4
175.8
179.8
183.8
189.6
195.6
201.6
209.9
220.0

163.0
166.8
170.8
176.0
180.1
184.3
189.9
196.0
202.2
210.2
220.7

161.1
165.1
169.0
173.9
178.3
182.1
187.5
193.4
199.4
206.7
215.8

Year

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Annual

1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009

100.2
103.2
105.4
108.6
111.7
114.1
116.9
120.5
123.6
128.1
132.9
138.0

100.4
103.6
105.7
108.9
112.1
114.4
117.2
120.8
124.2
128.5
133.4
138.4

100.7
103.8
106.0
109.3
112.3
114.6
117.4
121.0
124.5
128.7
133.8
138.6

101.0
103.9
106.3
109.6
112.4
114.7
117.6
121.2
124.9
128.9
134.2
139.2

101.3
104.0
106.5
109.8
112.6
114.8
117.8
121.4
125.4
129.3
134.6
139.2

101.4
104.1
106.7
110.1
113.0
115.2
118.0
121.7
125.7
129.9
135.3
139.3

101.6
104.5
107.1
110.5
113.1
115.4
118.6
122.0
126.1
130.5
135.9

101.9
104.6
107.3
110.9
113.3
115.6
118.9
122.3
126.3
130.9
136.1

102.1
104.7
107.6
111.0
113.5
115.7
119.2
122.5
126.4
131.3
136.7

102.3
104.8
107.6
111.3
113.7
115.9
119.4
122.8
127.0
131.7
137.2

102.5
105.0
107.9
111.5
113.8
116.2
119.7
123.1
127.1
132.2
137.4

102.8
105.1
108.0
111.6
114.0
116.5
119.9
123.3
127.5
132.4
137.6

101.5
104.3
106.8
110.3
113.0
115.3
118.4
121.9
125.7
130.2
135.4

Annual %
Change
2.6
2.5
2.4
2.9
2.5
2.1
3.0
3.1
3.1
3.7
4.4

Annual %
Change
2.8
2.4
3.3
2.4
2.0
2.7
3.0
3.1
3.6
4.0

381

Full service meals and snacks

Limited service meals and snacks


Year

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Annual

1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009

100.2
102.6
105.2
108.1
111.8
113.3
116.7
120.6
124.6
128.2
133.6
141.5

100.5
102.4
105.3
108.1
112.0
114.0
117.2
121.0
124.8
128.8
134.0
141.9

100.6
102.7
105.7
108.5
112.0
114.3
117.3
121.3
125.0
128.8
134.5
142.0

100.7
103.1
105.8
108.8
112.0
114.2
117.7
121.6
125.2
129.3
134.8
142.3

101.0
103.2
105.9
109.1
112.2
114.6
118.1
121.9
125.6
129.7
135.5
142.4

100.9
103.3
106.1
109.3
112.6
114.6
118.3
122.3
125.9
130.0
136.2
142.7

101.3
103.6
106.3
109.7
112.9
115.0
118.9
122.6
126.2
130.7
137.4

101.4
103.9
106.6
110.1
113.0
115.1
119.4
123.0
126.5
131.3
137.9

101.8
104.1
106.8
110.3
113.2
115.2
119.6
123.2
126.6
131.9
138.7

101.9
104.3
107.0
110.7
113.4
115.6
119.8
123.6
126.8
132.4
139.5

102.0
104.5
107.4
111.0
113.6
116.0
119.8
123.9
127.3
132.5
140.3

102.2
104.9
107.8
111.3
113.7
116.3
120.0
124.0
127.7
133.0
140.9

101.2
103.6
106.3
109.6
112.7
114.9
118.6
122.4
126.0
130.6
136.9

Year

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Annual

1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009

99.9
102.6
104.6
104.5
106.3
111.4
114.2
117.6
120.9
125.2
128.7
136.5

100.0
102.7
104.8
104.7
106.5
111.4
114.6
117.7
120.9
125.7
129.0
136.8

100.0
102.9
104.8
104.7
106.7
111.4
114.7
117.8
120.9
125.6
129.4
136.9

100.2
102.8
103.8
104.8
106.7
111.4
115.0
117.9
121.0
125.9
129.5
137.1

100.3
102.9
103.8
104.9
107.2
111.6
115.0
117.8
121.4
125.9
129.8
137.1

100.5
101.7
103.9
105.4
107.5
111.7
114.4
118.1
121.7
125.8
130.7
134.7

100.5
102.2
