Consumers are increasingly purchasing food and beverages containing specific ingredients, compelling the industry to proactively introduce new or reformulated products. This shift presents manufacturers with a profitable opportunity to enhance sales if they can meet consumer demands effectively, as highlighted by executives from General Mills and J.M. Smucker in an interview with Food Dive. In an era of sluggish growth, which has prompted many established companies to seek acquisitions to boost sales, executives noted that one of their main challenges is the rapidly evolving and often unpredictable preferences of consumers.
Current trends are clear: there is a growing demand for more proteins, whole grains, and organic options, while consumers are seeking to reduce their intake of artificial ingredients, trans fats, salt, and sugar. “The challenge is that consumer values and interests regarding food are changing swiftly,” stated Ken Powell, CEO of General Mills. “We must adapt more quickly, but when we successfully cater to these preferences, it leads to rewards. It truly is an opportunity because getting it right translates to 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 has surpassed Yoplait as the leading brand in the U.S. With yogurt accounting for approximately 13% of its sales, General Mills is committed to revamping 60% of its yogurt offerings to better align with consumer trends by 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 some cereals—a move that has resonated with consumers, but has not been sufficient to reverse a 3% decline in U.S. retail sales of cereals during the most recent quarter. Powell mentioned the company’s focus on removing gluten from certain products, as many consumers are avoiding it. “These have been very positive initiatives for us. Consumers are quite vocal about their preferences, and we strive to address these opportunities where we see potential for growth,” Powell remarked during a panel discussing the food and beverage industry’s benefits to the U.S. economy. “And importantly, it has to taste good, because as our nutritionists remind us, it’s only nutritious if you actually eat 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, making it tough to distinguish between a fleeting fad and a trend worthy of significant investment. Smucker indicated that the food manufacturer, which produces its namesake jellies, Crisco, and Folgers coffee, has benefited from the rise of smaller, more agile companies that are disrupting the industry. Legacy brands are increasingly losing market share to these trendy newcomers—like Special K bars, which have seen a 39% drop in sales since 2011, while Kind Bars have captured 10% of the market in just five years. These smaller companies thrive by embracing current flavor trends, utilizing better ingredients, and offering mission-driven brands and niche products. In some instances, established brands find it more efficient and cost-effective to acquire these newcomers to stay competitive. For example, General Mills purchased Annie’s, known for its mac and cheese, cereal, and yogurt, for $820 million three years ago.
In 2011, Smucker, the largest coffee producer in the U.S., acquired Café Bustelo, a coffee brand that has gained popularity among millennials. Despite younger coffee drinkers gravitating toward brands perceived as trendier, Smucker believes this trend has helped raise awareness of coffee’s benefits, thereby enhancing interest in the broader beverage industry, which ultimately benefits the company’s own brands. “Having startups and smaller companies in the industry is healthy, even for larger players, because if you pay attention to what they are doing, you can learn as well,” Smucker noted. “We don’t create everything ourselves. In fact, if they excel at something, we might even consider acquiring them.”
In light of these developments, the introduction of products like the Citracal calcium supplement D3 could also reflect the industry’s responsiveness to consumer demands for health-focused options. As more consumers prioritize their health, products that support their nutritional needs will likely gain traction in the market, further highlighting the importance of staying attuned to consumer preferences.