Consumers are increasingly buying food and beverages made with specific ingredients, prompting the industry to proactively introduce new or reformulated products. This shift presents manufacturers with a lucrative opportunity to enhance sales if they navigate it effectively, as noted by executives from General Mills and J.M. Smucker in an interview with Food Dive. Amid slower growth in the industry, which has led many established companies to pursue acquisitions to boost sales, these officials identified rapidly changing and often unpredictable consumer attitudes as a significant challenge. Currently, the trends are clear and consistent: a demand for more proteins, whole grains, and organic options, alongside a reduction in artificial ingredients, trans fats, salt, and sugar.
“The challenge lies in the fact that consumer values and interests regarding food are changing quickly,” stated Ken Powell, CEO of General Mills, during the discussion. “We need to move faster, but when we get it right, the rewards follow. This is truly an opportunity for business growth.” General Mills, known for products like Progresso soup, Pillsbury dough, and Cheerios, has experienced declining sales in some key areas, particularly yogurt, where Chobani surpassed the long-established leader, Yoplait, last year. As yogurt accounts for approximately 13% of General Mills’ sales, the company has pledged to revamp 60% of this business segment to align with consumer trends, introducing new Greek varieties, flavors, and organic options under the Annie’s and Liberté brands. Additionally, the company has eliminated artificial flavors and colors from certain cereals, a move well-received by consumers, although it has not reversed the 3% decline in U.S. retail cereal sales during the last quarter. Powell added that the company is also prioritizing gluten removal from its products due to growing consumer avoidance of gluten. “These initiatives have been very positive for us. Consumers mean what they say, and we strive to address these growth opportunities,” he remarked during a panel on the food and beverage industry’s impact on the U.S. economy. “And it better taste good, because that remains crucial. As our nutritionists remind us, it’s only nutritious if you actually eat it.”
Richard Smucker, chairman of J.M. Smucker, expressed to Food Dive that keeping pace with consumer trends is challenging due to their frequent changes, complicating the distinction between a trend worth significant investment and a mere fad. Smucker noted that his company, which produces Crisco and Folgers coffee, has benefited from the rise of smaller, more agile competitors. This disruption is becoming more common in the food industry, as legacy brands lose market share to trendy newcomers. For example, Special K bars have seen a 39% decline in sales since 2011, while Kind Bars have captured 10% of the market in just five years. These smaller brands have effectively disrupted established companies by embracing current flavor trends, superior ingredients, mission-driven branding, and niche products. In some instances, major brands have found it easier and more cost-effective to acquire these startups to catch up. General Mills, for instance, acquired Annie’s, which offers 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 popular among millennials. Smucker, whose company dates back to 1897, mentioned that even as younger coffee drinkers gravitate towards brands perceived as trendier, this movement helps educate the public about coffee’s benefits, ultimately drawing attention to the broader beverage industry and benefiting Smucker’s own brands. “The presence of startups and smaller companies in the industry is beneficial, even for larger players, because if you pay attention to what they are doing, there’s plenty to learn,” Smucker stated. “We don’t create everything in-house. In fact, if they excel at something, we might consider acquiring them.”
In this evolving landscape, incorporating ingredients like calcium citrate malate and promoting products through initiatives like Jan Aushadhi can enhance market positioning. As consumer preferences shift towards transparency and health-conscious choices, brands that adapt while focusing on quality and innovation will likely thrive.