In a Bad Economy, People Eat Less Crappy Food

Doesn't this soup look tasty?

With the help of Zachary Cohen's Farm to Table blog, I recently found an interesting article in the Wall Street Journal about how big food companies are going after the current sales slump. It seems that when people have less money, they're less apt to spend it on crappy food, fake food, "edible food-like substances", sponges disguised as food, etc. Here's an excerpt from the Campbell's Soup part of the article:

Campbell has experience with downturns. The company advertised heavily during the early years of the Great Depression, sponsoring radio programs with its "M'm! M'm! Good!" jingle. Soup demand was so high that the company had to build a new plant in Chicago in 1930. Today, Campbell's soup remains one of the best-known and least-expensive meal items in the grocery store. Unlike many other products, it faces little threat from cheaper, private-label brands.

Yet the going has been tougher in this economic cycle, thanks to increased competition from other food products and the intensity of the recession. Campbell surprised Wall Street by announcing that profits in the second quarter ended Feb. 1 fell 15% from a year earlier, partly because some supermarkets had reduced inventories to cut costs. The volume of canned soup sold by retailers including Wal-Mart Stores Inc. was flat in 2008, according to Nielsen Co. data provided by Bernstein Research. Some analysts attribute that to a combination of higher prices, warmer weather in some areas and consumers emptying out their pantries.

I included this last part - about genius analysts attributing the decline in sales to warmer weather (as in, "global warming is killing the soup business!") because I don't think it makes any sense. The organic food market continues to grow, albeit at a slower rate than in recent years. cambellsMore and more farms are starting CSA programs, and farmers markets are growing in size and number. And new companies selling local, artisan foods like Foodzie claim to be unaffected by the economic downturn. Maybe, just maybe, in times like these, there's a group of people who will spend their money more wisely, on real food that keeps them full and healthy. Maybe these people are more likely to cook a meal made from real foods than they are to go out to dinner each Friday night.

Clearly when people have less, they spend less. But the analyst's view - particularly at Campbell's outrageously low price points - that the weather is the blame, strikes me as insincere and silly. My own theory is that normal people are starting to calculate the true cost of a 50 cent can of soup, and starting to make educated choices. And really, my theory is just as good as the one about the weather, don't you think?