Peanut butter sales rebound after salmonella scandal

Articles
July 06, 2009

Consumers can’t fully discriminate between suppliers and brands in trouble due to contamination recalls (such as Peanut Corp. of America) and those that aren’t. Because chief household shoppers feel unsafe, they largely shut themselves out of a category in their role as protectors of the household pantry—and this unnecessarily hurts food manufacturers and retailers. Until government agencies and the trade do a better job of tightening the safety net around the foods we eat, and communicating rapidly and clearly when contamination events come to light, this problem will persist. Witness the fallout from the Peanut Corp. of America salmonella scandal—the nation’s largest ever—which caused the bottom to drop out of the peanut butter market for a while. Even popular brands that were in no way involved in the contamination got caught up in the emotion of the recall, and sales suffered. Fortunately for the peanut butter category, the nation’s appetite for the stick-to-the-roof-of-your-mouth food never went away. Now come figures that reflect a sales rebound—just months after the PCA event revealed the extent of our nation’s food oversight challenges, and damaged a category that people look to as a source of low-cost protein in this recession. Volume sales of peanut butter rose by 13.5% in April 2009 vs. April 2008, according to Information Resources, Inc. retail scan data from retail outlets including Walmart, most supermarkets, drug stores, and mass market stores. This followed a 5.6% volume rise in March 2009 vs. March 2008.

Consumers can’t fully discriminate between suppliers and brands in trouble due to contamination recalls (such as Peanut Corp. of America) and those that aren’t. Because chief household shoppers feel unsafe, they largely shut themselves out of a category in their role as protectors of the household pantry—and this unnecessarily hurts food manufacturers and retailers.

Until government agencies and the trade do a better job of tightening the safety net around the foods we eat, and communicating rapidly and clearly when contamination events come to light, this problem will persist.

Witness the fallout from the Peanut Corp. of America salmonella scandal—the nation’s largest ever—which caused the bottom to drop out of the peanut butter market for a while. Even popular brands that were in no way involved in the contamination got caught up in the emotion of the recall, and sales suffered.

Fortunately for the peanut butter category, the nation’s appetite for the stick-to-the-roof-of-your-mouth food never went away.  Now come figures that reflect a sales rebound—just months after the PCA event revealed the extent of our nation’s food oversight challenges, and damaged a category that people look to as a source of low-cost protein in this recession.

Volume sales of peanut butter rose by 13.5% in April 2009 vs. April 2008, according to Information Resources, Inc. retail scan data from retail outlets including Walmart, most supermarkets, drug stores, and mass market stores. This followed a 5.6% volume rise in March 2009 vs. March 2008.

Moreover, consumer sentiment is improving toward the category. According to a National Peanut Board survey, its third wave of independent consumer research:
•    People who said that they or someone in their household has stopped eating peanut butter dropped six points to 13%, and those who have resumed eating peanut butter has increased sharply by 43 points to 70%.
•    Awareness of the salmonella outbreak is down 17 points to 78%, and perceptions about the level of severity of the effect of the outbreak have declined significantly since February.

All the deserved headlines at the time of the salmonella outbreak may have led to a perception that peanut butter sources would be scarce following the closure of PCA, but that’s not the case. A source at NPB told us that PCA accounted for less than 3% of the U.S. peanut product supply, and about 1.5% of the U.S. peanut butter supply.  Moreover, coming off of a bumper crop, peanuts in storage nationally are at higher levels than they’ve been in years.  Therefore, brand manufacturers haven’t been reported going outside of their mainstream supply chain to secure peanuts.