Wal-Mart is partnering with Feeding America, the largest charitable hunger-relief organization in the United States, to provide 70 million meals annually to families and individuals who are struggling to put food on the table during the toughest economic downturn in decades.

The move from the world’s largest retailer comes as U.S. food banks are seeing donations fall short of demand.

Wal-Mart has committed to providing an estimated 90 million pounds of food annually - the equivalent of 70 million meals - to families in need by the end of 2009. It is also making a $2.5 million cash donation that has been earmarked to upgrade warehouses and to buy 20 new refrigerated trucks to transport food from Wal-Mart stores to food pantries, soup kitchens and other agencies affiliated with Feeding America, formerly named America’s Second Harvest.

“Given the current state of the economy and the increased burden on neighborhood food pantries and soup kitchens, we are enlisting our entire network of stores and clubs to participate in this food donation program to provide relief to communities throughout the country,” said Bill Simon, chief operating officer of Wal-Mart U.S.

“Today, with the help of Wal-Mart, we take a huge step forward in helping feed the millions of Americans who live at risk of hunger,” said Vicki Escarra, president and chief executive officer of Feeding America.

In a recent survey, 99 percent of Feeding America’s food banks said demand for food in communities across the U.S. has risen by 15 to 20 percent over the last year alone. Many food banks have reported even higher increases in demand - some with requests for food growing by 50 percent in the last year.

Feeding America’s major donors include Wal-Mart, Kraft Foods, Campbell’s Soup Co, ConAgra Foods, and Kroger.

Check Out the joy at Kraft and Kellogg.

Both Kraft, the largest North American food maker and Kellogg, the world’s largest cereal company, posted third-quarter profits that topped Wall Street’s expectations thanks to price increases and new items. The results are yet another nod to the fact that while you may shun clothes, jewelry or furniture during crunch times, you still gotta eat.

But Chief Executive Irene Rosenfeld of Kraft, with brands from its namesake cheese and Maxwell House coffee to Oreo cookies and Toblerone chocolates, warned that tight credit conditions could cause some retailers to liquidate their inventories, which could affect product shipments in the fourth quarter.

Still, the company stood by its forecast for 2008 earnings before some one-time items and for 2009 net income.

For its part, Kellogg, which makes Rice Krispies and Pop-Tarts, said it was confident about touching the high end of its 2008 per-share earnings target.

Other companies in the consumer and retail world that also revealed quarterly results on Wednesday include Procter & Gamble, Jones Apparel, Williams-Sonoma, and Office Depot.

Also in the basket:

Procter & Gamble quarterly profit rises 9 percent

Office Depot posts third-quarter loss

Williams-Sonoma slashes fiscal year outlook

Jones Apparel profit tops view by a penny

FInancial crisis heralds era of “new seriousness”

Retailers grow anxious in Silicon Valley - WWD (subscription needed)

(Photo/Reuters)

Check out Kraft’s new international strategy.
 
Sanjay Khosla, the president of Kraft International, gave Reuters a sneak preview of the strategy, which is being unveiled today at an analyst conference.
 
The focus is on 10 countries or regions: Brazil, China, Russia, southeast Asia, Germany, Australia, the United Kingdom, Italy, France and Germany.
 
The focus is also on 10 brands, including some expected ones, like Oreos, and some that could be surprising to U.S. consumers: Tang and Philadelphia. The breakfast drink and the cream cheese are big brands overseas.
 
Khosla, a former Unilever executive, was hired by Kraft in 2007 to boost a flagging international business. Month later, the company acquired Danone’s cookie and cracker business.
 
Khosla stressed that Kraft is not forcing its practices on the Danone business, but taking the best of both companies.
 
“We don’t Kraftize Danone and we don’t Danonize Kraft.”
 
Kraft is also allowing its local managers more freedom to make decisions based on local tastes, at least within reason, Khosla said.
 
“What you can’t do is come up with a pink Oreo,” he said.
 
Also in the basket:
 
Coca-Cola buys Chinese juice maker for $2.5 billion
 
Wal-Mart upbeat on Asia drive amid U.S. woes

J.C.  Penney, Kohl’s August same-store sales fall

(Reuters phtoto)

Wal-Mart has been cutting prices ahead of key events this past year, like Black Friday, Christmas and the Super Bowl, to drive shoppers into its stores.

Now the world’s largest retailer is cutting prices on baked beans, barbecue sauce and patio furniture, betting the big event in many shoppers lives this summer will be a “staycation” — a vacation basically spent at home.

“With gas prices climbing 21 percent and airline costs rising 10 percent since last year, families may be skipping longer summer vacations in favor of ’staycations’ — time off spent near home,” the retailer said in a press release.

