Tim Somheil, editor

People economize more when times are tough, and cutting food costs is at the top of the list.

Dining out less often is an easy way to economize, and consumers are cutting back on meals eaten outside the home—to the detriment of restaurateurs and foodservice equipment makers. In this issue’s report on commercial appliances, managing editor Yaling Lee reports on forecasted foodservice industry performance in 2009 and how foodservice equipment makers are helping operators cut cost through better energy efficiency and productivity.

In the United States, the Department of Agriculture tracks food prices. The USDA said the Consumer Price Index of “all food” increased 5.5% from 2007 to 2008, for the biggest annual increase since 1990. The food-away-from-home increase was bad enough at 4.4%, but food-at-home increased a whopping 6.4%. The forecast is for somewhat less of an increase in 2009. Food-at-home is expected to go up 2.5 to 3.5%.

Food prices, bad news about the economy, and the public’s newfound frugality have led to grassroots initiatives to help consumers save grocery dollars. In January, Eating Down the Fridge had food blogger Kim O’Donnel challenging consumers to stay away from the supermarket for an entire week and live off the food in their refrigerators, freezers, and pantries.

The Food Waste Reduction Challenge, which ended in March, directed consumers to inventory their refrigerator, track foods by expiration date, and eat soon-to-expire items first.

These challenges mostly find life on blogs, FaceBook, and other social networking outlets, as well as in old-fashioned, person-to-person conversation. Face-to-face and on the Web, people are talking about all aspects of the economic troubles.

What they’re saying is not always good news for the businesses that serve these consumers.

 

 Cheap Tricks for Troubled Times

As food prices rise, some in the food industry are trying to maintain the illusion of prerecession pricing by cutting package sizes. This is not new. “Half-gallon” cartons of ice cream have been shrinking for a few years and are now down to 1.5 quarts, while the price-per-package continues to climb. Some “1-lb” boxes of pasta are actually 12 oz—but the price is not 25% less than the 16-oz box it sits next to. My local grocery stores started selling 20-can packs of soda at the “sale” price of the familiar 24-can packs.

I’m not saying these packages lie about the contents. They’re accurately labeled. Still, my informal polling of friends and family suggests that most of them have had the experience of coming home from the store with products that were not what they thought they were buying.

How do they feel about it? At best, they look at it as a petty and mildly offensive shell game being played by food companies. To others, it’s closer to profiteering.

I don’t understand why any consumer products company would find either consumer response acceptable. Just as consumers’ newfound frugality will endure long after this recession ends, so will negative perceptions of the companies that made themselves part of the problem.

It’s an important point for any company to consider, whether they sell bow-tie pasta or consumer durables like appliances.