Big Food is eager to hit the reset button on its narrative to investors disgruntled with the group as the Ozempic trend spreads and consumers balking at still-inflationary prices.
Enter CAGNY, better known as the annual conference of the Consumer Analyst Group of New York.
The event is in full swing in Boca Raton, Florida, where major packaged food brands are making hefty dividend payouts such as PepsiCo (PEP), Coca-Cola (KO), Hershey's (HSY), Conagra Brands (CAG), Molson Coors (TAP) , among other things, present.
While the conference is scheduled to run through Friday, a few early themes have stood out to me as I've been on site, interviewing sources and attending presentations:
Eyes on volume: While Americans are reducing their purchasing volumes due to high prices (see chocolate), the focus is on recovering volumes. Executives at General Mills (GIS) and Conagra “were hesitant to comment on whether fiscal 2025 (beginning in June) could be a return to growth consistent with long-term goals,” Evercore ISI analyst David Palmer wrote in a message to customers about the event.
Hershey and Mondelēz (MDLZ) cited a “price pack architecture” with different size and price offerings as another potential growth lever. “We have always benefited from having different pricing and pack sizes to make it accessible to everyone,” Hershey CEO Michele Buck said.
Innovation and marketing with new partners are other important tactics to re-engage consumers. Hershey's, for example, wowed the audience with NBA legend Shaquille O'Neal in attendance, declaring a duel for “win” in the gummy bear segment, the fastest growing candy segment. Conagra Brands said it is expanding Dolly Parton's baking line to frozen aisles.
The potential for deals: M&A talks are well underway, not too far off from Campbell Soup's (CPB) big deal for pasta sauce maker Sovos Brands and JM Smucker (SJM) buying Twinkie King Hostess Brands.
While no major announcements have been made (yet), many companies are teasing that they are open to the idea of deals but are waiting for the right company to come along at the right price.
However, it may not be a traditional purchase, one would think. John Baumgartner, managing director of Mizuho Securities, told me that similar to Walmart's acquisition of Vizio this week, we might see “staple staple companies acquiring differentiated technology companies” to gain a deeper understanding of consumers.