The great post-pandemic food reversion is underway, where consumers are eating a lot more in restaurants and partying, and a lot less panicking Lucky Charms in the kitchen at 2 a.m. than they were a year ago. year.
For General Mills, whose portfolio includes eight different brands at $ 1 billion and above, including Betty Crocker, Cheerios, Pillsbury and Old El Paso, the change saw its latest sales results drop 10% for the three months ending May 30, the society reported Wednesday (June 30).
Still, the company said that while the coming year will see a drop in demand for home food products, it will still remain higher than before the pandemic.
“Although in some corners people thought that demand would somehow fall off a cliff when people start returning to the office again, getting back to normal before the pandemic, we actually think some of these behaviors will be sticky, and that’s what we saw, ”Jeff Harmening, CEO of General Mills, said on a call with analysts. He then clarified, “More people are going to work from home more often than going to the office every day, and we’re pretty sure it’s here to stay… [also,] many millennials really got cooking skills and baking skills and a newfound confidence in cooking, and they found they could save money just by doing it.
The “meals and pastries” category in the United States saw the most dramatic drop in sales, dropping 30% in the quarter – which makes sense, given the stress-induced baking trend over the years. first months of quarantine – while grain sales in the United States were down 16 percent. All US categories sold less than last year (although sales in Canada were up 3 percent). The widespread decline suggests a sharp drop in the number of consumers purchasing food for home consumption in April and May.
The company’s last quarter ended on May 30, and the decline in sales was much larger than that of its competitors. Post, for example, saw only one 0.7% decrease in sales during its most recent quarter, which ended on March 31, and the Kellogg Company seen his sales increase by 5 percent for the quarter ending April 3.
The news of these falling sales comes as grocery store visits are down (both month-over-month and year-over-year) as restaurants register record seating , with visits skyrocketing not only above 2020 levels, but also compared to the pre-pandemic. . As a result, General Mills expects OOH sales (which only account for about 10 percent of the company’s sales) to increase. Interestingly, however, despite the restaurant boom in recent months, the company does not expect out-of-home demand to reach pre-pandemic levels.
Part of the problem for packaged food brands like General Mills may not just be the return to restaurants, but also the fact that restaurants have gained a significant chunk of consumer spending on food. home. PYMNTS research from a survey of over 5,000 U.S. consumers – published in The Bring-It-to-Me Economy: How Online Marketplaces and Aggregators Drive Omnichannel Commerce, created in collaboration with Carat through Fiserv – finds that dining out at home is here to stay. The study notes that two-thirds of consumers now order restaurant meals to eat at home, and that restaurant patrons are 31% more likely to order for off-site consumption than on-site.
“As we emerge from the pandemic, it is clear that consumer behaviors are not returning to what they once were,” Harmening said. “Simply put, we are ending one period of significant consumer disruption to start another. “