Cheetos Macaroni & Cheese and the Polarization of US Grocery Culture

Image via Frito-Lay

Living in New York, it’s easy to think that the 22% spike in organic sales during mid-March occurred evenly, and for the same reasons, across the country. Or that everyone is re-growing scallions to cut down on food waste.

Enter Cheetos-branded boxed macaroni and cheese: proof that organic hasn’t become 100% the US norm. There are three flavors that reference the brand’s savory puffed corn snacks: regular,  flamin’ hot (their spelling, not mine) and cheesy-jalapeno. Shoppers can pick between regular boxed and just-add-water (instant) versions.

The release, and the hub-bub surrounding it, epitomizes the polarization of American grocery culture in 2020. While some consumers move toward less processed foods, there’s still an appetite for over-the-top branded mash-ups, the kind of products that drive click-bait headlines.

According to Frito-Lay’s press release, parents have turned to macaroni and cheese as an easy, sugar-free and kid-friendly breakfast during the pandemic. While macaroni and cheese might first seem like a surprising choice, it offers a (perhaps indulgent) medium between parental nutrition preferences and pandemic food trends. Studies suggest that parents routinely underestimate the sugar content in their children’s diets, but six in 10 mothers want to limit the amount of sugar their children consume. As I’ve written elsewhere, the majority of lockdown-induced breakfast trends are sweet, bakery foods. If parents don’t want to whip up pancakes each morning, stirring up macaroni and cheese could be a treat-worthy substitute.

Yet, the six mothers who are trying to reduce how much sugar their children eat are also more likely to purchase organic food for their kids: 75% of US organic sales come from households with kids. Cheetos certainly doesn’t fit this bill, but Annie’s Organic does. In 2014, General Mills purchased the Connecticut-based all-nature stove-top macaroni and cheese brand for $820 million, quickly making it available in supermarkets across the US. But while Annie’s has an adorable rabbit mascot, its logo isn’t recognizable. Cheetos’ mascot is, and this is an especially valuable brand asset as child-facing brands come under scrutiny for cartoon-character marketing.

That being said, the appeal of Cheetos macaroni and cheese isn’t limited to kids. Speaking to CNN, Kristin Kroepfl, chief marketing officer for Quaker Foods North America (which  is, along with Frito-Lay, a Pepsico subsidiary), said “Recipe searches for Cheetos are up 192% year on year. We embraced that insight."

This suggests that adults looking to get creative in the kitchen are also embracing Cheetos, at least as a way to jazz up their dinner routine. But does this culinary interest map onto desire for a branded quick-fix meal? And will this interest remain post-pandemic? 

It could, but the target consumer of Cheetos’ macaroni and cheese is naturally more limited than Annie’s and Kraft. In fact, I believe it is their lack of mascot that makes them more appealing when it comes to dinner preparation. While kids -- and, initially, the young-at-heart -- are likely to find the familiar Cheetos mascot an alluring mac and cheese proposition, his presence is likely to mark the food as a junk food. This will matter less to kids, but it will matter to their parents, who are likely to see Kraft and Annie’s as more wholesome alternatives simply because they are completely excised from pester-power marketing. In this sense, the absence of a mascot gives them an illusion of wholesomeness because it creates a consumer-brand rapport that relies on something intrinsic to the food itself -- that is ingredients or nostalgic flavor -- rather than recruiting an external character to endorse a product. 

Ultimately, Cheetos macaroni and cheese gives us a reminder that organic remains far from the default purchasing mode in the US, and that consumers are interested in wacky brand mash-ups. Going forward, I think it’s likely we’ll see more mascots from savory snack companies grace boxes of supposedly-child-friendly meals as a way to side-step issues surrounding cartoon characters and sugar. But I believe these products are naturally limiting their market and will drive the best sales when presented as limited-edition releases.

