The food business operates on tight margins, meaning that the difference between the cost of the goods and what it receives from the sale of those goods is small. Still, if a company can sell a lot of product, they can be profitable.
As noted in this report, many of the great American food companies that sold iconic food products are now faced with sluggish sales and sagging profits. This includes Cheerios and other breakfast cereals we grew up eating, Coca Cola, the taste that refreshes, and Kraft Mac and Cheese. You might remember that the manufacturer of Twinkies even went bankrupt a few years ago.
Business experts have suggested that Millennials simply do not share the same brand loyalty as their parents and grandparents, at least for food. iPhones are another story.
Nonetheless, this may explain why small food brands, especially those for natural, organic or healthy products are so popular among Millennials. We will discuss how U.S. food companies are addressing this challenge.
By the way, the “not your fathers …” meme came from a car advertisement from the late 1980’s. General Motors was trying to revive sales of its Oldsmobile brand that younger consumers associated with their father’s not very cool car. Did it work? Do you see many Oldsmobiles on the road?