Latest news with #Harmening
Yahoo
6 days ago
- Business
- Yahoo
General Mills initiates 'transformation' programme with embedded costs
General Mills has revealed a 'global transformation' programme that will incur costs of around $130m as the US food major seeks to boost productivity. In a filing with the US Securities and Exchange Commission yesterday (27 May), the Blue Buffalo pet food and Cheerios cereals brand owner said the 'multi-year' plan was approved by management on 20 May. It is 'intended to drive increased productivity by enhancing end-to-end business processes, enabled by targeted organisational actions'. Although light on detail, the initiative comes on the back of a poor set of results reported in March for the third quarter of General Mills' current 2025 fiscal year. And the company suggested yesterday the transformation programme will be accompanied by job cuts. Sales for the period dropped 5% in organic terms, a performance the company admitted fell short of 'expectations', with volumes down four percentage points. At the same time, General Mills downgraded its full-year guidance for a flat-to-higher print confirmed at the second-quarter stage in December. The Pillsbury cookies maker now expects organic sales to be down 1.5% to 2%. General Mills said yesterday that of the expected $130m in total charges, about $70m will be booked in the fourth quarter of 2025, 'primarily reflecting severance expenses'. The Old El Paso Mexican brand owner explained in the filing: 'The company anticipates that the series of actions related to the transformation initiative will be substantially completed by the end of fiscal 2028 and will result in total charges of approximately $130 million, of which approximately $120 million will be cash.' General Mills did not reveal any further details but implied in yesterday's filings that the initiative could have more in-depth implications. 'The estimate of costs that the company expects to record, and the timing thereof, are subject to a number of assumptions and actual results may differ from current expectations,' the publicly listed business added. 'The company may also record other charges or cash expenditures not currently contemplated due to events that may occur as a result of, or associated with, the transformation initiative.' Discussing the third-quarter results in March, chairman and CEO Jeff Harmening made a pledge to reinvest $100m from targeted savings in the 2026 financial year. 'We're reviewing new cost-efficiency initiatives that are anticipated to generate at least $100 million in additional savings in fiscal '26, with further savings expected in fiscal '27 and beyond,' Harmening explained. 'Our number one priority is to accelerate our organic sales growth by delivering remarkable consumer experiences across our leading food brands, resulting in stronger volume and improved market share performance.' General Mills is on target to generate 5% in cost-of-goods sold savings in the current year through the company's Holistic Margin Management (HMM) programme and expects to repeat that in fiscal 2026, equating to more than $600m in 'gross productivity savings', Harmening said in March. "General Mills initiates 'transformation' programme with embedded costs" was originally created and published by Just Food, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
Yahoo
01-05-2025
- Business
- Yahoo
Why are people snacking less? Sales of chips, munchies are dropping
Americans are grabbing for snacks less – and it appears to be for a variety of reasons, including worries about money, the desire to eat healthier and reduce artificial dyes as well as the increased use of prescription drugs that suppress the urge to munch in between meals. Executives for several large brand-name snack companies, including the makers of Doritos and DingDongs, have said their sales have been affected by shoppers buying fewer snack products. "We're seeing several forces converge that are reshaping consumer snacking behavior," said David Ortega, a food economist and professor at Michigan State University. "Price fatigue is setting in after several years of sharp increases, and there's growing uncertainty about future food costs, especially as new tariffs threaten to drive prices even higher," Ortega told USA TODAY. That combination is prompting shoppers to cut back, trade down to lower-cost products or become more aggressive in seeking out deals, he said. But there's also a broader shift toward healthier eating habits, which together with economic trends, is changing how and what people snack on, Ortega said. "Consumers aren't just snacking less ‒ they're becoming more selective, favoring snacks with stronger nutritional profiles," he said. "The adoption of GLP-1 medications like Ozempic and Wegovy is accelerating these changes, with appetite suppression leading to lower overall