Big Food is eager to hit the reset button on its narrative with investors, who have soured on the group amid the spread of the Ozempic craze and consumer disapproval of still-inflationary prices.
Enter CAGNY, formally known as the Consumer Analysts Group's annual conference in New York.
The action is in full swing in Boca Raton, Florida, where major packaged food brands with impressive dividends like PepsiCo (PEP), Coca-Cola (KO), Hershey's (HSY), Conagra Brands (CAG), and Molson Coors ( TAP). , among others provide.
While the conference is scheduled to continue through Friday, I've noticed some early themes from being here on the ground chatting with sources and participating in the presentations:
Eyes on size: While Americans are cutting back on the amount they are buying due to rising prices (see chocolate), a rebound in volume is in focus. Executives at both General Mills (GIS) and Conagra were “reluctant to comment on whether fiscal 2025 (which begins in June) could mark a return to growth in line with long-term goals,” wrote David Palmer, an analyst. Evercore ISI, in a note to clients. From the event.
Hershey and Mondelēz (MDLZ) has called for “pricing package architecture” with offerings of varying size and price points, as another potential growth tool. “We've always benefited from having different price points and different package sizes so that there is access for everyone,” said Michelle Buck, CEO of The Hershey Company.
Innovation as well as marketing with new partners are other key methods to re-engage consumers. For example, Hershey's thrilled the audience with NBA legend Shaquille O'Neal to announce a partnership to “win” in the gummy candy sector, the fastest growing confectionery sector. Conagra Brands shared that Dolly Partons' baking line is expanding to frozen shelves.
Possibility of trades: M&A talk is still alive and well, and it's not too far behind Campbell Soup's (CPB) big deal for pasta sauce maker Sovos Brands and J.M. Smucker's (SJM) purchase of Twinkie King Hostess Brands.
Although no major announcements have been made (yet), many companies are expressing openness to the idea of deals, but are waiting for the right company to come along at the right price.
This may not be a traditional takeover one might think. John Baumgartner, managing director of Mizuho Securities, told me that similar to Walmart's acquisition of Vizio this week, perhaps you could see “staple food companies acquiring different technology companies” to get a deeper understanding of consumers.
“Beer aficionado. Gamer. Alcohol fanatic. Evil food trailblazer. Avid bacon maven.”