It’s been another week of unexpected, and – on the whole – disappointing business news from the Foodsphere. More major players in all niches reporting ‘disappointing’ fiscal results for Q1 – 2025. And more than one considering ‘desperate measures’…
K/H has been testing the expansion potential of closely related, trendy categories,
taking key brands such as Philadelphia into cream cheese frosting and
Crystal Light into the alcohol space with a hard seltzer line.
We’ve seen mighty powers and high-profile names in the Greater Food Sector report ‘disappointing financial news’, ‘missed predictions’, and just generally ‘flat’ or ‘declining’ revenues and/or profits. And for some, it’s just the latest in a string of losing quarters.
‘Sheltering in place’
McDonald’s says it’s closing down its much-hyped CosMc’s Restaurant of the Future ‘pilot program’. The stated reason for the unexpected move is that the program took far less time to yield the desired results: pointing to a way forward into the climate-change-flamed future.
But reading between the lines, it sounds more like McD’s brain trust realized its whole ‘store of the future’ concept – smaller building footprint, greater emphases on drive-thru, takeout and delivery, reducing human staff while increasing AI and robotics – was either before it’s time or just not working.
And the decision was made to give the entire episode a huge ‘spin’ – out the door.
Meanwhile…
Later in the month, we wondered aloud whether the supposedly unstoppable Fast Food Industry has finally met an immovable economy?
A check with Starbucks revealed that its new, high-flying, troubleshooting CEO Brian Niccol, has been circling the field on the premium coffee purveyor’s much-hyped brand revamp – fighting a potentially losing battle against the brand’s deeply dug-in, fancy-bev-loving Old Guard.
Beyond Meat has similarly been forced to take desperate measures to stay afloat in a plant-based sector, “obscured in doubt.”
Now, it’s condiment king Kraft/Heinz…
Now… We hear that Kraft/Heinz is, “exploring strategic transactions as sales decline.“ K/H told shareholders during its Q1 2025 sales call, its sales had slumped for a 6th straight quarter, in line with amended predictions announced earlier.
K/H has been testing the expansion potential of closely related, trendy categories, taking some of its key brands such as Philadelphia into cream cheese frosting, and Crystal Light into the alcohol space with a hard seltzer line.
Among moves rumoured to be under discussion at K/H previously was selling off its coffee and meats lines, which include brands such as Maxwell House and Oscar Mayer. They ARE making money, but are not considered part of the company’s overall core portfolio.
However… There’s been no talk of mergers or wholesale restructuring at K/H – yet…
My take
I don’t think ‘chaos’ is too harsh a word to use to describe the overall situation in the food sector these days.
Industry corner stones such as Kraft/Heinz and brave new brands such as Beyond Meats, alike, are finding themselves painted into fiscal ‘corners’ with little or no idea how to get out. They have no ‘escape’ plans because they never thought they would need them. And never bothered to sit down and formulate any.
High courts have declared US President Donald Trump’s entire mega-tariffs movement illegal – and ordered him to shut it down. But even that, alone, would not fix the overall problem. The US economy is like a flaming delivery truck, and the tariffs are like a mob of psychiatric hospital escapees trying their hardest to push it off a cliff.
The real story, here, is how the truck ended up at the edge of the cliff in the first place, and who struck the match…
~ Maggie J.