With the economic recession more people have started fixing meals at home, instead of going out for meals like they may have a couple of years ago. So many businesses are suffering because of people spending less money, but if people are eating out more doesn't that mean they are buying more sliced bread, cheese, and sandwich meat?
Kraft is one of the world’s leading food and beverage companies with such well-known and established brands as Philadelphia cream cheese, Oscar Mayer, Post cereals, Nabisco, and Kraft.
In a way my assumption above was correct.
With concerns about the global economy’s near term health - analysts are looking at companies that may benefit from the prevailing economic conditions. Kraft (KFT) is seen as one of the companies that could benefit.
Obviously I am not the first person to ever think of this. Almost every child seems to put Kraft singles on their grilled cheeses, and ham and cheese sandwiches. It would be hard to find a kid that didn't know all the words to the Oscar Meyer bologna song. And when the recession made its first big hit, Kraft seemed to be untouchable.
When a recession starts, food companies such as Heinz (HNZ) and Kraft Foods (KFT) benefit from people eating more meals at home.
The economy dips all the time, and people believed this one would be no different. After a year of increasing unemployment rates, and sliding stocks even Kraft began to suffer.
If the recession deepens enough, the advantage vanishes. Shoppers trade down from brand names.
Even Kraft isn't untouchable.