104.2
105.6
107.6
111.8
114.5
117.8
122.0
126.2
133.1

100.7
103.4
104.4
105.9
108.7
112.6
115.1
117.8
122.9
127.1
135.2

101.6
103.7
104.9
106.3
109.5
113.4
116.4
119.1
124.9
128.4
135.6

102.1
104.3
105.4
106.9
110.0
113.6
117.1
120.1
125.1
128.3
135.7

102.3
104.5
104.1
106.1
110.1
113.9
117.2
120.3
125.0
128.6
136.0

102.5
104.5
104.3
106.2
111.3
114.1
117.4
120.6
125.0
128.5
131.8

101.2
103.6
106.3
109.6
112.7
114.9
118.6
122.4
126.0
126.8
132.0

Annual %
Change
2.3
2.4
2.6
3.1
2.8
2.0
3.2
3.2
3.7
4.8

Food at employee sites and schools

2.3
1.2
1.1
2.6
3.9
2.8
2.7
3.4
0.1
4.1

382

Annual %
Change

Food from vending machines and mobile vendors


Year

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Annual

1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009

100.1
101.0
101.7
103.2
104.9
106.3
108.8
111.0
114.3
116.3
121.2
128.5

100.2
101.2
101.9
103.6
104.9
106.3
109.0
111.2
114.5
116.6
121.6
128.6

100.3
101.1
102.0
103.9
105.0
106.9
109.4
111.6
114.6
116.7
121.6
128.9

100.4
101.2
102.2
103.9
105.1
107.2
109.5
112.1
114.5
116.8
122.4
129.2

100.6
101.3
102.3
104.2
105.3
107.5
109.6
112.2
114.7
117.3
123.4
129.2

100.4
101.3
102.3
104.3
105.5
107.8
109.7
112.5
114.8
117.8
124.1
129.0

100.4
101.3
102.4
104.4
105.8
108.2
109.8
112.7
115.0
118.3
124.4

100.6
101.4
102.6
104.4
105.8
108.4
110.1
112.8
115.1
119.3
124.6

100.8
101.5
102.7
104.5
106.1
108.4
110.2
113.1
115.4
120.0
124.9

100.7
101.5
102.9
104.7
106.2
108.4
110.3
113.6
115.6
120.1
125.1

100.8
101.6
103.0
104.7
106.0
108.6
110.7
113.8
116.2
120.2
127.3

100.9
101.6
103.1
104.7
106.1
108.6
111.0
114.2
116.5
120.4
128.6

100.5
101.3
102.4
104.2
105.6
107.7
109.8
112.6
115.1
118.3
124.1

Year

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Annual

1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009

100.1
103.5
107.5
111.3
115.5
119.9
123.9
127.5
134.1
140.9
146.6
153.4

100.4
103.7
107.9
111.4
115.8
120.2
124.0
128.7
134.7
141.6
148.4
154.7

100.3
103.7
107.9
111.6
116.3
120.4
124.1
129.4
135.2
141.4
148.6
154.4

100.6
104.0
108.0
111.8
116.9
120.4
124.7
129.6
135.8
143.2
148.7
155.1

100.6
104.3
108.1
112.4
117.1
120.5
124.8
130.3
136.0
143.2
149.7
155.1

101.0
104.4
108.1
112.6
117.6
121.2
124.8
131.6
136.3
143.2
149.9
155.8

101.6
105.5
108.7
113.8
117.7
121.3
125.1
132.0
136.8
144.8
151.1

102.3
105.8
109.3
114.3
118.1
121.4
125.4
132.6
137.3
145.4
151.1

102.7
106.4
110.0
115.3
118.8
121.8
125.9
133.2
137.6
146.8
152.0

102.7
106.8
110.5
115.4
119.1
122.3
126.8
133.5
138.0
146.1
153.5

103.3
106.9
111.0
115.4
119.7
122.7
126.7
133.7
138.6
146.6
154.0

103.3
106.9
111.1
115.5
119.8
122.9
127.0
133.7
139.1
145.8
154.1

101.6
105.2
109.0
113.4
117.7
121.3
125.3
131.3
136.6
144.1
150.6

Annual %
Change
0.1
0.8
1.1
1.8
1.3
2.0
1.9
2.6
2.8
4.9

Other food away from home

3.5
3.6
4.0
3.8
3.1
3.3
4.8
4.0
5.5
4.5

383

Annual %
Change

CONSUMER PRICE INDEX - NONALCOHOLIC BEVERAGES


Source: U.S. Bureau of Labor Statistics
Nonalcoholic beverages and beverage materials
Year

