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Upscale restaurants and gourmet labels may be hurting these days, but mega-manufacturers with a variety of brands (like Kraft and Nestle), along with club stores like Costco, are benefiting from the recession as at-home dining is on the rise. “It’s not doom and gloom across food markets,” says Bill Patterson, a senior analyst at consumer market research firm Mintel. A look at some winners and losers:
UP Sandwich materials The so-called sweet spreads--jams, jellies and peanut butter--are forecast to grow 26% by 2013, in spite of the peanut-salmonella scare (“That’s largely behind us now,” Patterson says). Peanut butter and jelly sandwiches are perfect for brown bag lunches, and also feed into the need for comfort food in rough times.
DOWN Restaurants The National Restaurant Association predicts an all-over decline of 1%, with fine dining taking the biggest hit. However, the “fast casual” sector, which includes chains like Panera and Subway, is projected to be up by 5% this year.
UP INSTANT FOODS If you can’t cook but need to eat at home to save money, frozen entrees, canned goods, and other easy-to-prepare dishes are convenient and less expensive than dining out. Frozen meals jumped 4.5% last year, and side dishes like beans and mac and cheese grew more than 5%--also attributed to the “comfort food” factor. It hits the spot when people are “feeling at home or feeling miserable,” says Patterson.
DOWN Organic Food The higher-priced organic food market has had growth rate of 15-20% over the past few years, but is predicted to see no growth to a decline of up to 1% this year. However, Patterson thinks it will bounce back by 2010, calling it a “big hiccup” and “temporary blip.”
UP Coffee With more people brewing at home, retail coffee products grew 6% last year.
DOWN Coffee Houses At-home brewing will give the $4 latte a run for its money. (Starbucks, as if planning for just such a cafetastrophe, already introduced a new instant coffee.) Non-coffee shops, likes McDonald’s and Dunkin’ Donuts, will also benefit from selling specialty drinks at much lower price points.
UP Salty Snacks With more people staying at home, hosting at home, and renting DVDs, salty snack consumption was expected to rise 4% last year, but actual figures are coming in closer to 6%.
DOWN Movie Theater Concessions The high markup at the stand means moviegoers are being more sensible and spending less. “People have realized that what they’re paying is so much more than what they’d be paying on the same foods if they didn’t go to the movie theater,” says Patterson.
UP Butter, Margarine, and Oil More home-cooking means more use for basics like shortening, butter and mayo, whether it’s for that sandwich or some homemade cupcakes. The fats and oils are expected to grow almost 4% annually through 2013.
DOWN Bakeries In-store bakeries—ones in supermarkets, Wal-Marts and other places—aren’t projected to post losses, but growth is anticipated to slow to 5% to 6%, compared to the 7% to 8% of past years.