grocery spending and a sharper decline in purchases of highly processed and unhealthy snacks." Several food-company executives have referenced the slowdown in snacking in their recent earnings calls with analysts. General Mills CEO Jeff Harmening said in late March that sales were down for salty snacks, grain snacks and fruit snacks. "Our view is that a lot of that has to do with consumer confidence," he said. While GLP-1 use for drugs like Ozempic is increasing, Harmening said, the numbers didn't change much from quarter to quarter. But Harmening said General Mills was also seeing the same sales decline in its dog food brand. "To my knowledge, there is not GLP-1s for dog treats," he said during a call with analysts. "Our belief," he said, "is that consumers have become much more value conscious." Mark Smucker, CEO, president and board chairman of J.M. Smucker, said in February that the company's sales of Hostess snacks were down, in part, due to "consumers continuing to be selective in their spending, largely driven by inflationary pressures and diminished discretionary income." PepsiCo, the owner of snack brands such as Frito-Lay and Doritos, became the latest company to say consumers were buying fewer snacks. The company, in prepared remarks with its latest earnings report on April 25 , said its North America savory snack performance – primarily Frito-Lay – remained "subdued." "Consumers have remained value-conscious across brands and channels as the cumulative impacts of inflationary pressures have strained budgets and altered food shopping patterns," the company said in those remarks. Consumers are not only snacking less, they're snacking differently, said Rob Dongoski, global lead for food and agribusiness at Kearney, a strategy and management consulting firm. Many of the companies that are saying their sales are down are in the "ultra-processed category" of food "and that's where consumers are trending away from," Dongoski told USA TODAY. "Does that mean they're not picking up a bit of a small serve yogurt or some beef jerky or a handful of pistachios? It's a different kind of snacking," he said. There are three forces pressuring the food category now, said Dongoski: consumers wanting to eat healthier; the Make American Healthy Again Commission under President Donald Trump and Health Secretary Robert F. Kennedy Jr., which is initiating efforts to phase out petroleum-based synthetic dyes from food; and GLP-1 drugs which suppress appetite. "Snacking gets right in the crosshairs," Dongoski said. Study: Consumers worried about tariffs are pulling back on spending Dongoski said he believes consumers are mostly pulling away from snack foods to be healthier and it is not as economy driven, at least in the short term. He believes the U.S. is "really at the precipice of some pretty significant change in the food system," which has been building for some time but is starting to show up in slower sales of snacks by major companies. There are also generational influences at play, he said. Gen Xers are getting closer to retirement and are thinking about their health. Gen Zers and Millennials also have a very different attitude about food than their older peers at the same age and are looking for healthier options, Dongoski said. In the latest quarterly Consumer Stress Index by the Kearney Institute, which provides insights into how consumers are feeling, shoppers said they were wary of spending, due to the rising costs of goods overall and tariff worries. Consumers were moving from optimizing to sacrificing and taking on a "wait-and-see" stance about spending, said Katie Thomas who leads the think tank. As consumers are watching their finances and stressed about their budgets, the snack category is the easiest to drop, said Chris Costagli, vice president and food insights lead for NielsenIQ. Costagli has been running a study of about 1,000 consumers monthly since January to gauge their sentiments on a variety of food-buying issues. In a report to be released soon, Costagli said 43% of those surveyed in April said they were cutting back on buying snack foods and 38% were looking for deals more often. Thirty-seven percent of people also said their impulse purchases at the grocery store were down and 17% said they were buying fewer premium or indulgent snacks, such as a candy bar, he said. Those numbers continue to increase each month, Costagli told USA TODAY. Robin Wenzel, group head of the Wells Fargo Agri-Food Institute, agreed that more shoppers, concerned about both their health and their budgets, are dropping snacks off the shopping list. "While inflation and rising costs have made U.S. consumers more intentional with their food purchases, prioritizing essentials over discretionary items, preferences also seem to be shifting," she told USA TODAY, also pointing to GLP-1s and recent action to remove certain additives and dyes from the food system. " U.S. consumers are rethinking eating habits and seeking out nutrient-dense food options, including snacks, causing this rebalance." Betty Lin-Fisher is a consumer reporter for USA TODAY. Reach her at blinfisher@ or follow her on X, Facebook, or Instagram @blinfisher and @ on Bluesky. Sign up for our free The Daily Money newsletter, which will include consumer news on Fridays, here. This article originally appeared on USA TODAY: Why are consumers snacking less? We explain. Sign in to access your portfolio
