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Big food companies are eager to hit the reset button on their narrative with investors, who have soured on the group amid the spread of the Ozempic craze and consumers balking at still-inflationary prices.
Enter CAGNY, more formally known as the annual conference of the Consumer Analyst Group of New York.
The event is already underway in Boca Raton, Florida, where major packaged food brands with juicy dividend payouts like PepsiCo (PEP), Coca-Cola (KO), Hershey’s (HSY), Conagra Brands (CAG), Molson Coors (TAP), among others are presenting.
While the conference is scheduled to run through Friday, I’ve picked up some initial themes from being here on the ground chatting with sources and attending presentations:
Eyes on the volume: As Americans reduce the amount they buy due to high prices (see chocolate), volume recovery is in the spotlight. Executives at General Mills (GIS) and Conagra “were hesitant to comment on whether fiscal 2025 (which begins in June) could be a return to growth in line with long-term goals,” Evercore ISI analyst David Palmer wrote. , in a note to clients. of the event.
Hershey and Mondelēz (MDLZ) appealed to “bundled pricing architecture” with offerings of different sizes and prices, as another potential growth lever. “We’ve always taken advantage of having different price points and different package sizes so there’s accessibility for everyone,” said Hershey CEO Michele Buck.
Innovation and marketing with new partners are other key tactics to re-engage consumers. Hershey’s, for example, thrilled the crowd with NBA legend Shaquille O’Neal in attendance to announce a partnership to “win” in the gummy segment, the fastest-growing candy segment. Conagra Brands shared that Dolly Partons’ baking line is expanding into frozen shelves.
The potential for agreements: M&A talks are alive and well, not far behind Campbell Soup’s (CPB) big deal for pasta sauce maker Sovos Brands and JM Smucker’s (SJM) purchase of Twinkie king Hostess Brands.
While no major announcements have been made (yet), many companies tease that they are open to the idea of deals, but are waiting for the right company at the right price to come along.
However, it may not be a traditional acquisition, as you might think. Mizuho Securities CEO John Baumgartner told me that, similar to Walmart’s acquisition of Vizio this week, perhaps “staple food companies could be seen acquiring differentiated technology companies” to gain insight. of consumers.