Hormel Foods adjusts predictions for fiscal 2008
AUSTIN, Minn. Hormel Foods has revised its projections for fiscal 2008, lowering expected totals for earnings, the company said today.
The Minnesota-based maker of branded foods and meat-products attributed its revised numbers to a decline in financial markets around the globe.
“Although we correctly anticipated a significant shortfall in earnings at Jennie-O Turkey Store during the fourth quarter, we are also experiencing greater than expected cost pressures and unfavorable product mix changes in our grocery products and refrigerated foods segments,” Jeffrey M. Ettinger, chairman of the board, president and chief operating officer of Hormel said. “Given the current investment results for the rabbi trust and our expected operating results for fiscal 2008, we are lowering our full year guidance to $2.03 to $2.09 per share from our earlier guidance range of $2.22 to $2.28 per share. However, we expect to beat fiscal year 2007 results for the full year on a segment operating profit basis.”
Ettinger said that more details about revisions to the fiscal 2008 earnings summary would be disclosed in a conference call Nov. 25.
P&G reduces the price of Folgers coffee by almost 4 percent
NEW YORK Procter and Gamble last week announced that prices of its Folgers brand coffees with drop by 3.5 percent.
P&G spokeswoman Jen Becker said the price reduction is due to lower costs to purchase green coffee.
Folgers said that its listed prices for Folgers Ground dropped 10 cents for its 10.3- to 11.5-ounce canisters. The price of Folgers’ Instant coffee also dropped by 3 cents per ounce, company representatives said.
So far, 2008 has been a volatile year for the U.S. coffee market, several other rises and drops in coffee prices have been reported since January across brands.
Cool economy heats up microwavable meal sales
With consumers looking to save money by eating dinner at home or grabbing lunch at their desks, sales of microwavable meals are expected to grow. The downturn in the economy already has had an impact on how frequently consumers are visiting restaurants for dinner.
A recent poll by NPD Group found that nearly 12 percent of lunchtime meals were brought from home last year, up from 11.3 percent in 2007, and an all-time high since 2001. Those polled said cost saving was their primary motivation for packing their lunch.
Packaged meals that can be easily prepared and eaten in their containers are especially appealing to office workers looking to grab a quick, inexpensive lunch.
Dollar sales of microwavable package dinners increased more than 22 percent in supermarkets, drug stores and mass outlets (excluding Wal-Mart) for the 52 weeks ended Aug. 10, according to Information Resources Inc.
IRI data showed Hormel Foods Hormel Compleats in the lead, with a 36 percent dollar-share of the category.
Competitors are positioning their brands as healthful choices as well. Hormel recently extended Hormel Compleats to include six healthful SKUs that contain fewer than 320 calories and less than 10 grams of fat. Compleats healthy line, which is branded with green packaging to set it apart from the rest of the line, will hit store shelves in spring 2009.
Hormel Foods, which was included on Information Resources 2007-2008 New Product Pacesetters Rising Stars list of projected top 10 food and beverage brands, has tripled in sales in the past three years making it the fastest-growing product in the company’s grocery division.
General Mills also is beefing up its quick-meal offerings with premium line extensions to its Bowl Appetit! brand and additions to its Hamburger Helper Microwave Singles brand.
Ramen noodles also are a key segment in the quick-lunch category. IRI data show dollar sales ahead 8 percent for the 52 weeks ended Aug. 10, in all three channels with Maruchan in the lead, with double-digit dollar sales increases on its ramen noodles.
The drug channel, which has significant lunch hour foot traffic, has done very well with these categories. “In the last few years, we’ve seen the number of items on drug store shelves jump from two to six, on average,” said Brett Asay, product manager of Hormel Compleats.
The drug channel has been very promotional in the category, often running deals on multiple purchases. CVS recently used an endcap to feature a Simply Asia’s rice noodle soup bowl variety four-pack priced for $3.99.
Safeway is heavily promoting noodle lunches, including Nissin Souper Meals, Chow Mein and Chow Pasta products at four for $5, while Maruchan Yakisoba Japanese-style noodles were priced five for $5. Maruchan six-pack instant noodle lunches were being promoted at two for $6.