The slight uptick in the economy has yet to reach the grocery aisle, where packaged-food marketers are still dealing with stingy consumers loathe to pay higher prices. But two of the industry’s largest advertisers have no plans to pare marketing budgets in this tough environment, top executives said today at a financial conference.
General Mills and Kraft Foods vowed to continue investing in their brands during presentations today at the annual meeting of the Consumer Analyst Group of New York, which is being held this week in Boca Raton, Fla. The two marketers and other food companies spent much of 2011 raising prices to combat higher commodity costs, or risk losing profits. Analysts expect inflationary pressures to ease in the coming year — which can’t come soon enough for marketers.
Managing "input costs, prices, promotional activity and volume is proving to be as challenging as we expected," said General Mills CEO Ken Powell. The food giant — which markets big brands such as Yoplait, Cheerios and Pillsbury — was forced last week to lower earnings forecasts for its current third quarter. "That said," Mr. Powell noted today, "we generally see our business performing as expected and we intend to maintain the consumer-marketing initiatives we planned for the remainder of this year." Advertising Age – Read more…