The Rise And Fall Of America's Favorite Junk Foods | Rise and Fall | Insider Business
TLDRThis script explores the rise and fall of iconic American food brands like Kraft cheese, Jello, and Twinkies. It delves into Kraft's dominance in the cheese market, its innovative processed cheese, and challenges due to health concerns. Jello's journey from a status symbol to a staple dessert and subsequent decline is highlighted, along with Twinkies' cultural impact, near-demise, and revival. The narrative captures the evolution of consumer tastes, the importance of adapting to health trends, and the resilience of these brands amidst economic and cultural shifts.
Takeaways
- 🧀 Kraft cheese was once an American staple, controlling 40% of the US cheese market with its processed cheese products.
- 🔥 The popularity of Kraft's processed cheese soared during World War I and II due to its non-perishable nature and was a significant supplier to the US military.
- 📈 Kraft's success continued into the 20th century with innovations like sliced cheese and individually wrapped cheese slices, boosting their sales significantly.
- 🍰 Kraft's macaroni and cheese became a hit during the Great Depression, providing an affordable meal option for families.
- 📉 In the late 2000s, Kraft faced challenges as consumers became more health-conscious and concerned about the ingredients in processed foods.
- 🚫 The FDA accused Kraft of violating labeling standards in 2002, leading to a rebranding of their cheese products.
- 📉 Kraft's market value declined significantly by 2018, with the brand portfolio losing $15.4 billion and the Kraft brand itself accounting for a loss of $4.1 billion.
- 🍰 Jell-O was once a status symbol and later became a beloved dessert in American households, popularized through strategic marketing and advertising.
- 📉 Jell-O sales declined as it was perceived as cheap and artificial, with its association with wartime rations and low-fat diet trends negatively impacting its image.
- 🎨 In an attempt to revitalize the brand, Kraft Heinz rebranded Jell-O in 2023 with a modern design to attract a younger audience.
- 🥞 Twinkies, an American icon, almost disappeared after Hostess Brands filed for bankruptcy twice, leading to factory shutdowns and job losses.
- 🔄 After the second bankruptcy, investors Andy and Dean Metropoulos purchased Hostess Brands, restructured the company, and successfully relaunched Twinkies in 2013.
- 📈 The relaunch of Twinkies was met with a viral response, and the company quickly regained its market presence, leading to a successful IPO in 2016.
- 💰 In 2023, the Smucker's Company acquired Hostess Brands for $5.6 billion, indicating the enduring appeal of Twinkies and the company's recovery from bankruptcy.
Q & A
What was the original purpose of Kraft's processed cheese invention?
-Kraft's processed cheese was invented to create a longer-lasting product with a consistent taste from leftover scraps of cheddar cheese. This was achieved by heating the cheddar with an emulsifier, resulting in a smooth cheese with a much longer shelf life.
How did Kraft cheese support the US military during World War I?
-During World War I, Kraft supplied the US military with 6 million pounds of cheese, with over a pound and a half per soldier, as it was a non-perishable food that could be easily transported and consumed by troops.
What was Kraft's strategy during the Great Depression that led to a significant increase in sales?
-Kraft introduced macaroni and cheese dinners, which were affordable and could feed a family of four for only 19 cents, or roughly $3.50 today. This product was an instant hit, selling 8 million boxes in the first year.
Why did Kraft's market share decline in the early 21st century?
-Kraft's market share declined due to a cultural awakening where consumers became more aware of the potential negative health impacts of ultra-processed foods. This led to a shift towards healthier eating options and concerns about the ingredients used in Kraft products.
What was the impact of the FDA's accusation against Kraft in 2002 regarding its labeling standards?
-The FDA accused Kraft of violating labeling standards by using milk protein concentrate in its singles, which was not allowed in products labeled as pasteurized processed cheese food. Kraft responded by relabling its singles as pasteurized prepared cheese product.
How did Jell-O become a popular dessert in the United States?
-Jell-O became popular through strategic advertising campaigns, recipe books that showed various ways to serve it, and endorsements from artists like Norman Rockwell. It was also promoted as an affordable food option during the Great Depression and as a convenient food during World War II.
What factors contributed to the decline in Jell-O sales after its peak in the 1960s?
-The decline in Jell-O sales was due to changing consumer tastes, the perception of cheapness, association with wartime rations, and a shift towards healthier and more natural food options.
What was the significance of Twinkies in American culture, and how did they become an icon?
-Twinkies became an American icon due to their widespread marketing to children, their presence in lunchboxes across America, and their status as an affordable indulgence for families. They were also helped by the introduction of the mascot Twinkie the Kid.
How did Hostess Brands handle the challenges that led to their bankruptcy in 2012?
-Hostess Brands faced challenges such as high costs for pensions and raw goods, inefficient factories, and a direct store delivery model that was expensive. The company filed for Chapter 11 bankruptcy and eventually was bought by Apollo and Metropoulos, who restructured the company, improved factory efficiency, and innovated the product line.
What changes did the new owners of Hostess Brands implement to revive the company after the second bankruptcy?
-The new owners, Apollo and Metropoulos, tackled the delivery system by switching to a distribution to warehouse model, increased the shelf life of Twinkies to make them suitable for warehouse storage, improved factory efficiency, and innovated the product line to embrace the indulgence aspect of the brand.
How did the coronavirus pandemic affect the sales of Kraft, Jell-O, and Hostess Brands?