USA Today
30-04-2025
- Business
- USA Today
Why are people snacking less? Sales of chips, munchies are dropping
Americans are grabbing for snacks less – and it appears to be for a variety of reasons, including worries about money, the desire to eat healthier and reduce artificial dyes as well as the increased use of prescription drugs that suppress the urge to munch in between meals. Executives for several large brand-name snack companies, including the makers of Doritos and DingDongs, have said their sales have been affected by shoppers buying fewer snack products. "We're seeing several forces converge that are reshaping consumer snacking behavior," said David Ortega, a food economist and professor at Michigan State University. "Price fatigue is setting in after several years of sharp increases, and there's growing uncertainty about future food costs, especially as new tariffs threaten to drive prices even higher," Ortega told USA TODAY. That combination is prompting shoppers to cut back, trade down to lower-cost products or become more aggressive in seeking out deals, he said. People are looking for healthier foods But there's also a broader shift toward healthier eating habits, which together with economic trends, is changing how and what people snack on, said Ortega. Need a break? Play the USA TODAY Daily Crossword Puzzle. "Consumers aren't just snacking less — they're becoming more selective, favoring snacks with stronger nutritional profiles," he said. "The adoption of GLP-1 medications like Ozempic and Wegovy is accelerating these changes, with appetite suppression leading to lower overall grocery spending and a sharper decline in purchases of highly processed and unhealthy snacks." Makers of popular snack brands say sales are down Several food-company executives have referenced the slowdown in snacking in their recent earnings calls with analysts. General Mills CEO Jeff Harmening said in late March that sales were down for salty snacks, grain snacks and fruit snacks. "Our view is that a lot of that has to do with consumer confidence," he said. While GLP-1 use for drugs like Ozempic are increasing, Harmening said, the numbers didn't change much from quarter to quarter. But Harmening said General Mills was also seeing the same sales decline in its dog-food brand. "To my knowledge, there is not GLP-1s for dog treats," he said during a call with analysts. "Our belief," he said, "is that consumers have become much more value conscious." Mark Smucker, CEO, president and board chairman of J.M. Smucker, said in February that the company's sales of Hostess snacks were down, in part due to "consumers continuing to be selective in their spending, largely driven by inflationary pressures and diminished discretionary income." PepsiCo, the owner of snack brands such as Frito-Lay and Doritos, became the latest company to say consumers were buying fewer snacks. The company, in prepared remarks with its latest earnings report on April 25 , said its North America savory snack performance – primarily Frito-Lay – remained "subdued." "Consumers have remained value-conscious across brands and channels as the cumulative impacts of inflationary pressures have strained budgets and altered food shopping patterns," the company said in those remarks. Consumers are snacking differently Consumers are not only snacking less, they're snacking differently, said Rob Dongoski, global lead for food and agribusiness at Kearney, a strategy and management consulting firm. Many of the companies that are saying their sales are down are in the "ultra-processed category" of food "and that's where consumers are trending away from," Dongoski told USA TODAY. "Does that mean they're not picking up a bit of a small serve yogurt or some beef jerky or a hand full of pistachios? It's a different kind of snacking," he said. There are three forces pressuring the food category now, said Dongoski: consumers wanting to eat healthier; the Make American Healthy Again Commission under President Donald Trump and Health Secretary Robert F. Kennedy, Jr. which is initiating efforts to phase out petroleum-based synthetic dyes from food; and GLP-1 drugs which suppress appetite. "Snacking gets right in the crosshairs," said Dongoski. Dongoski said he believes consumers are mostly pulling away from snack foods to be healthier