So the discounter has reduced prices on items for the patio, the backyard, the cookout, and at-home entertainment.

Wal-Mart is selling 4 cans of Bush’s Baked Beans for $5 — a savings of 20 percent, and Kraft BBQ Sauce for $1.18 — 25 percent off, it said.

It is also offering a five-piece Bali Island patio set for $400, a markdown of 20 percent, and a Sanyo 50 inch plasma TV for $998 — a 22 percent savings.

Here’s to a long, hot summer. 

(Photo: Reuters)

Check out soft-drink makers offering a smaller gulp.
 
Beverage Digest reported last week and the Wall Street Journal reported today that Coke and Pepsi bottlers are testing new bottle sizes in convenience stores to try to boost soda sales. (Both links need subscription to see the full story)
 
Both bottling systems have tests of 16-ounce and 12-ounce bottles, being sold alongside the familiar 20-ounce bottle.
 
One reason for the test is to get the price of a bottle back below $1.00. “The price points have gotten too high,” one Pepsi bottler told Beverage Digest.
 
Some consumers also think a 20-ounce bottle is too large, Beverage Digest said.
 
A Coke spokesman told the Wall Street Journal that the the test is part of a broader plan to increase soda sales by improving packaging.
 
Package improvements have become all the rage in the consumer products industry, as a combination of economic and environmental concerns have caused companies to rethink how they package their products.
 
Kraft Foods, for example, has revamped some of the packaging for products, including mayonnaise, making the design more attractive and also using less material, which makes the package lighter and less expensive to ship.
 
But back to soft drinks. If you are still really thirsty, take heart. Coke bottlers are also testing a 24-ounce bottle in some markets, according to Beverage Digest.
 
Also in the basket:
 
Linens ‘n Things files for bankruptcy
 
Walgreen April sales hit by early Easter
 
Big retailers scaling back expansion plans and shutting stores (N.Y. Times)

Check out consumer product powerhouses including Procter & Gamble, Kraft and Colgate, inundating Wall Street with quarterly reports on Wednesday.

The reports largely showed that the companies are finding successful ways to navigate the consumer spending slowdown and the commodity price surge that has raised their cost of doing business.

P & G, world’s largest consumer products maker, with brands ranging from Pampers diapers to Olay skin-care products, posted higher quarterly profit. It said cost controls helped offset soaring prices for oil and other commodities.

Kraft, whose brands that include Oreo cookies and Oscar Mayer lunch meat, reported a drop in quarterly profit as the largest North American food maker company was hit by soaring costs for oil and ingredients such as wheat, and spending on new products and marketing. But the results were better than analysts were expecting as price increases and new products lifted sales.

Colgate-Palmolive posted a higher-than-expected quarterly profit, boosted by strong sales outside the United States and higher prices that helped offset soaring commodity costs. 

And Kellogg, the world’s largest breakfast cereal maker, posted higher-than expected profits as price increases helped offset soaring commodity costs.  The maker of Frosted Flakes and Keebler cookies also raised its dividend and stood by its full-year earnings forecast, though it said it expects commodity costs to rise more than originally planned. 

Also in the basket:

Reynolds American profit disappoints, stock dips

Penney CEO cautiously optimistic on better holiday

Dean Foods 1st-quarter profit falls

OfficeMax net up on one-time gain; sales fall

(Photo: Reuters)

Check out upcoming earnings and what they might say about food costs.
 
Food inflation is one of many factors putting pressure on U.S. consumers. (Housing, the credit crunch and soaring gasoline prices are some of the others.) But so far, big packaged food companies have been sticking to the mantra that consumers are willing to pay a little more for their wares as long as perceive they are getting a benefit in return.

Next week promises to offer snapshots on how rising food costs may be affecting consumer behavior. That’s because both Kraft, the largest North American food company, and Kellogg, the largest cereal maker, are slated to report earnings.
Kraft gave reporters a preview this week of new products they are launching, and none seemed to be geared to consumers trying to cut back on spending.
 
But grocery store operators seem to know that many consumers are scrambling to pay for necessities like food these days. Both Kroger and Supervalu are offering bonuses for consumers who turn their tax rebate checks onto gift cards to be used in the store. (Those rebate checks also are expected to start coming next week.)
 
So the question is, are things different this time around? Will the rising cost of fuel and food and an economy that might be in recession cause consumers to trade down to store brands and other cheaper alternatives?
 
Also in the basket:
 
Rising food prices are “global crisis”: U.N. chief
 
Charming Shoppes exploring alternatives on non-core assets
 
Protest-hit Carrefour cancels China sales plan
 
Plastic bottle scare is a boon for some (N.Y. Times)

(Photo: Reuters)