FOOD PRODUCTS : Trading Off, Not Trading Down

Research evidence excerpt

FOOD PRODUCTS : Trading Off, Not Trading Down

Refinitiv

Value-seeking behavior continues to emerge

Since the summer of 2023, when Conagra observed that consumers were "hunkering

down", the industry has faced a seemingly endless stream of value-seeking behaviors.

Indeed, just a few months ago, General Mills observed consumers were waiting to buy

on promotion, a behavior that has since been documented by BellRing Brands.

Figure 1: The industry has faced a seemingly endless stream of value-seeking behaviors

Company Date Commentary

“One behavior shift we've heard about from consumers is just buying fewer items overall, more of a hunkering

down than a trading down. There are several potential reasons as to why, including this summer being more travel

Conagra 07/13/2023 intensive than last year. Overall, we view this dynamic as likely temporary behavior shift for consumers to stretch their

budgets, but we have captured it as a near-term headwind in our outlook.” – Sean Connolly (CAG CEO), F4Q23

Conference Call

“In terms of consumer behavior, I'd say the shift that we're starting to see is consumers are really maximizing their

pantries. They're closely managing their household inventories, their pantry inventories, zealously guarding

against waste, as you would expect in this environment. And so we haven't seen shifts out of our category really. Kellanova 08/03/2023

We haven't seen meaningful moves in private label or anything like that. I would just say a consumer that's ever

more conscious of the strains on their household budgets, and we would expect that to continue moving forward.” – Steve

Cahillane (Former K CEO), 2Q23 Conference Call

“Consumers across the income spectrum are making budgetary trade-offs and shopping differently this year.