FUN FACT: Talking about Annie’s Organic is enough to send me into a spiral of Internet nostalgia, especially when I realized that brand was born only a few years before I was (eep!). But while my parents were happy to cook me up Annie’s Parmesan Peace Pasta for dinner (non-branded pester power, I wanted it because of the tie-dye box), my lunch box was not filled with the defining food product for the Millennial generation, namely Dunkaroos. But there was always another kid at the lunch table who had them! And now, I like to imagine that at least a few of those kids have grown up into adults who are sampling Dunkaroos-infused beer. The sweet-infused brew is being made by Martin House Brewing Company in Texas and, according to Delish, is a “beer that only real '90s kids will love”. Personally, I think I’ll stick to the delightful options at Craft & Carry -- I recently had a Gose from South Carolina’s Westbrook Brewing and, if you like sour beers, it was a brilliant balance between tart and bitter.

Could Paper Bottles Be the Future of Luxury Alcohol Packaging?

Image via Diageo

Marbled sheets aside, paper is not the material that comes to mind when I think of luxury. But Diageo is betting that I’ll change my mind when I see a sleek matte black bottle of Johnnie Walker. Starting in 2021, Diageo will package Johnnie Walker whiskey in paper. It’s a clever play on Diageo’s part to position itself as a leader in mass-market sustainability, with an upscale twist. As of 2019, 45% of consumers between the ages of 18-34 say that it’s extremely important to purchase goods produced in an eco-friendly manner (Toluna, 2019). And as these customers accrue wealth to spend on luxury products -- or treat themselves to luxury items here and now -- offering sustainable packaging could be a key way to capture their immediate spend, and long-term loyalty.

Pepsico will also debut similar paper packages, but I’m interested in Diageo because it’s chosen to introduce the bottle with one of its best-known, premium lines (they’re not starting with J&B or Johnny Walker red label). Consumers are already habituated to soft drinks coming in paper. Most Americans have had either a juice box or a carton of milk or a coconut water in a Tetra Pak. We understand that soft drinks come in soft packages.

Alcohol is different. At the high-end, it’s packaged in thick glass. At the budget-level, it’s hidden away in shiny aluminum cans and plastic bladders in cardboard boxes. Regardless of how much we spend, these (mostly) special packages imbue alcohol with a sense of occasion. These containers aren’t everywhere, because what’s inside isn’t an everyday drink. 

The aluminum can is an exception, and I believe that’s a major reason why canned wine quickly became a $45 million business, while sales of canned cocktails and hard seltzer grew 80% between April 2019 and 2020, is such a notable trend. While beer has an easy-drinking, soda-like reputation (especially light beer), wine and cocktails don’t, especially in the US. Putting wine and cocktails into a glorified soda can strips away their fancy appeal and aims to recast them as quotidian as a Diet Coke or a Bud Light.

Following through on this reasoning, we could argue that the same will happen when you pour whiskey into a paper bottle. This thread of logic could dissuade companies like Pernod-Ricard and Gruppo Campari back from developing paper bottles. But Diageo has meticulously crafted its paper package to retain the high-design ethos of a glass Johnnie Walker bottle. The matte black paper has light embossing details around the title, the name is printed in sleek silver at the same askew angle as on the glass version. Thanks to the contrast of the silver ink on the black background, you can see the gentleman logo more clearly. The current mock-up has soft rounded edges, a subtle nod to the beveled face of the standard glass bottle. And while the silver screw-top feels industrial, it’s no worse than the flimsy aluminium cap on the current bottles. Instead of debasing whiskey into a common liquid, the packaging argues for paper as a luxury touch point.

But in order for it to leave a one-off switch and follow in the steps of canned wine and canned cocktails, people will need to actually buy the product. Will Millennials and Gen Z consumers bite? While 73% of Gen Z and 68% of Millennials are willing to spend more on sustainable products -- compared to 42% of Boomers -- they’re also more likely to embrace semi-sobriety. How they practice that “semi” long-term could influence fate of paper alcohol bottles. The container’s eco-conscious cred could convince younger drinking age consumers to purchase Johnnie Walker over whiskey encased in bloated glass. Given the fact that Johnnie Walker black is typically considered a prestige product, the very prestige could be what drives other consumers to embrace the paper bottle. 

