The food industry is holding its collective breath as it watches what looks like a repeat of the double-digit inflation of five years ago.
And the industry's image with consumers is none too good either, according to the annual survey conducted for the Food Marketing Institute, an association of the retailers and wholesalers, which met here last week.
The survey was conducted in February, at a time when people still were not particularly concerned about food prices, yet the industry's image was worse than it had been in 2 1/2 years.
Of the 1,000 respondents in the Yankelovitch, Skelly and White report only 34 percent believed supermarkets strike a fair balance between profits and public responsibility. Food manufacturing fared even worse with 79 percent saying they strike a bad balance. What's more, 73 percent of those surveyed think supermarkets make "a lot" of money; only 59 percent thought so a year ago.
These attitudes, the research firm reminded its audience at the annual FMI convention, are ". . . at a time when the general level of concern over the cost of food is going down."
But according to one EMI spokesperson, "The trends are outdated."
Tim Hammonds, FMI's vice-president for research, is worried, too. For the near future he thinks the public can relate high food prices to farm prices because they have been getting a lot of publicity.But he said, "Consumers have short memories. Six months from now . . ."
If the industry is planning any defensive measures, either to help their image or to help shoppers cope, they were not evident at the convention.
While some retailers have egun to offer cheaper alternatives - warehouse or "no-frills" stores and generic or brandles foods - many others appear to be very skeptical of these concepts, judging from the articles and editorials in the trade press. Most supermarket executives feel they have had their hands full in the last couple of years just battling the trend toward eating out.
Stores have increased their selection of ready-to-serve foods, enlarging their bakery and delicatessen departments, offering more hot dishes, sandwiches and chilled drinks, stressing convenience not price. There also has been some promotion of frozen prepared foods as a money-saving alternative to fast food restaurants.
If food prices rise in the supermarket, they also will rise in fast food restaurants. Industry officials are wondering if that will mean even two-income families will have to cut back, not only on eating out but on the kinds of foods they buy for preparation at home.
The same research firm that gave the industry the bad news about its image thinks it knows a way to combat the trend toward eating out. In another study it conducted for Woman's Day, a magazine sold exclusively in supermarkets, there was a strong indication that shoppers don't think they are getting enough value for their money. And by that, Hammonds said, they don't mean price, they mean nutritional value.
"Consumers remain concerned somehow that the food, from a nutritional perspective, it not up to par with the money spent for it . . . despite the fact tha their purchases may not always reflect that awareness."
The results of the nutrition survey, which were also announced at the FMI convention, show that the main concern expressed about food is connected with nutrition - not only the nutrient level of the food but its safety. While the majority of the 1,188 people surveyed are not necessarily rushing headlong to change their eating habits to conform to their concerns, they express a great deal of worry about additives, particularly artificial colors, pesticides, sugar, salt, cholesterol and fiber content.
A majority (50 per cent) would be willing to settle for higher priced food if it meant the food would free of pesticides. Close to half (49 per cent) would accpet less attractive foodif it meant the foods were no longer artificially colored and 42 percent would be willing to have saccharin eliminated even if it meant foods wouldn't taste as good.
If some manufacturers are tying to come to grips with these concerns, industry observers say others simply give lip service by marketing products that appear to be "natural" or "additive free" but aren't. Displays of what someone has called "natural junk food" were plentiful at the FMI convention.
Dozen of new labels trumpeting "no preservatives" are replacing the old ones. Theyare often found on foods which are made with artificial colors and other additives.
Yogurt is not only frozen, colored and flavored, now it can be found as an ingredient in snack chips and in the creme filling of an otherwise ordinary cookie. Gone is yogurt's natural tang and lost is most of its nutritional value.
But these do not appear to be the kinds of food people say they are eating more of, accordingto the survey. Sales of brown rice are up about 20 percent. One company said its whole wheat bread sales jumped 8 percent last year. People are consuming more fuits, vegetables, cheese and chicken while they have cut back on potato, chips and snacks, soft drinks, bacon and frozen dinners.
So far most of the food industry does not seem to have recognized this interest in less processed, more natural foods.
But consumer activists like Ellen Haas, president of Consumer Federation of American, think supermarkets will be promoting nutrition soon just because it's good business. "Do specials only have to be for Pringles, Cokes and cookies at the end of the aisle promotion? What about a nutrition special of the month?" Haas thinks that if supermarkets become identified with nutrition they might get some of their sales back from the fast food restaurants.
The consumer afffairs specialist of one large supermarket chain agreed. "With prices higher, interest increases in getting good nutrition for the food dollar," Mary Ellen Burris of Wegmans Food Markets said. "There will be a shift away from Hamburger Helper-type food."
That remains to be seen. According to Barry Bosworth, director of the President's Council on Wage and Price Stability, food prices "will moderate sharply" in the second half of the year. Bosworth says, "Outside of beef the only real problems are fruits and vegetables and they will be down within the next month because new crops are now being harvested."
Consumers are not the only ones who hope he is right.