Source: Reuters

What a difference a year — and a recession — makes for the food industry.

This time last year, food manufacturers were struggling to raise prices fast enough to keep pace with the soaring cost of ingredients such as wheat and corn.

Now, as companies like Campbell Soup Co, Sara Lee Corp and Unilever Plc prepare discuss their strategies at next week’s Reuters Food and Agriculture Summit in Chicago, food makers are fighting to hold onto those price increases as stressed consumers tighten household budgets.

“That is probably going to be one of their greatest challenges — how can they maintain pricing they have taken at this juncture,” said Wesley Moultrie, a Fitch Ratings analyst who follows food companies.

Worries about pricing and brand loyalty are evident in the weakened share prices of name-brand food manufacturers as retailers push their own cheaper private label offerings.

The Standard & Poor’s 1500 Packaged Foods & Meats index is down 13.5 percent this year, though that is not as steep a drop as the 16.9 percent decline in the Standard & Poor’s 500 over that period.

Perhaps most worrying for the manufacturers, Wal-Mart Stores Inc, a Summit participant, is revamping its own private-label efforts.

The world’s No.1 retailer, which is also the largest grocery seller in the United States, is relaunching its Great Value brand this month.

The move could not only put price pressure on manufacturers that sell through Wal-Mart but could reduce the amount of shelf-space available for their products.

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