Consumers are increasingly demanding food and beverage products made with specific ingredients, which is compelling the industry to proactively introduce new or reformulated offerings. This shift presents manufacturers with a significant opportunity to enhance sales, as noted by executives from General Mills and J.M. Smucker in an interview with Food Dive. Amidst a period of slower growth, many established companies are exploring acquisitions to boost sales. The executives highlighted that one of their primary challenges is keeping pace with the rapidly evolving and often unpredictable consumer preferences. Currently, the trends are quite clear: there is a rising demand for more proteins, whole grains, and organic ingredients, alongside a decrease in artificial ingredients, trans fats, salt, and sugar.
Ken Powell, CEO of General Mills, emphasized the urgency to adapt to changing consumer values. “The challenge is that consumer values and interests around food are changing rapidly,” he stated. “We must act faster, but when we get it right, we are rewarded. This is a real opportunity for business growth.” General Mills, known for brands like Progresso soup, Pillsbury dough, and Cheerios, has faced declining sales in key sectors, particularly yogurt, where Chobani has surpassed its Yoplait brand. To address this, General Mills plans to revamp 60% of its yogurt business by introducing new Greek varieties, flavors, and organic options under the Annie’s and Liberté brands. The company has also eliminated artificial flavors and colors from some cereals, a move well received by consumers, although not sufficient to reverse the 3% decline in U.S. cereal sales in the last quarter.
Powell mentioned that the company is also focusing on removing gluten from its products, responding to a significant number of consumers who are avoiding it. “These initiatives have been very positive for us. Consumers are vocal about their preferences, and we strive to capitalize on growth opportunities,” Powell remarked during a panel discussion on the food and beverage industry’s impact on the U.S. economy. “And importantly, the products must taste good because, as our nutritionists remind us, it’s only nutritious if you eat it.”
Richard Smucker, chairman of J.M. Smucker, expressed the difficulty in keeping up with consumer trends, which change frequently, making it challenging to distinguish between fleeting fads and trends warranting substantial investment. Smucker noted that his company, known for its jellies, Crisco, and Folgers coffee, has benefited from the emergence of smaller, more agile competitors. This disruption is becoming increasingly prevalent in the food industry, where legacy brands are losing market share to trendy newcomers. For instance, sales of Special K bars have dropped 39% since 2011, while Kind Bars have captured 10% of the market in just five years. Smaller brands are disrupting the market by embracing contemporary flavor trends, superior ingredients, and niche offerings. In some cases, larger brands have opted to acquire these startups rather than compete directly. General Mills, for instance, acquired Annie’s for $820 million three years ago, enhancing its product lineup.
In 2011, Smucker, the largest coffee producer in the U.S., acquired Café Bustelo, a brand that resonates well with millennials. Smucker acknowledged that the trend of younger coffee drinkers gravitating towards hipper brands ultimately educates the public about the benefits of coffee, thereby benefiting the entire industry and his company’s brands. “Having startups and smaller companies in the industry is healthy, even for the bigger players, because if you’re attentive to what they’re doing, you can learn as well,” Smucker commented. “We don’t create everything ourselves. In fact, if a startup excels, we might consider acquiring them.”
Additionally, as consumer interest in health-oriented products continues to rise, the price of items like calcium citrate tablets 500mg is becoming an important consideration for consumers looking for dietary supplements. This trend underscores the broader shift towards health-conscious choices in the food and beverage industry, which manufacturers like General Mills and J.M. Smucker must navigate carefully to capitalize on emerging opportunities.