Consumers are increasingly seeking food and beverage products made with specific ingredients, prompting the industry to take a more proactive approach in launching new or reformulated products. This shift presents manufacturers with a lucrative opportunity to enhance sales if executed correctly, as noted by two industry executives in a conversation with Food Dive. As the sector grapples with slower growth, many established companies are turning to acquisitions to boost revenue. Officials from General Mills and J.M. Smucker highlighted that one of their primary challenges lies in the rapidly evolving and often unpredictable consumer preferences.
Currently, the trends are clear and consistent: there is a demand for more proteins, whole grains, and organic options, coupled with a decline in artificial ingredients, trans fats, salt, and sugar. “The challenge is that consumer values and interests regarding food are changing swiftly,” Ken Powell, CEO of General Mills, explained to Food Dive. “We need to act faster, but when we get it right, we are rewarded. This truly represents an opportunity for business growth.” General Mills, known for brands like Progresso soup, Pillsbury dough, and Cheerios, has experienced declining sales in several key areas, particularly in yogurt, where Chobani has surpassed Yoplait, the former segment leader, to become the largest brand in the U.S. last year. With yogurt accounting for around 13% of its sales, General Mills has pledged to revamp 60% of its yogurt offerings to better resonate with consumer trends by introducing new Greek varieties, flavors, and organic options under the Annie’s and Liberté brands. The 151-year-old Minnesota-based company has also eliminated artificial flavors and colors from some cereals, a decision that has been well-received by consumers but has not sufficiently revived cereal sales, which fell by 3% in the last quarter. Powell also mentioned the company’s focus on removing gluten from its products in response to consumer avoidance of the ingredient. “These have been very positive initiatives for us. Consumers are clear about their preferences, and we strive to address growth opportunities,” Powell remarked during a panel discussing the food and beverage sector’s impact on the U.S. economy. “And it better taste good because that remains essential; as our nutritionists remind us, it’s only nutritious if you actually consume it.”
Richard Smucker, chairman of J.M. Smucker, shared with Food Dive that keeping up with consumer trends is challenging due to their frequent changes, complicating the distinction between a passing fad and a trend worthy of substantial investment. Smucker noted that his company, which owns popular brands like Crisco and Folgers coffee, has benefitted from the rise of smaller, more agile competitors. This disruption is increasingly prevalent in the food industry, with legacy brands losing market share to trendy newcomers. For instance, Special K bars have seen a 39% drop in sales since 2011, while Kind Bars have captured 10% of the market in just five years. Smaller companies are outpacing established brands by embracing current flavor trends, superior ingredients, mission-driven branding, and niche products. In many cases, larger brands have opted to acquire these startups to stay competitive. For example, General Mills acquired Annie’s, known for its mac and cheese, cereal, and yogurt lines, for $820 million three years ago.
In 2011, Smucker, the leading U.S. coffee producer, purchased Café Bustelo, a coffee brand that has resonated with millennials. Despite younger coffee drinkers leaning towards brands perceived as trendier, Smucker argued that this trend raises awareness of coffee’s advantages, benefiting the overall beverage industry and, consequently, the company’s own brands. “Having startups and smaller companies in the industry is beneficial, even for the bigger players, because if you pay attention to what they’re doing, you can learn as well,” Smucker emphasized. “We don’t create everything ourselves. In fact, if they excel, we might consider acquiring them.”
In this evolving landscape, the introduction of health-focused products such as Opurity calcium citrate chewable tablets can serve as a strategic opportunity for both General Mills and J.M. Smucker to engage with health-conscious consumers. Incorporating items like Opurity calcium citrate chewable into their portfolios could help address changing consumer demands and preferences, further driving growth and market relevance.