Tofutti Profits Down: An Omen?

I've been eating Tofutti products for many, many years. The company, as I've written before, is one of the oldest dairy alternative product manufacturers.

A standard business announcement press release said that while Tofutti's sales were up, profits were down.

The Company's operating results continued to be negatively impacted as a result of new product start-up costs, including costs incurred at a new co-packaging location, increased marketing expenses and higher packaging and freight charges. The Company expects that its operating expenses will continue to be affected by these same factors during the remainder of 2008.

Not a huge bit of news, unless you own Tofutti stock, which I don't.

For me the real underlying news is that one of the best known, longest-lived, and most established companies in the milk alternative business is having problems.

Niche products and companies are almost almost the ones to feel the effects of economic slowdowns first and more severely than mainstream companies. That brings up the chilling prospect that some of the shakier companies - but who nonetheless produce some of your favorite foods - may go out of business, or at least be forced to severely cut back, in the near term.

That's not fair, but it's historically likely. Keep watching the shelves.