Velveeta etc. Isn’t Worth What It Used to Be
Velveeta ain’t what it used to be. That’s because consumers now don’t want ultra-processed food. Thus, 474 million dollars just disappeared from the balance sheet of Kraft Heinz. It’s all about the fading, intangible goodwill value of processed food brands.
Serious Financial Pressure for “Big Food”
Food marketing is all about building goodwill for brands that consumers trust. But with all the bad press for processed foods, consumers don’t trust brands like Velveeta, Cool Whip, and Miracle Whip as much as they once did. Assessing the value of these brands is not a precise science. Nonetheless, sometimes the gap between what’s on the balance sheet and reality in the marketplace becomes impossible to deny.
That’s what happened on Thursday when Kraft Heinz took hundreds of millions of dollars off its balance sheet for those old mega-brands. Stock in the company took a dive, too. It dropped by 13 percent on Thursday – and another six percent on Friday. Ouch.
Prompting Big Changes
What this means is big changes for Big Food. Crusaders are calling for a “revolution,” not just fine tuning in the food system. Taxes on ultra-processed foods threaten to kick the industry while it’s down. Entrepreneurs are coming in with new thinking about plant-based foods and brands that can claim minimal processing for a health halo.
Sometimes that halo doesn’t stand up to scrutiny. But marketers won’t care, just so long as it’s enough to get attention and build a new brand. Case in point: all the buzz around fake meat. It’s highly processed, but it’s fitting in with the plant-based diet cause. Whatever.
Much work remains to figure out a sustainable and healthy global food system. We have lots of speculation and not so much solid evidence. With both planetary and human health at stake, don’t doubt that it will continue to get a lot of attention.
Click here for more on the problems at Kraft Heinz.
1972 Velveeta Ad, illustration from Classic Film / flickr
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August 10, 2019
August 10, 2019 at 12:30 pm, Mary-Jo said:
It is great to see companies innovating to produce less plasticized versions of packaged foods, but I have often noticed many items are still calorically dense, often high in added sugars and fats, and there’s no use fooling ourselves that we will get, stay, or be ‘healthier’ if we eat these, not those. It would be helpful to, somehow, get people to eat less carbon-intense meats like lamb and beef for a year or two — maybe rationing these items in major consuming countries, where people eat too much meat — and then measure the effects to see if it made a difference. Idk, just trying to think of solutions.