Food Business News - Nov 25, 2008 - (Page 1)

FoodBusinessNews ® NEWS, MARKETS AND ANALYSIS FOR THE FOOD PROCESSING INDUSTRY November 25, 2008 Demand drop fuels historic crude oil price decline Lance stalks Archway assets Global economic crisis may push fuel prices lower 11 1 41 Soup's on S 48 MARKET WATCH KANSAS CITY - The precipitous drop of nearly 65% (West Texas Intermediate) in crude oil futures prices since early July has been $150 as jarring as the run-up in prices to record highs, but $120 it also has left the impression that volatility in the $90 oil market may be here for the foreseeable future $60 with demand as a principle swing factor. $30 Jan. Feb. March April May June July Aug. Sept. Oct. Nov. "It's all about demand," 2008 said Amanda KurzendoSource: Energy Information Administration erfer, commodity analyst with Summit Energy, Louisville, Ky. "De- prices as crude oil futures plunged more mand in the United States is the weakest than $95 a barrel from the July 11 record it has been since 1980." high of $147.27 to below $50 last week. Businesses and consumers alike welU.S. average retail diesel prices dropped Continued on Page 30 comed the break in diesel fuel and gasoline Crude oil per barrel Functional effects beyond nutrition Thanksgiving dinner cost 12 traditional items 2008 2007 2003 1998 1988 $44.61 $42.26 $36.28 $33.09 $26.61 Don't pay for delivery, just open the freezer Frozen pizza gets a boost from more budget-conscious consumers Source: American Farm Bureau Federation Cost of dinner forr 10 0 is up 6% from 2007 and 23% from 2003. With Domino's now set up to take orders through TiVo and Pizza Hut accepting orders via Facebook, food service operators in the pizza segment keep making it easier for consumers to order delivery. But according to Mintel International, Chicago, there has still been minimal growth in the pizza restaurant category, and makers of frozen pizza increasingly are comparing the value and quality of their products to those in food service. "Consumers are turning to frozen pizza as they continue to feel the effects of the slower economy and look for value-priced at-home solutions for meals and snacks," said Dan Hammer, senior vice-president of marketing for Schwan's Consumer Brands North America. "As a result, research shows the weak economy is taking a bite out of consumers' wallets and has significantly decreased traffic to quick-serve Continued on Page 35

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Food Business News - Nov 25, 2008