Massive Meals is itching to hit the reset button on its narrative with traders, who’ve soured on the group amid the unfold of the Ozempic craze and customers balking at nonetheless inflationary costs.
Enter CAGNY, extra formally often called the annual Client Analyst Group of New York convention.
The occasion is nicely underway in Boca Raton, Florida, the place main packaged meals manufacturers with juicy dividend payouts comparable to PepsiCo (PEP), Coca-Cola (KO), Hershey’s (HSY), Conagra Manufacturers (CAG), Molson Coors (TAP), amongst others are presenting.
Whereas the convention is ready to run by Friday, I’ve noticed a number of early themes from being right here on the bottom chatting up sources and sitting in on shows:
Eyes on Quantity: As Individuals pull again on simply how a lot they’re shopping for due to excessive costs (see chocolate), the amount restoration is in focus. Execs at each Normal Mills (GIS) and Conagra have been “hesitant to touch upon whether or not fiscal 2025 (starting in June) may very well be a return to progress in step with long-term targets,” Evercore ISI analyst David Palmer wrote in a observe to shoppers from the occasion.
Hershey and Mondelēz (MDLZ) known as on “value pack structure” with completely different measurement and value level choices, as one other potential progress lever. “We have at all times capitalized on having completely different value factors, completely different pack sizes so that there is accessibility for everybody,” Hershey CEO Michele Buck mentioned.
Innovation in addition to advertising with new companions, are different key ways to re-engage customers. Hershey’s, for instance, excited the group with NBA legend Shaquille O’Neal in attendance to announce a tie-up to “win” within the gummy phase, the fastest-growing sweets phase. Conagra Manufacturers shared that Dolly Partons’ baking line is increasing into frozen cabinets.
The Potential for Offers: M&A chatter is alive and nicely, not too far faraway from Campbell Soup’s (CPB) massive deal for pasta sauce maker Sovos Manufacturers and J.M. Smucker (SJM) shopping for Twinkie king Hostess Manufacturers.
Whereas no main bulletins have been made (but), many corporations are teasing that they are open to the thought of offers, however are ready for the precise firm to come back alongside on the proper value.
It will not be a standard acquisition one would suppose although. Mizuho Securities managing director John Baumgartner advised me that much like Walmart’s acquisition of Vizio this week, maybe you might see “meals staples corporations buying differentiated tech corporations” to achieve a deeper understanding of customers.