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Annual

1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009

134.1
133.5
137.1
139.4
139.5
140.6
140.7
142.2
147.2
151.1
157.9
164.9

134.8
134.5
138.4
139.9
140.0
140.8
141.4
142.5
147.3
151.7
157.8
164.2

134.2
134.5
138.5
139.5
140.1
140.3
140.8
143.6
148.0
153.9
158.1
165.7

133.9
134.3
137.6
138.9
140.0
140.5
139.7
144.8
146.3
151.8
159.7
162.9

132.9
134.2
137.3
138.1
138.0
140.3
139.9
144.3
146.6
152.9
158.3
162.8

132.8
134.3
137.5
138.6
137.5
140.3
139.8
144.0
146.6
153.1
158.3
162.6

132.3
134.3
138.5
138.9
138.3
138.4
140.5
144.8
146.3
153.4
159.3

132.0
134.5
138.2
140.0
137.6
139.7
140.3
144.3
146.9
154.8
160.1

132.2
134.2
138.0
139.2
140.2
139.2
140.3
145.2
147.5
155.0
161.5

132.6
134.6
137.4
139.9
140.5
140.5
140.6
145.6
148.3
155.6
163.7

132.7
133.9
137.9
139.5
139.1
137.9
139.6
145.5
148.9
154.3
163.0

131.7
134.7
136.7
138.5
139.8
139.3
140.6
145.5
148.5
153.6
162.8

133.0
134.3
137.8
139.2
139.2
139.8
140.4
144.4
147.4
153.4
160.0

Annual %
Change
-0.3
1.0
2.6
1.0
0.0
0.4
0.4
2.8
2.1
4.1
4.3

Year

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Annual

1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009

101.1
101.9
104.9
107.5
108.1
108.5
108.8
109.2
113.3
116.2
121.3
127.6

101.7
102.6
106.1
108.1
108.4
108.7
109.3
109.4
112.9
116.4
122.1
127.1

101.1
102.7
106.2
107.6
108.7
108.1
108.7
110.5
113.3
118.6
121.3
128.6

100.7
102.5
105.3
107.1
108.8
108.6
108.1
111.3
112.2
116.5
122.9
126.5

99.8
102.4
105.1
106.4
106.9
108.7
108.4
110.6
112.4
117.5
121.3
126.6

100.3
102.7
105.4
107.2
106.6
108.3
108.4
110.0
112.9
117.6
121.1
126.3

99.8
102.5
106.4
107.2
107.0
106.6
109.0
110.8
112.6
117.9
122.1

99.7
102.5
106.0
108.3
106.3
107.9
108.6
110.2
112.8
118.8
122.1

100.0
102.3
105.8
107.4
108.6
107.8
108.5
111.3
113.5
119.3
124.4

100.6
102.6
105.4
108.2
109.0
108.9
108.6
111.3
114.2
119.5
126.1

100.7
102.2
106.0
107.8
107.3
106.1
107.5
110.9
114.2
118.6
125.9

99.9
102.9
104.9
106.9
108.0
107.4
108.3
111.5
113.6
117.6
126.2

100.5
102.5
105.6
107.5
107.8
108.0
108.5
110.6
113.2
117.9
123.1

Annual %
Change
2.0
3.0
1.8
0.3
0.2
0.5
1.9
2.4
4.2
4.4

384

Juices and nonalcoholic drinks

Carbonated drinks
Year

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Annual

1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009

118.3
117.4
122.1
126.0
126.5
126.5
127.2
130.0
135.7
137.8
143.7
154.9

120.1
119.2
125.2
127.4
127.9
126.7
129.4
130.4
134.7
138.0
146.5
155.5

119.4
120.4
124.5
126.4
128.5
125.9
128.2
130.6
134.9
141.4
144.5
157.9

118.7
119.0
123.3
124.6
128.1
126.6
127.0