and it is not as economy driven, at least in the short term. He believes the U.S. is "really at the precipice of some pretty significant change in the food system," which has been building for some time but is starting to show up in slower sales of snacks by major companies. There are also generational influences at play, he said. Gen Xers are getting closer to retirement and are thinking about their health. Gen Zers and Millennials also have a very different attitude about food than their older peers at the same age and are looking for healthier options, Dongoski said. Tariffs are weighing on treats In the latest quarterly Consumer Stress Index by the Kearney Institute, which provides insights into how consumers are feeling, shoppers said they were wary of spending, due to the rising costs of goods overall and tariff worries. Consumers were moving from optimizing to sacrificing and taking on a "wait-and-see" stance about spending, said Katie Thomas who leads the think tank. Snacks are easiest to take off a shopping list As consumers are watching their finances and stressed about their budgets, the snack category is the easiest to drop, said Chris Costagli, vice president and food insights lead for NielsenIQ (NIQ). Costagli has been running a study of about 1,000 consumers monthly since January to gauge their sentiments on a variety of food-buying issues. In a report to be released soon, Costagli said 43% of those surveyed in April said they were cutting back on buying snack foods and 38% were looking for deals more often. Thirty-seven percent of people also said their impulse purchases at the grocery store were down and 17% said they were buying fewer premium or indulgent snacks, such as a candy bar, he said. Those numbers continue to increase each month Costagli told USA TODAY. Robin Wenzel, group head of the Wells Fargo Agri-Food Institute, agreed that more shoppers, concerned about both their health and their budgets, are dropping snacks off the shopping list. "While inflation and rising costs have made U.S. consumers more intentional with their food purchases, prioritizing essentials over discretionary items, preferences also seem to be shifting," she told USA TODAY, also pointing to GLP-1s and recent action to remove certain additives and dyes from the food system. " U.S. consumers are rethinking eating habits and seeking out nutrient dense food options, including snacks, causing this rebalance." Betty Lin-Fisher is a consumer reporter for USA TODAY. Reach her at blinfisher@ or follow her on X, Facebook or Instagram @blinfisher and @ on Bluesky. Sign up for our free The Daily Money newsletter, which will include consumer news on Fridays, here.
Miami Herald
21-03-2025
- Business
- Miami Herald
Cheerios, Lucky Charms owner sounds alarm on growing problem
General Mills (GIS) , which owns large food brands such as Cheerios, Lucky Charms, Pillsbury, Häagen-Dazs, etc., has noticed a startling change in customer behavior, and the company is sounding the alarm on the root cause of the problem. General Mills' third-quarter earnings report for fiscal year 2025 revealed that its net sales during the quarter were down by 5% year-over-year. Specifically in the U.S., retail sales declined by 7%, with morning foods, snacks, meals and baking solutions all facing a decrease in sales. Get expert insights and actionable trade alerts from veteran investing experts and hedge fund managers. Join TheStreet Pro today and get the first month FREE This shrinkage in sales contributed to General Mills' operating profit, which is a company's profit after paying operating expenses, to decline by 2% year-over-year. Related: Bounty, Tide, Dawn owner issues stern warning about its pricing During an earnings call on March 19, General Mills CEO Jeffrey Harmening flagged that the company noticed that customers were pulling back on snacking more than they did during the 2008 recession. "Food at home is now elevated vis-a-vis what it was in 2008," said Harmening during the call. He also said that the number of customers opting to prepare food at home increased during the COVID-19 pandemic, and now that the pandemic is over, that number has spiked even more. "Pre-pandemic food-at-home consumption was about 83% of occasions," said Harmening. "It is now 87% and has been 87% for a long time. And so, what has changed is that in prior periods like we're experiencing now with consumer confidence, we had a lower percentage of people eating at home, and that increased as they got more anxious." Many consumers across the country have indeed been shifting their focus on cooking food at home amid inflation and higher costs of living. According to a recent survey from The Harris Poll and Flashfood, 81% of Americans said saving money on food is a priority for them this year. Also, 89% of Americans in the survey believe that cooking food at home doesn't