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March 15, 2012 at 16:48 PM EDT
Peanut price increases aren't stopping sales
and Lisa Fickenscher - Peanut farmers are in town this week to spread the word that their crop is enormously nutritious and boosts energy levels—and that consumers shouldn't be scared off by the product's higher prices these days. Supermarket prices for peanut products are up between 5% and 10%, thanks to severe droughts for the past two years in parts of the South, according to the National Peanut Board, which produced a two-day exhibit at Grand Central Terminal's Vanderbilt Hall, featuring farmers from Georgia, North Carolina and Florida. Despite higher prices, consumers have so far only increased their consumption of peanut products, said the trade group. In fact, peanut sales at retail stores rose 4.7% from the second quarter of 2011 through end of the fourth quarter of last year, according to Information Resource Inc., one of the major data companies that reports on consumer purchases. It's the peanut manufacturers that have been suffering. New York City-based Peanut Butter & Co., one of three sponsors of the event, is paying three times as much for peanuts this year compared to previous years, said president Lee Zalben. “We can't pass this along to our customers,” he said. Instead, he has been negotiating deals with his transportation, warehouse and packaging vendors, most of which are based in Georgia where the company manufactures its products. Despite these challenges, Peanut Butter & Co. has been growing dramatically, having just signed a distribution deal with Safeway, which will carry the premium product in 1,500 stores across the country. “There has been a lot of discussion about prices,” said Raffaela Marie Fenn, president of the National Peanut Board. “But we are here to remind people that peanuts are a super food, a great source of protein and antioxidants.”
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