Food costs affect kids' lunches
Parents must change buying habits as prices keep rising
Associated Press
Tuesday, September 02, 2008

MILWAUKEE --- Kids might 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 such as home-packed chips rather than prepackaged ones.

This year's lunchroom will be less about convenience and more about the bottom line, said Marcia Mogelonsky, a 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 such as 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 -- such as corn, wheat, soybeans and other items -- are high and eating into food companies' profits. So big names such as 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 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. The prices, for the most part, don't go down.

In Los Altos, Calif., Hollis Bischoff's two children have been packing their own lunches for years. It saves money because they know what they'll eat, she said, and it teaches them a lesson in how to spend and save.

The cost of food is soaring. In the U.S., retail food prices rose an average of 6 percent this year. That's three times the normal inflation rate. Prices are rising because companies are paying more for key ingredients, because of increased demand around the world, the weak U.S. dollar and weather that destroyed crops.

The pinch consumers are feeling is affecting their shopping habits, said Harry Balzer, the 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?"

Retailers are trying to help consumers make these choices at their stores. Wal-Mart Stores Inc. has its "Mealtime Ideas" campaign and upscale grocer Whole Foods Market Inc. has pamphlets of coupons and back-to-school lunch ideas in its stores.

LUNCHTIME WOES

THE ISSUE: Many food items have been shrinking as companies try to make up for higher ingredient costs. The companies also are raising prices, but making products smaller gives them another way to make up the difference. Here's a look at how some big-name products are shrinking:

- In June, Kellogg Co. said it was shrinking, by an average of 2.4 ounces, the packages of 14 items sold under the brands Apple Jacks, Cocoa Krispies, Corn Pops, Froot Loops and Honey Smacks. Rival General Mills Inc. more than a year ago shrank some of its boxes.

- Large jugs by Tropicana are now 89 ounces, down from 96 ounces.

- Some Country Crock tubs are now 45 ounces, down from 48.

- Certain packages of Breyer's and Edy's are now selling in 48 ounce cartons, down from 56 ounces.

THE SOLUTIONS: Here are some things parents and analysts recommend:

- Package your own bags of snacks in baggies or reusable plastic containers rather than buying prepackaged ones.

- Shop around for sales and buy in large quantities when you can.

- Think about lunches when you're making dinners, and set some aside so you have enough for the next day.

- Take a food inventory so you know what you have and can plan around that. And that'll cut down on trips to the store.

- Talk to your kids to see what they really want. If they're not going to eat it, don't give it to them.

- Involve children in the lunch-making process. Analysts say if kids take part in packing their lunches they'll be more apt to eat them.

-- Associated Press

From the Tuesday, September 02, 2008 edition of the Augusta Chronicle
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