just have cost-saving benefits, but it is also healthier. Related: Dollar General CEO flags alarming shift in customer behavior Many Americans have also recently been cutting processed foods out of their diets. A recent survey from the International Food Information Council found that 63% of Americans avoid processed foods, while more than half follow a vegan, vegetarian, or plant-based diet in an effort to be healthier. During the call, Harmening also noted that consumers have become more "value conscious" and are scaling back spending on discretionary items at grocery stores. "If you look at the rest of the grocery store, you would see that things that are staples are the ones that are growing faster than things that are more discretionary," said Harmening. "And so, staples like baking staples, for example, and some of the items on the perimeter, those are growing faster because they produce more value." Amid this concerning trend, Harmening said that General Mills will focus on emphasizing the value of its products to win back customers, and that doesn't mean solely focusing on lowering prices. "It really is about getting the value right," said Harmening. "And beyond that, it really is about talking about the benefits of our products. In some cases, that's functional benefits like protein. In other places, like Pillsbury biscuits, it's about how flaky they are. When it comes to Betty Crocker, maybe how chocolaty they are. So, it really depends brand by brand, the benefits they're looking for." More Retail: Target's latest policy change sparks massive boycott threatBounty, Tide, Dawn owner issues stern warning about its pricingGameStop makes a drastic move amid weak sales General Mills is expecting its organic net sales for the first quarter of this year to decline by 1.5% to 2% after previously expecting sales to be flat or up by 1%. The company is also expecting its operating profit to shrink by 7% to 8%. General Mills' grim outlook on sales comes at a time when it is facing a significant boycott threat from consumers. The People's Union, which has planned "economic blackouts" and boycotts of companies such as Amazon, Walmart, and Nestle this year, has a General Mills boycott scheduled between April 21-28. The organization, which has gone viral on social media, has been targeting large companies it believes have allegedly harmed consumers through corrupt practices. "Mega corporations have driven up prices, underpaid their workers, and outsourced jobs while raking in record profits," said The People's Union on its website. Related: Veteran fund manager unveils eye-popping S&P 500 forecast The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Axios
19-03-2025
- Business
- Axios
The snacking recession: Why Americans are buying fewer treats
Americans are snacking less — and that's a problem for the packaged food industry. Why it matters: After years of inflation, consumers are recoiling, fed up with food price increases and suddenly immersed in economic uncertainty. Driving the news: General Mills on Wednesday became the latest food giant to sound the alarm about what CEO Jeff Harmening called a "slowdown in snacking." The company's net sales fell 5% in its latest quarter, with U.S. snacks sales down "mid-single digits." "Our view is that a lot of that has to do with consumer confidence," Harmening said. State of play: Other signs of a snacking slowdown: J.M. Smucker's sales of sweet baked snacks fell 7% in the company's most recent quarter to $278.6 million. Campbell's Company CEO Mick Beekhuizen noted "softness in some of our snacking categories" earlier this month, as organic net sales declined by 3% in its most recent quarter. Sales fell 4.3% for U.S. convenience stores in the year ended Feb. 23, according to market-research firm Circana cited by WSJ. What we're watching: Product innovation and price cuts are possible as companies look to reenergize sales, CFRA Research analyst Arun Sundaram tells Axios. "We're in this limbo period where volumes are still soft and price increases aren't benefiting the top line anymore," he says. Caveat: It's not just snacks that are suffering. Two major discount retailers sounded the alarm recently of a broader pullback among lower-income consumers. "Many of our customers report that [they] only have enough money for basic essentials, with some noting that they have had to sacrifice even on the necessities," Dollar General CEO Todd J. Vasos said last week on an earnings call. Walmart has seen a similar trend. "You can see that the money runs out before the month is gone," CEO Doug McMillon told the Economic Club of Chicago two weeks ago. Maybe a smidge, but not in meaningful amounts, most execs say. Harmening noted on an earnings call that General Mills even experienced a decline in sales of dog snacks — "and to my knowledge, there is not GLP-1s for dog treats."
