General Mills and Campbell’s see a snack slowdown

General Mills, which reported its earnings on Wednesday, said its organic net sales are expected to drop 2% to down 1.5% this fiscal year, compared to a flat rate the previous year. 

In a release, CEO Jeffrey Harmening said the company’s weaker-than-expected revenue was “driven largely by greater-than-expected retailer inventory headwinds and a slowdown in snacking categories.” Harmening added that customers are also seeking value at this time, and so the company will focus on larger pack sizes and other innovations to attract shoppers.

General Mills isn’t the only major food company to see a slowdown in snacking. 

Campbell’s reported its second fiscal quarter earnings in early March, which showed its snack segment’s net sales were down 6% year-over-year. The company owns snack brands like Goldfish crackers, Pepperidge Farm and Snack Factory, among others. Total snacks consumption for Campbell’s’ lead brands declined by almost 1% in the second quarter, while the snack division’s operating earnings dropped 29% year-over-year.

Campbell’s also expects 2025 organic net sales to be flat or hit a 2% decline. The weak guidance was addressed during the earnings by Campbell’s CEO Mick Beekhuizen. “The slower-than-anticipated recovery of our snacking categories impacted the outlook for our second half,” Beekhuizen said. 

Some of the slowdown was due to unique factors related to the Campbell’s business. “The volume for our snacks business was down 370 basis points year over year,” Beekhuizen said. “About half was driven by a planned increase in commercial investment to support incremental promotional activity and marketing during the holiday season.” The other half, Beekhuizen said, was impacted by short-term supply chain headwinds on the company’s fresh bakery network, which increased manufacturing and logistics costs.

Moreover, when people are adding snacks to their shopping carts, they are increasingly opting for better-for-you options like nuts and nutrition bars.

According to data in Circana’s OmniMarket Total Store View’s reporting this week, consumers are still snacking, but there is a shift in what they are choosing to purchase. For instance, the Circana data shows that as of March 19, dollar sales of salty snacks, like potato chips and tortilla chips, grew by a modest 0.5% year-over-year. On the other hand, dried meat snacks like jerky experienced a 7.3% increase over the same period last year.

Jonathan Deutsch is a professor and the director of the Drexel Food Lab at Drexel University. Deutsch said, “There are a multitude of factors that may be shaping consumers’ ambivalence about the snack category and consumer packaged foods more broadly.” In turn, investors are also exhibiting a lukewarm response to snack categories, especially as concerns over outside factors grow.

“These include rising food, labor and fuel costs, and price volatility,” Deutsch said. He also pointed to the uncertainty and lack of clear science regarding how wider adoption of GLP-1 agonists may change snacking habits and cravings. 

Like other CPG conglomerates, General Mills has been incorporating dietary trends into its portfolio, such as mini sizes and protein snacks. In 2022, General Mills released miniature versions of its popular cereals, like Reese’s Puffs and Cinnamon Toast Crunch, to cater to on-the-go and snacking occasions. Last year, the company released a number of protein-filled versions of its popular cereals, including Wheaties Protein, which contains 22 grams of protein per serving. General Mills also collaborated with Ghost on a protein cereal.

While tight grocery budgets are indeed a factor, some industry watchers suspect that health is also becoming a bigger consideration when choosing snacks. 

According to The Consumer Trends 2025 report by Coefficient Capital and The New Consumer, Americans say their food and beverage consumption is being informed by concerns like weight, sleep and stress. Per The Consumer Trends report, 30% of respondents said processed and ultra-processed foods are their top concern when it comes to things they’re eating.

Anna Whiteman, principal at Coefficient Capital, said the overall data backs industry sentiment that weight and sugar intake are among people’s top health concerns right now. That puts ultraprocessed foods, which include many snack products, at risk of being cut from shopping lists among people focusing on whole foods and refocusing on home cooking. 

On the topic of better-for-you options, Deutsch added that “increased competition from smaller, innovative, less risk-averse brands are taking more market share.” He said that challenger brands are infiltrating the market at a time when the big players’ innovation pipelines are “lagging behind” changing dietary preferences. 

During the earnings call on Wednesday, Harmening was asked about how various factors, like GLP-1 usage and economic concerns, may have contributed to the snacking slowdown.

“I mean, yes, GLP-1 use is increasing. It’s about 10% of the adult population now, about 5% or so used for weight loss, which is up significantly from the year before. But it didn’t change that much quarter to quarter,” Harmening said.

But Harmening also said that, after the pandemic, customers have shifted to eating more at home. This has created a snack spending gap, even in comparison to past economic downturns such as the recession. That is, customers have already been saving money by eating more at home. Now, they are looking for other ways to cut down their grocery bill, and snacks could be one of the first things to go.

“If you look at the rest of the grocery store, you would see that staples are the products that are growing faster than things that are more discretionary,” he said.