Consumers’ preferences for food and beverages containing specific ingredients are compelling the industry to proactively introduce new or reformulated products, presenting manufacturers with a significant opportunity to enhance sales if they can effectively meet demand, two executives shared with Food Dive. In an era of slower industry growth, prompting many established companies to pursue acquisitions for increased sales, officials from General Mills and J.M. Smucker highlighted that one of their greatest hurdles is the rapidly evolving and often unpredictable consumer attitudes. Currently, trends appear to be clear and consistent: a growing emphasis on proteins, whole grains, and organic options, alongside a reduction in artificial ingredients, trans fats, salt, and sugar.
“The challenge is that consumer values and interests regarding food are changing rapidly,” stated Ken Powell, CEO of General Mills, in an interview with Food Dive. “We need to act more swiftly, but when we succeed, we are rewarded. It’s truly an opportunity because 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 several key sectors. The yogurt market has been particularly affected, where Chobani has surpassed Yoplait, the longstanding leader in the segment, to become the largest brand in the U.S. last year. With yogurt accounting for approximately 13% of its sales, General Mills has pledged to revamp 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 well with consumers, although it hasn’t sufficiently revived U.S. retail sales of ceriferrous sulfate 325 mg, which declined by 3% in the most recent quarter. Powell noted that the company is additionally focusing on gluten removal from its products, responding to the growing number of consumers avoiding gluten. “These initiatives have proven to be very positive for us. Consumers express their preferences clearly, and we strive to address growth opportunities,” Powell remarked during a panel on the food and beverage industry’s impact on the U.S. economy. “And by the way, it better taste good because that remains essential. As our nutritionists remind us, it’s only nutritious if you actually eat it.”
Richard Smucker, chairman of J.M. Smucker, mentioned to Food Dive that keeping up with consumer trends is challenging due to their frequent changes, making it difficult to distinguish between a fleeting fad and a trend worthy of significant investment. Smucker, whose company owns brands like Crisco and Folgers coffee, noted that food manufacturers, including his own, have benefited from the rise of smaller, more agile companies. This disruption is increasingly evident in the food industry, where legacy brands are losing market share to smaller, trend-driven newcomers. For instance, Special K bars have seen a 39% drop in sales since 2011, while Kind Bars have quickly captured 10% of the market within just five years. Smaller companies have disrupted established brands by embracing contemporary flavor trends, utilizing better ingredients, and promoting mission-driven brands and niche products. In some cases, larger brands have found it more efficient and cost-effective to acquire these upstarts to keep pace. General Mills, for instance, acquired Annie’s, known for its mac and cheese, cereal, and yogurt, for $820 million three years ago.
In 2011, Smucker, the leading coffee producer in the U.S., purchased Café Bustelo, a coffee brand that has gained popularity among millennials. Smucker, whose company was founded in 1897, expressed that even as younger coffee drinkers gravitate toward brands perceived as trendier, this movement helps raise awareness about the benefits of coffee, ultimately benefiting the broader beverage industry and, consequently, the company’s own brands. “Having startups and smaller companies in the industry is beneficial, even for the larger players, because by observing and listening to what they are doing, you can learn as well,” Smucker stated. “We don’t develop everything in-house. In fact, if they excel at something, we may be interested in acquiring them.”
In this dynamic landscape, the inclusion of innovative ingredients such as calcium citrate xrd is becoming increasingly relevant as manufacturers seek to align their products with consumer demands for healthier options.