Maybe the first indication should have been when Whole Foods Market, Inc. (NASDAQ:WFMI) declined to carry Hormel Foods Corporation (NYSE:HRL)'s fresh meats products: the King of Processed Foods might have an image problem when it started taking preservatives out of its foods.

Spam® is such an icon of preserved food that it has its entire own sub-culture, with everything from spamku to Spam cookbooks. Google's Gmail serves up Spam recipes instead of ads when you click on the spam (email) folder. Hormel's blue collar customer base adores Spam and the company's other ingredient-packed products, from chili to "deli" luncheon meats. But in fact, "shelf stable" meats have declined from nearly 20% of the company's sales in 2003 to 16.3% in the year ending October 30, 2005. Now making up the majority, 54%, of the company's sales are perishable meats -- although these include everything from the higher-quality, less-processed varieties the company wishes to become known for to the old standbys, from Hormel pepperoni to Little Sizzlers sausages to Jennie-O hot dogs.

A story in the Wall Street Journal [subscription required] this morning highlights Hormel's desires to become a healthier company, which have included innovations in preservation (High Pressure Pastuerization, develped by Washington's Avure Technologies, Inc.) and a raft of new product introductions like the Natural Choice deli meats -- the ones Whole Foods wouldn't stock. The question: if Whole Foods won't take the company seriously as a provider of natural meats, will anyone else? And will the company's loyal customers stand for it?

Hormel's young CEO, Jeffrey M. Ettinger, thinks the company can bridge the gap; but the company's immodest success using its own brand name to market ethnic food is just one indication that the public has a long memory and can never separate Hormel from its iconic Spam. In fact, all of its ethnic products are sold under alternate brand names, like Chi-Chi's Mexican food, Carapelli Italian products, and Patak's Indian varieties.

It's hard for a company like Hormel to ignore the growing market for foods that are closer to the earth, with fewer ingredients and, yes, less shelf-stablization. There's something a little freaky about a meat product that can survive for decades, and America's consumer is growing more and more certain of that. Yet, at the same time, I (for one) can never get Spam out of my mind. That's not necessarily a bad thing -- Hormel should embrace its connection with one of America's great symbols of food product. While at the same time not trying to reach too far. The Wall Street Journal notes a new ad campaign that suggests customers make penne pasta with Hormel Chili -- sorry, that's going entirely too far. In fact, I wrote a spamku about it:

Hormel does Spam well
and Billy loves its chili
But gourmet? No way!

[Photo everett taasevigen]