Food conglomerate Kraft Heinz took a $15.4 billion write-down in two of its most powerful brands this week, a jarring warning that even the most iconic American names are vulnerable to shifts in consumer tastes.
The hit on the value of the Kraft and Oscar Mayer labels on Thursday highlights the struggles that packaged-food companies face as they try to keep up with evolving palates and the rise of smaller, organic and online competitors. Though Kraft Heinz boasts some of the most distinctly American products — Jell-O, Kool-Aid, Kraft Macaroni & Cheese — nostalgia isn’t enough to guarantee sales in the age of fresh-focused eating.
Consider Kraft Singles. The radiant orange slices have been the gooey glue of American lunches since the 1960s. The founder of Kraft Foods, James L. Kraft, created early versions of “process cheese” with hopes of making a sliced cheese with a longer shelf life. Kraft and researchers found a way to kill off the bacteria that spawns mold, but it took 15 more years of tinkering before their individually wrapped creation hit markets, the New York Times reported. The product was heralded for the ways it sidestepped the failings of other cheese: Slices didn’t dry out or curl up at the ends; they were beloved for their uniformity and convenience.
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