The Kraft company started--believe it or not--as a real cheese company. The founder, James L. Kraft, began the business as a cheese wholesaler and expanded from there. Kraft had a vision of supplying America with nutritious, low-cost cheese products. In 1916 Kraft's dream became a reality when he patented a processed cheese formula, based on milk solids, that would not spoil. He called it "American Cheese."
The general public was less than enthusiastic about Kraft's bland yellow substance, but Kraft was undaunted. He took his formula to the United States Army, and convinced them to buy 6 million pounds of the processed cheese product. After the First World War, the boys came home again, after having developed a taste for Kraft's creation. When the great depression came, the processed cheese was a godsend. Real cheese was hard to get, and it was expensive. During this time, Kraft introduced many of its most successful products, including Miracle Whip, Velveeta, and Parkay margarine.
It was around this time, that Kraft introduced packets of dried, grated American cheese to the market. The reception for the product was underwhelming. This cheese dust was touted as a compliment to soups and baked dishes but the public wasn't buying it. Salesmen set up displays for the product in the soup and macaroni sections of stores.
Finally one day, legend has it, a bright salesman in St. Louis tied packets of the cheese powder to boxes of macaroni and convinced store owners to sell the combination as one item. Soon after, he--and now other salesmen--started putting the cheese packets inside the macaroni boxes and labeling the boxes "Kraft Dinner." It wasn't long before Kraft caught on and stopped trying to sell the cheese powder on its own.
Perhaps, under other circumstances, the little boxed meals would have been rejected, but times were tough and the Kraft Dinners were cheap. Meat rationing led to the wartime tradition of "Meatless Tuesday," and Kraft Dinner - or "Blue Box" as it is called by some - became the meal of choice on that night of the week. Mothers promised their children that someday, after war rationing was over, they would make them the real thing again; but that day never came. Kids grew to like the boxed meals, so mothers threw up their hands and accepted it.
The thing that makes a macaroni and cheese dinner special is, of course, the sauce mix: a strange goldenrod powder that transforms - through the magic of milk and margarine - into a cheese-like soup. Whether it tastes anything like cheese or not is moot. Americans obviously love the stuff or M&C dinners would have disappeared decades ago. Again, it is important to remember this. Macaroni and Cheese is not that hard to prepare from scratch. That most people opt for the dinner mix speaks well for the substance.