132.0
132.3
138.9
147.0
153.8

116.9
118.8
122.9
124.2
124.6
126.4
127.5
131.1
132.9
139.3
143.2
154.3

117.1
119.1
123.2
125.0
123.0
125.4
127.8
131.5
133.9
139.5
144.5
155.3

116.6
118.9
124.5
124.0
123.0
123.2
128.5
132.6
132.6
140.8
145.1

116.6
117.9
124.2
127.1
123.2
124.9
128.7
131.6
134.2
141.5
144.5

116.7
118.3
123.5
124.7
125.8
126.3
127.8
133.9
134.4
142.7
149.6

117.1
119.7
122.6
126.5
126.4
126.7
128.3
133.8
135.6
142.7
152.3

117.1
118.1
123.5
125.6
125.1
123.6
126.7
132.2
135.6
140.7
151.8

114.9
118.6
121.1
123.3
124.9
124.8
127.5
133.1
133.6
138.2
151.1

117.5
118.8
123.4
125.4
125.6
125.6
127.9
131.9
134.2
140.1
147.0

Annual %
Change
-0.7
1.1
3.9
1.6
0.2
0.0
1.8
3.1
1.7
4.4
4.9

Frozen non-carbonated juices and drinks


Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Annual

1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009

101.0
106.1
109.1
109.3
112.6
114.5
118.8
112.2
116.0
129.9
146.4
151.2

100.7
106.8
108.3
112.7
114.9
115.4
115.4
110.8
116.9
133.9
147.2
151.4

99.8
102.9
108.2
109.5
111.4
116.1
112.1
110.5
117.5
134.4
145.1
151.4

100.2
106.5
108.1
111.5
112.4
116.7
113.7
112.7
118.8
138.3
147.4
152.4

100.3
103.9
108.2
111.1
110.5
114.6
112.4
112.9
117.8
136.1
146.5
151.3

100.9
104.5
106.6
112.0
113.1
115.7
112.9
111.7
118.7
139.7
145.3
148.7

101.5
105.0
110.1
113.5
112.5
114.6
113.3
113.8
119.2
138.6
144.1

101.5
107.2
108.5
111.7
111.5
117.7
112.2
114.3
119.1
140.9
143.6

101.6
106.9
108.5
111.7
111.7
116.3
111.6
112.1
119.6
142.0
146.6

103.4
106.9
109.9
112.7
113.0
117.8
112.9
113.3
120.4
141.2
149.9

103.0
107.7
109.9
113.0
112.7
114.3
112.7
112.3
126.2
143.4
149.5

104.7
109.2
111.3
114.4
113.7
115.0
111.5
111.7
126.5
143.5
149.1

101.6
106.1
108.9
111.9
112.5
115.7
113.3
112.4
119.7
138.5
146.7

Annual %
Change
4.4
2.6
2.8
0.5
2.8
-2.1
-0.8
6.5
15.7
5.9

385

Year

Non-frozen non-carbonated juices and drinks


Year

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Annual

1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009

100.0
102.2
103.9
105.8
106.1
106.9
106.5
105.3
108.4
112.1
116.8
119.9

99.6
101.9
103.4
105.1
105.2
107.0
105.9
105.4
108.5
112.1
116.1
118.5

99.0
101.2
104.5
105.5
105.7
106.5
105.9
107.5
109.2
113.4
116.1
119.4

98.8
101.9
103.6
106.0
106.2
106.9
105.4
107.9
109.4
111.0
117.2
118.7

98.6
102.1
103.7
105.0
105.5
107.4
106.0
107.2
109.4
113.1
117.1
118.4

99.4
102.5
104.3
105.7
106.2
107.5
105.5
105.7
109.2
113.0
115.7
117.2

98.6
102.1
104.5
106.6
107.2
106.0
106.1
106.1
110.1
112.3
117.2

98.4
103.0
104.4
106.3
105.5
106.9
105.3
105.7
108.8
113.4
117.7

99.0
102.0
104.5
106.8
108.2