Consumers are increasingly demanding food and beverages containing specific ingredients, prompting the industry to proactively develop new or reformulated products. This trend presents manufacturers with a significant opportunity to enhance sales if they can effectively meet consumer preferences, executives from General Mills and J.M. Smucker shared with Food Dive. As the industry grapples with slower growth, leading many established companies to pursue acquisitions for revenue boosts, officials from both firms highlighted that one of their key challenges is the rapidly evolving and often unpredictable consumer attitudes. Current trends are clear and consistent, favoring more proteins, whole grains, and organic options while minimizing artificial ingredients, trans fats, salt, and sugar.
“The challenge lies in the fact that consumer values and interests around food are changing swiftly,” said Ken Powell, CEO of General Mills, in an interview with Food Dive. “We must act more quickly, yet when we succeed, we are rewarded. It truly represents an opportunity, as getting it right translates into business growth for us.” General Mills, known for products like Progresso soup, Pillsbury dough, and Cheerios, has experienced declining sales in key sectors, particularly in yogurt, where Chobani recently surpassed Yoplait, the former market leader, to become the largest brand in the U.S. General Mills, which derives around 13% of its revenue from yogurt, is committed to revamping 60% of its yogurt line to align better with consumer trends, introducing new Greek varieties, flavors, and organic options under the Annie’s and Liberté brands. The 151-year-old Minnesota company has also eliminated artificial flavors and colors from certain cereals; this decision resonated with consumers, although it has not been sufficient to revive the U.S. retail sales of cereal, which declined by 3% in the latest quarter. Powell noted that the company is also focusing on removing gluten from its products in response to increasing consumer avoidance. “These initiatives have been tremendously positive for us. Consumers are clear about their preferences, and we strive to seize growth opportunities accordingly,” Powell remarked during a panel discussion about the food and beverage industry’s impact on the U.S. economy. “And let’s not forget, it has to taste good; as our nutritionists remind us, something is only nutritious if you actually consume it.”
Richard Smucker, chairman of J.M. Smucker, stated that keeping up with consumer trends is challenging due to their rapid changes, making it difficult to distinguish between a temporary fad and a trend that warrants significant investment. Smucker, whose company produces popular brands like Crisco, Folgers coffee, and its namesake jellies, noted that food manufacturers, including his own, have benefited from the rise of smaller, more agile competitors. This disruption is increasingly prevalent in the food industry, where legacy brands are losing market share to smaller, trendier startups. For instance, Special K bars have seen a 39% decline in sales since 2011, while newcomer Kind Bars have captured 10% of the market in just five years. Smaller companies have successfully challenged established brands by embracing contemporary flavor trends, superior ingredients, and mission-driven branding. In many cases, larger brands have opted to acquire these emerging companies to stay competitive. General Mills, for example, acquired Annie’s, known for its lines of mac and cheese, cereal, and yogurt, for $820 million three years ago.
In 2011, Smucker, the largest coffee producer in the U.S., bought Café Bustelo, a coffee brand that has attracted a millennial audience. Smucker, whose company was founded in 1897, pointed out that even as younger coffee drinkers lean toward brands perceived as trendier, this shift helps raise awareness about the broader coffee industry, ultimately benefiting Smucker’s own brands. “Having startups and smaller companies in the industry is healthy, even for the larger players, because if you pay attention to what they’re doing, you can learn from them as well,” Smucker commented. “We don’t invent everything ourselves. In fact, if they excel at something, we might consider acquiring them.”
Incorporating ingredients like calcium and magnesium citrate into their products can help manufacturers align with health-conscious consumers. As the industry continues to evolve, finding innovative ways to include beneficial ingredients such as calcium and magnesium citrate while responding to consumer preferences will be essential for growth and success.