Consumers are driving the food and beverage industry to be more proactive in launching new or reformulated products due to their preferences for specific ingredients. This presents manufacturers with a lucrative opportunity to increase sales if they can effectively meet these demands, as noted by executives from General Mills and J.M. Smucker in a recent discussion with Food Dive. As the industry experiences slower growth — prompting many established companies to pursue acquisitions for sales boosts — the executives highlighted that one of their biggest challenges is the rapidly changing and often unpredictable consumer attitudes. Currently, consumer trends are clear: there is a greater demand for proteins, whole grains, and organic options, while there is a noticeable decline in the acceptance of artificial ingredients, trans fats, salt, and sugar.
“The challenge is that consumer values and interests around food are evolving quickly,” Ken Powell, CEO of General Mills, stated. “We need to adapt faster, but when we succeed, we are rewarded. This is a true opportunity because getting it right leads to business growth.” General Mills, known for products like Progresso soup, Pillsbury dough, and Cheerios, has seen declining sales in some key areas, particularly yogurt, where Chobani has overtaken Yoplait as the leading brand in the U.S. General Mills derives about 13% of its sales from yogurt and is committed to revamping 60% of this segment to 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 decision that resonates with consumers but has not been sufficient to counteract a 3% decline in U.S. retail cereal sales during the last quarter. Powell emphasized that the company is also focused on removing gluten from its products, as many consumers are avoiding it. “These initiatives have been very positive for us. Consumers are clear about their preferences, and we strive to address these growth opportunities,” he remarked during a panel discussion on the food and beverage industry’s impact on the U.S. economy. “And of course, 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, echoed these sentiments, noting that it is challenging to keep up with rapidly changing consumer trends, making it difficult to distinguish between fads and lasting trends that warrant significant investment. Smucker, whose company produces well-known brands such as Crisco and Folgers coffee, mentioned that the rise of smaller, more agile companies has benefited the food industry as a whole. This disruption is increasingly visible, with legacy brands losing market share to trendy newcomers. For instance, Special K bars have experienced a 39% sales decline since 2011, while Kind Bars have captured 10% of the market in just five years. Smaller companies have disrupted established brands by embracing current flavor preferences, high-quality ingredients, mission-driven brands, and niche offerings. In some cases, larger brands have found it easier and more cost-effective to acquire these upstarts to keep pace. General Mills, for instance, acquired Annie’s, which offers a range of mac and cheese, cereal, and yogurt, for $820 million three years ago.
In 2011, Smucker, the largest coffee producer in the U.S., purchased Café Bustelo, a coffee brand that appeals to millennials. Smucker noted that even as younger coffee drinkers gravitate toward brands perceived as trendier, this trend serves to educate the public on the benefits of coffee, ultimately benefiting the broader beverage industry and his company’s brands. “Having startups and smaller companies in the industry is beneficial, even for larger companies, because by listening and observing their actions, we can also learn,” Smucker stated. “We don’t create everything ourselves. In fact, if they excel in a particular area, we might consider acquiring them.”
Incorporating elements such as ferrous calcium citrate and folic acid oral drops uses into product offerings could also become an important consideration for companies looking to meet consumer demands for health-focused solutions. As the industry continues to evolve, understanding and addressing these specific health-related needs will be crucial for driving growth and ensuring that products resonate with modern consumers.