Kraft Heinz Meat, Cheese Sales Lag as Shoppers Buy Premium Products

CHICAGO – Second-quarter sales of Kraft Heinz’s <KHC.O> Oscar Mayer deli meats and cheese slices grew more slowly than those of higher-end rival products such as ham from pigs fed vegetarian diets on family farms, retail data shows.

The nearly $7 billion U.S lunch meat market grew by 18% in the 8 weeks to June 13, but Oscar Mayer sales rose only 9%, according to Nielsen data analyzed by Wells Fargo. Meanwhile, sales of rival brands like Hormel Foods’ <HRL.N> Applegate and Tyson Foods’ <TSN.N> Hillshire surged 37% and 27%, respectively.

Cheese and chilled processed meat are Kraft Heinz’s top two U.S. businesses by retail sales, but Euromonitor data shows Kraft Heinz’s market share in both categories has steadily shrunk since 2015. The company is due to report quarterly earnings on Thursday.

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