Yet the relative rarity of these purchases could mean that customers choose to stick with the bottle format that they know and feel to be prestige. Paper might sing out sustainably-minded, but is that what young consumers are looking to signal about themselves from their bar cart? If people aren’t buying it for their home bar, will restaurants buy them? The paper won’t glow from a back-lit bar as current bottles do. This paper bottle is more utilitarian, it’s no longer a piece of decor.

This tension will be interesting to watch unfold, yet in my opinion the threat of low-adoption shouldn’t be enough to stop companies from experimenting with paper. The question is simply finding the appropriate occasion to introduce the paper liquor bottle so it catches on at all levels of the industry. If it’s not prestige whiskey, maybe mid-range gin? Or a cheeky bottle of Baileys? Mid-range, biodynamic wine could be another interesting option, especially for varieties that people are already habituated to purchasing in a box. Whiskey is a clever start as it signals the intention for paper-as-luxury, but I’m not convinced it will end up in the mass-luxury space. Niche luxury, or mid-market liquor seems to me an easier sell.

Why Ice Cream Novelties Will Win Summer 2020

Image via My Recipies

My boyfriend loves Klondike bars. The double chocolate ones were a regular grocery store purchase before we discovered the (far superior) KitKat ice cream novelty. But while young “athletic” (read: thin) men might purchase Klondike bars, the brand needs to capture a more diet conscious audience as well to maintain market share.

That’s why the company’s new “doughnut” line is such a win. For summer 2020, Unilever’s mass-market subdivision Good Humor-Breyers released a line of Klondike bars with flavors inspired by classic doughnuts -- specifically Boston cream, triple chocolate and strawberry sprinkles -- complete with a hole in the middle. It’s a shrewd combo: nostalgic flavors meet an indulgent format but with stealth portion control. 

While Halo Top’s popularity rush -- between 2016 and 2017 sales jumped from $44.3 million to $350.6 million (Nielsen, 2018) -- made light ice cream a focal point for frozen dessert companies, I believe Klondike is targeting a different market (Klondike is also technically not ice cream, but “frozen dairy dessert” meaning that it doesn’t have a high enough fat content to be considered ice cream. This is actually the case for most ice cream novelties on the market, and even many mass market brands, like Turkey Hill and Breyers). They’re not targeting people who will happily adopt a new product, they’re targeting people who don’t want to change. The doughnut bars use the same ice cream base as regular Klondike bars. They make no claims as to having fewer calories than the original, don’t say they’re low-sugar (they’re not) and don’t talk about their hidden protein pack (there isn’t one). This is simply an ice cream bar, albeit one with a hole in the middle.

Especially among young consumers, there’s a growing segment of people who see treats not as a rare, food-coma-level indulge power session, but rather as a nice addition to their weekly diet. Combine this with a backlash against the hard low-fat versions spiked with sugar alcohols (highly-processed sweeteners that have a chemical structure in-between sugar and alcohol, and activate sweet-taste receptors, without the calories found in sugar), and you have a perfect opening for these ice cream bars that weave moderated indulgence into their very format. I’d argue that the de-facto portion of ice cream novelties could be part of the reason that they emerged as a bright spot of the frozen dessert market in 2019, seeing a 4.2% sales uplift between August 2018 and 2019 (Iri, 2019).

Klondike isn’t the only one who’s spotted this trend, but they represent one of the best mass-market implementations. Last summer, Los Angeles-based stuffed mochi ice cream company My/Mo released a series of nostalgia-tinged flavors like s’mores, cookies & cream and chocolate sundae. Earlier this year, my beloved Kit Kat ice cream cones came out with a mini bar version. Magnum is also expanding its line of mini-bars to include its most recent flavors, like ruby chocolate. While Magnum and My/Mo lie on the more premium end of the market, the breadth of this trend demonstrates the market potential of portion-controlled novelties that retain their indulgent appeal.

