The High Cost Of Spam
Spam: it's not just nasty meat in a can. It's a leading economic indicator! Hormel has been selling the ground-up pig concoction for more than 70 years, and it's acquired quite a status as a gross American icon. Plus, economists have noticed that people seem to buy more cheap, crappy food products as the economy gets worse, and Spam's increasing popularity provides a nice hook for Freakonomics-type stories tying the whole miserable economic picture into the meat-purchasing choices of you, the consumer. Good theory, but, as Ad Age points out, it has one major flaw: Spam is not even cheap.
Hormel doesn't particularly like this explanation. Its executives prefer to attribute any gains to the marketing of the product, and that's probably fair because, when you think about it, Spam isn't simply some cheap generic...
The average price of a can of Spam is up almost 7% to $2.62, or 22¢ per ounce, according to the AP. That makes it costlier than both the average retail price of pork, 18¢ per ounce, and ground beef, 14¢, according to figures from the U.S. Department of Agriculture. Not exactly a bargain.
So if not for sheer necessity, why has Hormel seen Spam sales go up for seven straight quarters? The real answer is heavy marketing from Hormel—including the admirable work being done at Spam.com—and the luck of incredibly high name recognition versus competitors.
Still: the "Spamburger Hamburger" will hopefully die a quick death.
