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January 28, 2004

It's The Cheesiest

You know Kraft. They're the macaroni and cheese people. And your kids know them as the cheese and macaroni people, because it's the cheesiest. Why do you know this? You know this because the smart people at Kraft spent a fortune on advertising for you to know this. And now you know. But you probably didn't know that Kraft is going to spend a lot more money to try to get you to know something else.

Kraft isn't alone in its struggles in the food business. American consumers' increased health concerns have put the entire packaged food industry under severe pressure to change quickly. Worries about the artery clogger ``trans fat,'' rising obesity and the trend toward low-carbohydrate, high-protein diets have hurt sales of cookies and some other packaged foods.

``The growing importance of health and wellness has altered buying patterns to a degree I have not seen before in the food industry,'' Kraft CEO Roger Deromedi told analysts in New York. ``Low-carb diets like Atkins and South Beach, the focus on trans fat, concerns about obesity and increased demand for organic and natural products are requiring a shift in how we market and what we market.''

But Kraft also has hurt itself through overpricing, new-product fizzles and a failure to recognize sooner the ``fundamental shift'' Deromedi says has occurred with consumers and retailers, who now put a higher priority than ever before on price and value.

So if you are one of the many hundreds of oddballs that hate Wal-Mart, I wonder if you have any Kraft Macaroni & Cheese on your shelves. Why? Because you bought it because of advertising. It costs more than the bargain brand, and it's still the same damned powdered cheese. But your folly of eating corporate cheese has now cost 6,000 people their jobs. Oops wait. That's not it exactly..

It's the people who have stopped eating corporate cheese that have cost these people their jobs. Gotcha!

There's really no way out of this. We're all culpable somehow. We've consumed whatever it was that made Kraft bet that it could meet the payroll, and keep operating the factories for these many years. But those days are gone.

In order for the rest of the employees at Kraft to survive the death of the high-carb diet, Kraft is going to have to spend millions to erase the images of crayon drawn cows jumping over the moon from the 'kids' love of Cheese and Macaroni. Paying attention costs.

Posted by mbowen at January 28, 2004 12:14 PM

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why does one have to be an oddball to not like wal-mart? I can't stand that store, feel they sell a significant amount of inferior product and push, not request, their vendors into creating such inferior products, thus causing you to have to go back to buy another one anyway.

Sure, it's capitalism, and sure, they like it that way, and that volume is king in some circles..... But capitalism works both ways. And there's A LOT of folks who don't like wal-mart.

Posted by: djspicerack at January 29, 2004 09:44 AM

Not liking Wal-Mart as a shopper is one thing. Not liking Wal-mart as a political activist is another. It's like not liking GM. You hate it because it symbolizes capitalism. But considering that it is the largest employer of people in the world, you have to hate it in spite of the love it gets from everyone else.

What is startlingly unique about Wal-Mart is that it is driven by commodity pricing of brand name goods. It delivers the lowest prices to the consumer. This is something populists should love, but they are largely stuck in reverse when it comes to the simple word 'profits'. This makes them hypocrites.

But I think hypocrites will be shown the error of their ways and the contradictions in their 'logic', and so the only ones who will continue their farcical crusade against Wal-Mart will be those who are perverse and blind - the very definition of an oddball.

The world loves Wal-Mart, and for good reason. Everyone else is an oddball.BTW. I haven't heard of any Wal-Mart layoffs...

Posted by: Cobb at January 29, 2004 10:06 AM

I think when it comes to foodstuffs, Wal-Mart is a force to be reckoned with.

As "brand names" go, the products they have such as jeans, etc., are clearly second rate, yet have tags from first rate brands. They know they have shoppers in their stores, so now they have them stuck buying 1 gallon jars of pickles and jeans from their favorite maker - one stop shopping at its best.

As a capitalist, I think they are brilliant. As a realist, I don't necessarily like some of their practices. They have some of the same "push" tactics that folks like Microsoft are said to have. The problem is, they buy *so* much product from vendors, you can't not sell to them.

Unfortunately, the "american made" attitude that Sam & Company have tried to push upon us as their branding is not necessarily true anymore, as many of the vendors of Wal-Mart's products have had to go overseas to produce their items.

Posted by: djspicerack at January 29, 2004 12:10 PM