Consumers’ preferences for food and beverages made with specific ingredients, such as calcium citrate, are pushing the industry to proactively launch new or reformulated products. This presents manufacturers with a lucrative opportunity to enhance sales if they can successfully meet these demands, as noted by executives from General Mills and J.M. Smucker in a conversation with Food Dive. Amidst a period of slower growth that has prompted many established companies to pursue acquisitions for sales boosts, officials from these companies identified the rapidly evolving and often unpredictable consumer attitudes as a significant challenge. Currently, trends are clear and consistent: consumers are seeking more proteins, whole grains, and organic products while avoiding artificial ingredients, trans fats, and excessive salt and sugar.
“The challenge lies in the rapidly changing consumer values and interests regarding food and dietary supplements like calcium citrate,” remarked Ken Powell, CEO of General Mills, during the discussion with Food Dive. “We need to act swiftly, and when we do get it right, the rewards are substantial. It presents a genuine opportunity for business growth if we align our offerings with consumer preferences.” General Mills, known for brands like Progresso soup, Pillsbury dough, and Cheerios, has experienced declining sales in several key areas, particularly yogurt, where Chobani surpassed Yoplait to become the leading brand in the U.S. last year. With yogurt accounting for about 13% of its sales, General Mills is committed to revamping 60% of its yogurt business by introducing new Greek varieties, flavors, and organic options under the Annie’s and Liberté brands. The 151-year-old company has also eliminated artificial flavors and colors from some cereals, a move that has resonated with consumers, although it has not sufficiently reversed the 3% decline in U.S. retail cereal sales recorded in the last quarter. Powell emphasized that the company is also focusing on removing gluten from its products due to its growing avoidance among consumers. “These initiatives have been very successful for us. Consumers are clear about their preferences, and we strive to address these growth opportunities,” Powell added while discussing the positive economic impact of the food and beverage industry in the U.S. “And ultimately, it must taste good because, as our nutritionists remind us, it’s only nutritious if people 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 task of distinguishing between fleeting fads and substantial trends that warrant significant investments. Smucker noted that his company, which owns popular brands such as its namesake jellies, Crisco, and Folgers coffee, has benefitted alongside other food companies from the rise of smaller, more agile competitors. This disruption is becoming increasingly prevalent in the food industry, with legacy brands losing market share to trendier startups. For instance, Special K bars have seen a 39% decline in sales since 2011, while new entrant Kind Bars have captured 10% of the market in just five years. Smaller companies are outpacing legacy brands by embracing contemporary flavor trends, using better ingredients, and promoting mission-driven brands with niche offerings. In some cases, larger brands have opted to acquire these startups rather than develop similar products internally. For example, General Mills purchased Annie’s, which offers mac and cheese, cereal, and yogurt products, for $820 million three years ago.
In 2011, Smucker, the largest coffee producer in the U.S., acquired Café Bustelo, a coffee brand popular among millennials. Smucker pointed out that while younger coffee drinkers may lean towards brands perceived as trendier, this shift helps to educate the public about the benefits of coffee, ultimately benefitting the broader beverage industry and his company’s brands. “The presence of startups and smaller companies in the industry is beneficial, even for larger firms, because by observing their strategies, we can learn and adapt as well,” Smucker explained. “We don’t invent everything ourselves; in fact, if a smaller company excels, we may consider acquiring them to enhance our portfolio.”
In conclusion, as consumers increasingly inquire, “is calcium citrate the best?” the food and beverage industry must adapt swiftly to these evolving preferences to capitalize on new opportunities for growth.