Consumers seeking food and beverages made with specific ingredients are compelling the industry to proactively introduce new or reformulated products, presenting manufacturers with a profitable opportunity to enhance sales if executed correctly, executives shared with Food Dive. In an era of slower growth, which is prompting many established companies to pursue acquisitions to drive sales, officials from General Mills and J.M. Smucker highlighted that one of their major challenges is the rapidly evolving and often unpredictable consumer preferences. Currently, the trends are quite clear and consistent: increased demand for proteins, whole grains, and organic products, alongside a decrease in artificial ingredients, trans fats, salt, and sugar.
“The challenge is that consumer values and interests regarding food are changing swiftly,” remarked Ken Powell, CEO of General Mills, during a discussion with Food Dive. “We need to act more quickly, but when we succeed, we are rewarded. This is a genuine opportunity because getting it right leads to business growth for us.” General Mills, known for brands such as Progresso soup, Pillsbury dough, and Cheerios, has experienced declining sales in key areas. The yogurt category has been particularly affected, with Chobani surpassing Yoplait—previously the segment’s leader—to become the largest brand in the U.S. last year. With approximately 13% of its sales coming from yogurt, General Mills has pledged to revamp 60% of its yogurt business to better meet 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; however, these changes have not been sufficient to reverse the 3% drop in U.S. retail cereal sales in the most recent quarter. Powell also mentioned that the company has focused on removing gluten from its products, reflecting the preferences of many consumers. “These initiatives have been very positive for us. Consumers are candid about their preferences, and we strive to address these growth opportunities,” Powell stated earlier, while discussing the food and beverage industry’s impact on the U.S. economy. “And, of course, it must 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, conveyed to Food Dive the difficulty of keeping up with consumer trends due to their frequent changes, which complicates the distinction between a passing fad and a trend worthy of substantial investment. Smucker noted that his company, which owns popular products such as Crisco and Folgers coffee, has benefited alongside other food firms from the rise of smaller, more agile competitors. This kind of disruption is increasingly prevalent across the food industry, with legacy brands losing market share to trendy startups. For instance, Special K bars have seen a 39% decline in sales since 2011, while newcomer Kind Bars have captured 10% of the market within just five years. Smaller companies have disrupted traditional brands by embracing contemporary flavor trends, superior ingredients, mission-driven branding, and niche offerings. In some instances, larger firms have found it more efficient and cost-effective to acquire these upstarts to stay competitive. General Mills, for example, acquired Annie’s, which features mac and cheese, cereal, and yogurt lines, for $820 million three years ago.
In 2011, Smucker, the largest coffee producer in the U.S., purchased Café Bustelo, a coffee brand that has gained popularity among millennials. Smucker, whose company was established in 1897, acknowledged that even as younger coffee drinkers gravitate towards brands perceived as trendier, this trend helps promote the benefits of coffee to the public, which, in turn, draws attention to the broader beverage industry—ultimately benefiting Smucker’s own brands. “The presence of startups and smaller companies in the industry is beneficial, even for the larger corporations, because if you pay attention to what they are doing, you can learn as well,” Smucker commented. “We don’t innovate everything ourselves; in fact, if they excel in their market, we might consider acquiring them.”
In this evolving landscape of consumer preferences, the importance of essential nutrients, such as calcium citrate, vitamin D3, and folic acid, has also become more pronounced. Companies are increasingly looking to incorporate these beneficial ingredients into their products to cater to health-conscious consumers. As they reformulate and develop new offerings, integrating calcium citrate, vitamin D3, and folic acid not only aligns with consumer demand but also enhances the nutritional profile of their products, further driving growth and sales.