One thing in life is the fact that most brands have a natural life before they go out of fashion. In my 40 years in the food industry I’ve witnessed the rise and fall of many brands. As a boy, I remember visiting my grandmother who drank coffee made with Camp coffee essence. I also remember a powdered drink I loved called Creamola Foam which went out of production in the 1990s.
In my boyhood days I also remember Piccalilli relish, Smash instant mashed potato, Ambrosia creamed rice, Battenberg cakes, Vesta curries and Angel Delight desserts. Not sure if any of these brands survive today but the young of today will never have heard of these brands.
I’ve been following the crisis that has hit Kraft Heinz, the fifth largest food company in the world, when it came into being in 2015 when both companies merged. At the time Warren Buffett of Berkshire Hathaway and Jorge Paulo Lemann of 3G Capital, the key investors, believed that the future would be very profitable but unfortunately their plans have hit a brick wall.
Lemann has a history of slashing costs when 3G buys businesses and in this case, costs were dramatically cut including the marketing budgets that had historically supported key brands. Cutting costs and marketing have accelerated the decline of brands such as Heinz ketchup, Maxwell House coffee and Kraft cheesy pasta.
Both Lemann and Buffett have failed to recognise there is a growing movement amongst younger consumers towards healthier eating and the growth of secondary brands that are much cheaper and just as tasty. The young consumers of today are questioning the relevance of highly processed foods and this is resulting in many switching to more healthy options.
It is a bit early to reach the conclusion that processed foods are about to die but it seems that their heydays have now passed. The birth of processed foods was in 1953 when a company called Swanson had a huge surplus of turkey left over after the Thanksgiving holiday. During a brainstorming session they came up with a stroke of genius and decided to package meals in the same way as the airline industry. The container acted as both baking tray to cook the frozen meals and a plate to use to eat the food. In the first year the company sold over 10 million ‘TV Dinners’.
By the late 1960s and early 1970s frozen food and ready meals took off. This was because most houses before then did not have domestic freezers. This also coincided with the rise of women working and longer working hours.
Time was important and when it came to food convenience became very important.
Frozen foods in the early 1980s lost their shine with consumers demanding freshness. Marks & Spencer was the first to catch on to this change and launched a ready-made Chicken Kiev. It was ground-breaking as it was a move from frozen to fresh chilled. The supply chain improvements and chill chain management advantaged short shelf life chilled foods.
Today, the Kraft Heinz story could be an indication that our obsession with highly processed food is coming to an end.