By Brad Dorfman and Lisa Baertlein
CHICAGO (Reuters) - Go to a restaurant or eat at home? Pay for a brand name or save money on a generic or store brand? Is that bottle of wine really necessary?
During hard times consumers tend to keep money in the household and now, as they grapple with a weakening U.S. economy, record gas prices and a deteriorating home market, they threaten the profits of food and restaurant companies across the country.
"The cost pressures are just intense. It's so far reaching," said food and restaurant consultant Bob Goldin, who added the grain-driven cost increases have affected everything from meat to oils. "We're in 'batten down the hatches' mode right now," he said.
Food and restaurant companies, facing intense cost pressures of their own from soaring commodity and materials prices, will discuss issues that can affect their operations at the Reuters Food Summit in Chicago March 17 through 19.
Prices for U.S. grains and oilseeds like corn, wheat and soybeans hit record highs this year due to tight supplies and a surge in interest from investment funds that have been diversifying their portfolios into commodities.
Most packaged food companies have said they have been able to pass along price increases for raw materials to consumers without people trading down to lower-priced alternatives.
ConAgra Foods Inc (CAG.N: Quote, Profile, Research, Stock Buzz) Chief Executive Gary Rodkin said last month that ConAgra should have raised prices sooner.
But analysts are asking how long consumers will bear the burden, when standard size boxes of brand name breakfast cereals cost as much as $6 a box in some markets. Continued...
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