【Epoch Times, November 27, 2024】Kraft Foods’ macaroni and cheese was once a top choice for American consumers. It used to dominate the shelves in various stores across the country. However, a shift in consumer preferences is now underway.
At Target in Chicago, the newly launched premium brand Goodles, which touts high protein content, is priced at over twice that of Kraft, and the products are flying off the shelves. Additionally, Target’s own brand, Market Pantry, is also selling well at one-third of the price of Kraft.
According to Bloomberg, 22-year-old Kaitlin Collins enjoys Goodles products, finding them delicious and emphasizing the importance of eating healthily. She believes that investing in health is worth the cost.
It’s not just macaroni and cheese; today’s customers are increasingly prioritizing product quality, leading to growth in sales of various premium products. On the other hand, consumers are showing a preference for cheaper store brands like Kirkland at Costco and Market Pantry at Target. The mid-range products in between are more expensive and may not offer better quality, resulting in a lower value for the price.
Data from Nielsen IQ reveals that from July 2023 to 2024, Kraft Heinz Co.’s brand sales have dropped by 6%. Similarly, box macaroni and cheese from Velveeta under Kraft and Stouffer’s under Nestlé, both of which belong to Kraft, have seen declines. In contrast, store brand box macaroni and cheese sales have grown by 6%, with Goodles sales doubling.
The main reason behind this shift is inflation.
Chris Costagli, director of the food analysis division at Nielsen IQ, explains that price hikes for mid-range products have surpassed those of both high-end and low-end items.
While high-income individuals might not be greatly affected, those with lower incomes are feeling the pinch of rising prices, leading them to be more budget-conscious. This price increase is causing some consumers to step back.
Nicola Wheir, a freelancer, mentioned how she downgraded her consumption habits after her husband quit his job to return to school last year. She now opts for similar products from Kirkland and Target’s Market Pantry instead of favorites like San Pellegrino mineral water and Charmin chocolates.
Wheir expressed satisfaction with the quality of these store-brand products. However, she still splurges on things she truly enjoys, such as $45 Aesop body wash and $15 garlic sauce.
In recent years, some retail giants in the US have been focusing on improving the quality of their own brand products, including Amazon, Walmart, and Target.
This year, Target revamped about 40% of its Up&Up series based on customer feedback, including baby products, food bags, and wet wipes.
Walmart rolled out a new series called Bettergoods this spring, featuring pure water from the Alps, plant-based macaroni and cheese, and pizza made with cheese.
This new wave of intense competition is indeed putting pressure on longstanding products. For instance, Luvs diapers, a product of Procter & Gamble, saw a 50% decrease in market share from 2019 to 2023.
Andre Schulten, CFO of Procter & Gamble, explained that customers are abandoning Luvs diapers because they don’t see the value in them. When stores like Costco (or Walmart or Target) offer products of the same quality or even better at lower prices, why spend more on Luvs?
Procter & Gamble has taken two approaches to address this. In July, they launched the “Platinum Enhanced” Luvs diapers, which are hypoallergenic and boast a luxurious soft experience. The new Luvs version is slightly more expensive per diaper than the old box.
Furthermore, Procter & Gamble is placing a greater emphasis on its brand Pampers, particularly the more specialized Swaddlers and Cruisers 360 models. Although these are pricier per pack than Luvs, they are selling better.
(Credit: This article referenced reporting by Bloomberg.)