NEW YORK, April 8 (Reuters) – Americans relying on government benefits to buy food and other essentials are slashing spending, prompting food makers like Kraft-Heinz (KHC.O), opens new tab and Conagra Brands (CAG.N), opens new tab to overhaul their products and strategies following years of price hikes.
Many of the biggest makers of packaged foods and drinks are seeing their sales volumes fall, due partly to low-income consumers — typically making roughly less than $35,000 per year — cooking from scratch, using up leftovers or just buying less.
Roughly one-third of Black American households and 21% of white American households fell into this category in 2022, according to the latest available U.S. census data.
“We expect reduced SNAP [food stamp] benefits will be a headwind,” Dollar Tree (DLTR.O), opens new tab CEO Richard Dreiling said during a March 13 earnings call. Dreiling was referring to the U.S. government’s supplemental nutrition assistance program (SNAP), which provides benefits to low-income families to help them afford groceries.