The choice to dupe a doughnut is also one that I believe is significant as it allows consumers to double up on their indulgences (mentally, rather than literally, in this case). Unlike the DiGiorno Croissant pizza -- which, spoiler alert, I do not believe is a smart mash-up -- Klondike’s doughnut ice cream bars combine two similar sweets that people might actually want to eat at the same time. While the experience of eating a doughnut is undoubtedly different than eating an ice cream bar, by aligning the flavors together in the consumer’s mind, Klondike is able to help people feign satisfaction, or at least make a decision. Referencing doughnuts also helps to make the product seem even more indulgent than it already is, erasing any idea that having a hole in the middle of the ice cream bar means sacrificing a sweet bite.

And while we’re on the topic of doughnuts, indulgence and sacrifice, brands have already tried to market doughnuts with holes as “healthier” than doughnuts without holes. In the UK, high street bakery Gregg’s (think working class Pret a Manger) released a glazed doughnut without filling that it labelled as a diet doughnut. On one hand, I think this is absolutely ridiculous for more reasons than I want to get into right now. But what’s relevant here is the dialogues that are circulating around mass market food that can associate a completely indulgent product -- doughnuts for Gregg’s, ice cream novelties for Klondike -- with a sense of virtuosity due to a decreased size. Regardless of what you think about giving these foods a health halo, it’s an effective way to differentiate a brand and, ultimately, provide a product that people want. 

It’s this approach to moderated indulgence that I believe will make ice cream novelties, like Klondike’s doughnut line, a bright spot for mass market ice cream sales this summer. As the coronavirus continues to keep Americans from participating in summer activities that lead to spontaneous ice cream cone purchases, novelties offer an easy way to step in and provide some of that summer spontaneity on a particularly sticky evening at home. And, for better or for worse, the fact that they’re individually wrapped will appeal to halfway-health-conscious consumers who are looking for sanitization reassurances. 

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Fun Fact: Before the coronavirus halted new store openings in NYC, Krispy Kreme was set to open a 4,500 sq ft flagship in Times Square. Tourists would have been able to pop in 24 hours a day for fresh doughnuts, as well as NYC and doughnut-themed merch. At first, I thought it was surprising move given the fact that their star crashed and burned so dramatically in the US a few years ago (I now associate them more with the endcap at Tesco, and my British colleagues are more likely to talk about Krispy Kreme than my American coworkers, and our is (was?) steps away from Times Square). But then again, the doughnut market is in rude health with the global doughnut market expected to grow at a CAGR of 5.2% through 2024, reaching global sales of $55 billion (Goldstein Research, 2020). And frankly, all you have to do is see the oodles of St John-style filled doughnuts on Instagram, or spot a bloated Dough variety at a NYC cafe to see that people love doughnuts. 

Alt-Yogurt Line Molten Lavva Epitomizes Next-Gen Indulgence

Image via Lavva

It’s rare that non-dairy yogurt signals indulgence. That slimy-thin texture, courtesy of carrageenan and naturally-low fat alt-milk can too easily taste like a health halo booby prize. But blend up some pili nuts and coconut -- as Brooklyn’s non-dairy yogurt brand Lavva does -- and you’ve got a product worth analyzing.

While the pili nut is making in-roads at specialty food fairs, its mainstream star has yet to explode. Here’s what you need to know: they’re quite mild, have a sweet taste and are a bit like a macadamia nut, only creamier. That’s because they’re really high in fat (per 100 grams, they have four more grams of fat than macadamias do). Pili nuts are native to Southeast Asia and Northern Australia, but when sold commercially they’re usually cultivated in the Philippines. Some companies are starting to make pili nut butter, but it’s way too rich to swap for peanut butter in a lunchbox-friendly sandwich.

