Kids may be worried about homework, teachers and that pesky bully this school year. But parents? They’re leery about lunches.
With food prices rising and packages shrinking, parents are wondering how they’ll stretch their food budgets. Children are going to get an unwitting lesson in economics, analysts say, as parents change their food-buying habits to keep costs down.
Some kids will eat more hot lunches this year. Some will carry baggies full of snacks like home-packed chips and crackers rather than prepackaged ones.
This year’s lunchroom will be less about convenience and more about the bottom line, said Marcia Mogelonsky, senior research analyst with Mintel International in Chicago. Parents will be shopping for deals but still wanting all the basics — fruits, veggies, proteins and fun things like chips and cookies. It won’t be easy, she said.
“Parents are sort of entering this with trepidation,” she said. “It’s not how much it costs. It’s how much more it costs relative to what they’re used to spending.”
The costs for key ingredients — like corn, wheat, soybeans and other items — are high and eating into food companies’ profits. So big names like Kraft Foods Inc., Sara Lee Corp. and Hormel Foods Corp. are passing along price increases as they try to keep making money.
Some companies are also shrinking products or getting rid of certain lines to lower their costs. Skippy peanut butter, made by Unilever, now sells in 16.3-ounce jars that look the same size as the previous 18-ounce jars because of a larger indentation at the bottom. Kraft is reducing the number and in some cases the size, of items in its Deli Selects cheese line, for example. Sara Lee has reduced the size of some of its Hillshire Farm deli meat packages from 10 ounces to 9 ounces. The prices, for the most part, don’t go down.
Some grocery stores — like Earth City-based chain Save-A-Lot — are advising parents on what to buy. The chain, which targets bargain shoppers, has a new campaign telling parents how to make meals like turkey slices wrapped in tortillas that cost about a $1 a serving.
“Everybody’s trying to pinch their pennies. They’re all struggling to allocate their food dollars,” said Bill Shaner, chief executive of the chain, a division of Supervalu Inc.
The company got meal ideas from its own workers. They’re worried about costs just like everyone else.
Save-A-Lot, which has 1,200 discount-oriented grocery stores in about 40 states, is extending its “Fuel Your Family” campaign in the next few weeks, using ads and signs in stores to help parents find meals they can make for about $1 a serving, typically using the company’s exclusive lines of products.
Meals — devised with a family of four in mind — include a grilled cheese sandwich and soup lunch that’s 94 cents per serving, tuna pot pie for 74 cents per serving, and turkey bologna on wheat sandwiches with grapes for 86 cents a serving.
The pinch consumers are feeling is affecting their shopping habits, said Harry Balzer, vice president of consumer research firm NPD Group and an expert on American eating patterns.
“These rising food costs have to be paid for by somebody,” he said. “The question is how are you going to pay for them? Are you going to pay for them in keeping your out-of-pocket cost constant by buying smaller portions, or are you going to be paying more for what you paid last year?”
People typically spend 10 percent of their income on food, and that won’t change, he said, so instead they’re looking for deals, eating less or changing brands.
Mogelonsky said many parents will have to put more thought into what they’re giving their kids. Lots of changes will be in the snack realm, she said, because people are more price-sensitive for snack foods.
One way many parents will save is to stop buying prepackaged snacks, especially the 100-calorie ones that hit the market a few years ago, Mogelonsky said.
Kids should probably expect to see fewer treats this year, as well, she said, since that will be seen as a luxury. Parents will have to talk to them about what they want to eat and why — and explain why those cookies may be gone this year.
“It’s a good time to teach economics, nutrition and budgeting,” Mogelonsky said. “It could become a major focus in parent-child relations, making lunches.”
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