-The pandemic led to an increase in sales for these brands as consumers stocked up on non-perishable goods and processed foods. Kraft's macaroni and cheese sales were up 27% during the first quarter of 2020 compared to the same period in 2019. Hostess Brands' net revenue reached a billion dollars by the end of 2020.
Outlines
🧀 The Rise and Challenge of Kraft Cheese
This paragraph discusses the history and evolution of Kraft cheese in the American market. Starting from Kraft's invention of processed cheese in 1903, the brand grew to dominate the market with its consistent taste and longer shelf life, especially during World War I. Kraft's clever marketing, such as introducing macaroni and cheese during the Great Depression and sliced cheese in the 1950s, significantly boosted sales. However, by the late 2000s, health concerns and a cultural shift towards healthier eating options began to impact Kraft's sales. Despite efforts to adapt, such as removing trans fats and artificial dyes, Kraft faced challenges as consumers became more aware of the health implications of ultra-processed foods.
🍮 Jello's Journey from Delicacy to Decline
The second paragraph outlines the transformation of Jello from a luxury item to a staple in American households and eventually to a product facing a decline in popularity. Initially a status symbol in the Middle Ages, Jello's accessibility increased with Pearle Wait's invention of an instant gelatin product in the late 1800s. Through strategic marketing, including recipe books and Norman Rockwell's advertisements, Jello became a household name. However, its reputation suffered as it was seen as cheap and associated with wartime rations. Attempts to rebrand Jello as a diet food and to leverage its family-friendly image during economic downturns were not enough to stop the decline in sales. Despite these challenges, Jello maintains a presence in certain regions, like the 'Jello belt' around Salt Lake City, and attempts to engage consumers through social media.
🍰 Twinkies: The Cultural Icon's Near-Extinction and Revival
This paragraph tells the story of Twinkies, an American icon that faced near extinction due to bankruptcy and changing consumer tastes. Invented in 1930 during the Great Depression, Twinkies quickly became a popular, affordable treat in the United States. The brand's marketing, often targeting children, helped cement its cultural status. However, health concerns and the rise of diets like Atkins led to a decline in sales. Financial troubles, including pension and raw material costs, further strained the parent company, Hostess. After two bankruptcies and a brief disappearance from shelves, Twinkies were saved by investors who saw value in the brand's nostalgia. They restructured the company, improved production efficiency, and extended the product's shelf life, leading to a successful relaunch and a return to profitability.
📈 Hostess Brands' Financial Recovery and Acquisition
The final paragraph details Hostess Brands' remarkable recovery and eventual acquisition by Smuckers. After the revival of Twinkies, the company saw a significant increase in production and profitability, with Twinkies making up 80% of the product output. The COVID-19 pandemic further boosted sales as consumers stocked up on processed foods. This led to the company going public in 2016, with an IPO valuing Hostess at $2.3 billion. By 2020, Hostess' net revenue had reached a billion dollars. In 2023, the company was acquired by Smuckers for $5.6 billion, marking a successful turnaround from the brink of extinction.
Mindmap
Keywords
💡Craft Cheese
💡Macaroni and Cheese
💡Processed Cheese
💡Health Consciousness
💡Food Safety
💡Ultra-Processed Foods
💡Jello
💡Twinkies
💡Bankruptcy
💡Health Revolution
💡Rebranding
Highlights
Craft cheese once controlled 40% of the US cheese market.
The origin of processed cheese began with James L. Kraft in 1903.
Craft's invention of American cheese provided a longer shelf life and consistent taste.
Craft's processed cheese was crucial during World War I, supplying over 6 million pounds to the US military.
Craft's success grew through acquisitions and mergers, like the vitaa cheese company and Fenix Cheese Company.
Craft's macaroni and cheese became popular during the Great Depression due to its affordability.
Craft introduced sliced processed cheese in 1950, revolutionizing the way cheese was consumed.
By 1980, Americans were consuming over 17 pounds of cheese per capita, more than twice as much as in 1950.
Craft controlled over 50% of the processed cheese market by the mid-90s.
Craft Foods' IPO in 2001 was the second largest in US history.
Craft faced challenges with consumer concerns over the health impacts of ultra-processed foods.
A 2013 petition to remove artificial dyes from Kraft macaroni and cheese gained significant support.
Craft Heinz's brand portfolio market value declined by $15.4 billion in 2018.
Craft's products saw increased demand during the 2020 pandemic as consumers stocked up on non-perishable goods.
Jello was once a status symbol in the Middle Ages, served to European royalty.
Jello's success came from strategic advertising campaigns and recipe books.
The Great Depression saw Jello promoted as an affordable food option.
Jello sales began to decline in the 1970s as its reputation as a cheap, diet food diminished its appeal.
Twinkies were invented in 1930 as a way to utilize unused Strawberry Shortcake equipment.
Hostess Brands, the maker of Twinkies, filed for bankruptcy twice, leading to a temporary discontinuation of Twinkies.
Investors Andy and Dean Metropoulos purchased Hostess Brands out of bankruptcy for $410 million.
Hostess was able to increase Twinkies' shelf life to 65 days, allowing for a new warehouse delivery model.
The return of Twinkies in 2013 was met with significant consumer excitement and sales.
Hostess Brands went public in 2016, and by 2023, Smuckers acquired the company for $5.6 billion.
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