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The Great Mac ‘n Cheese Merger

What came first: the macaroni and cheese or the college student?

Although college students still consume their fair share of junk food, it looks like big-name companies like Kraft Foods Inc. are finally understanding why college students are putting half of their paychecks towards rent and the other half towards Chipotle.

In a bold move last week, Kraft Foods Inc. and H.J. Heinz Co. announced a merger between the two food companies to satisfy market losses due to the changing of consumer tastes. According to the Wall Street Journal, the new company, the Kraft Heinz Co., will have a revenue of roughly $28 billion.

The newly-established Kraft Heinz Co. will become the fifth largest food and beverage company, encompassing brands like Jell-O, Maxwell House coffee, Planters nuts, Velveeta and Oscar Meyer, among others.

So what does this mean for macaroni and cheese aficionados everywhere?

It means that even though Kraft macaroni and cheese is delicious at any hour, more and more consumers are spending their money on fresher, healthier options and moving away from processed and packaged foods.

Recognizing this, Kraft made some changes to its products before deciding to combine with Heinz. The company took artificial coloring out of some of its cheeses and created a protein pack called P3, which combines cheese, nuts and meat in a convenient to-go package.

Despite these changes, the company still didn’t fare well, only making $18 billion and experiencing a net profit fall of 62%.

Of course, sales could also be down due to Kraft’s recall of macaroni and cheese boxes, which were recently found to have metal shards in them.

In light of this and other similar incidents, the market seems to be rewarding companies that are producing healthier (or what seem to be healthier) food options. Consumers are becoming more comfortable spending a little more money on a healthier option, as seen in Forbes Magazine. The article explains that food producers like Campbell’s, General Mills and Mondelez are looking to produce more foods that are gluten-free, organic and fresh to accommodate the growing demand.

According to Nielsen’s Global Health and Wellness Survey, 32 percent of millennials and 41 percent of Generation Z would be willing to pay a premium price for healthy foods. Of Baby Boomers, only 21 percent would consider the products at the more expensive price.

Even though younger generations are more willing to buy products labeled “healthy,” Millennials (as well as other generations) are still skeptical of whether or not that’s actually true. In the same study, Nielsen found that 63 percent of global consumers are skeptical about the validity of health claims.

One notable example is the previously mentioned Chipotle. Earlier this year, the New York Times released an article exposing just how many calories were actually in that “healthy” burrito, and the results were pretty shocking. Most burritos, even burrito bowls, were in the thousands calorie-wise. Apparently guac isn’t the only thing that’s extra at Chipotle.

With the higher importance on healthy foods, consumers can expect to see more mergers similar to Kraft and Heinz in the future.

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