(Bloomberg Opinion) -- On weekdays, the Spam Museum in Austin, Minnesota, might be the busiest business on Main Street. A brief, socially distanced visit reveals why. Spam isn’t just canned meat manufactured up the street by Hormel Foods Corp.; it’s played a crucial role in feeding Americans in some of the country’s toughest periods. “We’ve supported our troops through every major conflict,” reads an exhibit label close to a life-size cutout of General Dwight Eisenhower. Another notes that Hormel exported more than 130 million cans of the iconic canned pork to feed hungry soldiers and civilians from 1940 to 1945.
Americans aren’t on a wartime footing, but the Covid-19 pandemic has them eating packaged foods like they are. Spam sales surged more than 70% in the 15 weeks that ended June 13, while net grocery sales of Hormel products — including Skippy Peanut Butter and Hormel Chili — were up 8% in the company’s second quarter. Much of that boost was due to the panic stock-up that occurred as Covid-19 shuttered a lot of American activities. But nearly five months into the pandemic, the dynamics are shifting. “What we are starting to see is that consumers are staying with us,” says Luis Marconi, Hormel’s group vice president for grocery products, during a recent Zoom call.
That Spam’s customers are going back for more speaks to the changes that Covid-19 has brought to American shopping and dining habits. In particular, “nutrition,” a concept most recently associated with fresh and healthy eating, is taking on more varied meanings. Just as poverty and scarcity during the Great Depression and World War II influenced American pantries for generations, a pandemic-era mindset is likely to stick.
For the last decade the dominant American food trend has been a search for healthier, fresher and more “authentic” foods than the packaged fare that dominated American pantries during the latter half of the 20th century: out with the Tang and in with the cold-pressed juice. That quest has played out across the American supermarket. The center of the store, home to packaged, frozen and dairy products, has been in relative decline compared with the perimeter, where fresh produce and meat are typically found. U.S. sales of Campbell’s Soup declined in eight of the last nine fiscal years. But from 2010 to 2017, consumer expenditures on fresh fruit and vegetables grew 2.3%.
Nonetheless, there are outliers. In 2019, Hormel announced that its Spam brand had just enjoyed its fifth consecutive year of record growth (and will almost certainly enjoy a sixth). Marconi points to several factors that account for the sustained success of the 83-year-old brand. Like many packaged products (think Hamburger Helper), it’s proved to be highly versatile, especially for consumers who are looking for inexpensive ingredients to make familiar, tasty dinners, such as Spam and eggs and — more recently — Spam tacos and Spam musubi (a wildly popular Hawaiian sushi roll). That versatility, in turn, drives Spam’s relevance and growth. Hormel data shows that Hispanic and Asian Americans, two of the country’s fastest growing demographics, are more inclined to buy Spam than the general population.
Then came Covid-19’s economic toll. In addition to job losses and tightened pocketbooks, Americans also suddenly faced surging food prices. Pork prices are up 8.1% since February. Americans are also eating more (or even all) meals at home thanks to restaurant restrictions and suspended school schedules. At the same time, an unknown number of adult children have returned home to live — and eat — with their parents.
Predictably, the volume of groceries being purchased has expanded by as much as 31% a trip, according to one analysis. Packaged snack foods constitute a growing percentage of the haul, as stressed Americans seek out affordable indulgences or modest meal stand-ins (a pattern observed in past recessions). At the same time, 1 in 5 American parents with children at home report they’re worried about their ability to secure food, and account for a significant share of the cars seen in long lines at food pantry distributions across the country. A recent survey by the Food Marketing Institute, a trade association, found that 22% of Americans newly prioritize “making ends meet” when they cook, and 37% prioritize “getting enough basic nutrition.”
For Hormel and other packaged food makers, those shifts are a chance to reintroduce their products to consumers who may have turned away in recent years. “This is a time when we can present a versatile, very tasty, nutritious option, protein-centric, to families when they need to stretch their dollars,” Hormel’s Marconi said.
General Mills Inc., maker of Cheerios and Progresso soups, recently announced that it’s expanding its manufacturing partners to meet consumer demand. And Conagra Brands Inc., maker of frozen food classics like Hungry Man dinners and Banquet Chicken, reports a surge in customers trying out its products.
Of course, not all of those first-time Spam and Hungry Man consumers will stick with the products. Organic meats have also boomed during the pandemic. But just as Americans held to their Depression and World War II-era diets for decades, many millions of Americans will most likely continue their thrifty pandemic-era dining habits. Once Covid-19 and its economic impacts wane, they’ll seek out their new comfort foods.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Adam Minter is a Bloomberg Opinion columnist. He is the author of “Junkyard Planet: Travels in the Billion-Dollar Trash Trade” and "Secondhand: Travels in the New Global Garage Sale."
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