These properties are part of the reason why Lavva’s new dessert-inspired dairy-free yogurt line is such a shrewd move. In May, Lavva released Molten Lavva and, silly name aside, I’m betting it will increase their sales and share of the alt-yogurt market. Not only does the original’s naturally sweet flavor and rich, nutty texture lend it a whiff of dessert, the non-dairy yogurt’s higher-than-average price point begets the one-off treat that comes with a post-meal indulgence.

To avoid negative associations with the now-maligned sweetened yogurt category, Lavva chose to have this line Keto certified. That means it’s high in fat and ultra-low in carbs. Instead of sugar, it’s sweetened with erythritol, a sugar alcohol, and monkfruit extract, a plant-based sweetener. The alt-yogurt also contains chicory root to add fiber and reduce the yogurt’s net carb count (here’s how to read a label to see if it’s keto). There’s also a bunch of coconut cream in there, an easy way to bulk up the product and prevent the pili nuts from pushing the mixture into pudding territory. All of this it to say the nutritional facts have been meticulously curated and third-party verified (via the Keto certification) to ensure sweet flavors like Key Lime Pie and Chocolate don’t get passed over as Yoplait 2.0 (also known as, there’s more sugar where that came from).

To further prove the product’s alignment with today’s health concerns, Molten Lavva is fortified with vegan probiotics. On one hand, the probiotics reinforce the alt-yogurt’s association with traditional yogurt, which has a reputation as a good source for gut-friendly bacteria. Yet the demand for probiotics has skyrocketed since the pandemic on the assumption that immunity is linked to good gut health (I write about this here). Combined with consumers’ current zeal for ultra-high-fat yogurt, which as Priya Krishna argues on The Goods is becoming a race to blur the boundaries between ice cream and breakfast, the probiotics bolster Molten Lavva image as a have-when-you-want snack.

This chameleonic appeal will be crucial to the product’s success. While consumers were opting to fuel their days via a selection of snack-sized meals before work-from-home orders, this habit has supercharged during quarantine. And it’s likely to continue as major companies continue to suspend in-office working. With the dissolution of mealtimes comes the dissolution of foods linked to certain times of day. If you’re not having breakfast per se, why can’t your morning meal taste like pie? And if you’re not having lunch at one, why not just have a cup of yogurt to hold you over through your next Zoom call? This flexi-eating style means that products that blend together multiple benefits -- in this case sweetness, high-fat, plant-based probiotics -- will grab consumers who think about their diet in terms of overall benefits, not set meals.

While I don’t love the name, I expect Lavva’s dessert-leaning Molten line to be a hit with East Coast consumers. The product is indulgent, but the brand has taken care to ensure that every on pack claim works to position the alt-yogurt as an anytime-treat in the shoppers mind. By letting the product appeal to both keto-adherents and vegans, Lavva captures a wide swath of what it means to be healthy in 2020. There consumers are also more likely to splurge on diet-specific foods, making the product’s relatively high price point a bridgeable gap. Furthermore, the product fits into the daily patterns of how consumers eat by mixing together breakfast and dessert into a single container that’s apt for anytime. 
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Fun Fact: A new study from Kroger and the Plant Based Food Association found that alt-meats sell 23% better when placed in the regular meat section. My first reaction was: obviously, didn’t we already see that with alt-milks? Beyond that, I think there are a few motivating factors that make this finding not quite the surprise it wants to be. The first is that people who want these products don’t want to travel half-way around the store to get them (if they can even find where they are), the second is that people who are buying these products likely just heard about them on TV and are treating them as an impulse buy, and finally, they’re probably meat eaters who are either getting duped and think they’re buying beef/pork or are curious to try this novel product they heard about on TV. The real question we should be asking ourselves is, why are we letting the meat and milk lobbies keep alt-products from the refrigerated cases when it’s clear that consumers want them there?