General Mills Sees Shift to Grocery Amid High Food Prices

General Mills is noticing that, with high food prices, consumers are eating more at home.

On a call with analysts Tuesday (Dec. 20) accompanying the company’s second-quarter fiscal 2023 earnings release, CEO Jeff Harmening offered an update on this trend, which the company observed earlier this year.

“It’s highly possible consumers will be under more pressure over the next six months, and when that happens, consumers tend to eat at home more rather than eat out more, and so it’s very possible we’ll continue to see trading into food eaten at home,” Harmening said.

Indeed, research from the August edition of PYMNTS’ Consumer Inflation Sentiment study, “Consumer Inflation Sentiment: Inflation Slowly Ebbs, but Consumer Outlook Remains Gloomy,” revealed that, in response to inflation, 78% of consumers are eating at home more.

In the second half of its fiscal year, the company predicted an inflationary environment that “may or may not be as robust as is now,” such that these trends will continue to affect consumer behavior.

Additionally, the company is wooing online grocery shoppers with increasingly targeted data-informed messaging. Take, for instance, the food giant’s fruit snacks business.

“We are leveraging our data and connected commerce capabilities to personalize our messages,” Harmening said in his prepared remarks. “Year-to-date, we’ve driven a 44% increase in our eCommerce retail sales on fruit snacks by optimizing our online shelf and consumer experience, leveraging [this] connected commerce capability.”

The news comes as food brands increasingly have the option to work with retailers and online sellers to see how consumers are purchasing their products. In the past year, eCommerce behemoth Amazon announced the launch of its Store Analytics service, DoorDash announced the launch of new self-serve advertising tools for consumer packaged goods (CPG) brands, Ahold Delhaize USA brought its retail media network in house, and grocery giant Kroger has been expanding its Kroger Precision Marketing (KPM) ad solutions.

Most recently, earlier this month, BJ’s Wholesale Club announced that it is launching BJ’s Media Edge, a Microsoft PromoteIQ-powered advertising initiative offering analytics-informed web, mobile and social media marketing solutions to brands.

These business aim to enable brands such as General Mills to capture consumers’ growing interest in online grocery options and to harness the data capabilities these channels provide. Research from the latest edition of PYMNTS’ monthly ConnectedEconomy™ study, “ConnectedEconomy™ Monthly Report: The Gender Divide Edition,” which drew from a survey of more than 2,600 U.S. consumers in October, found that 45% of men and 36% of women buy groceries online for curbside pickup. Meanwhile, 43% and 35%, respectively, order in advance for home delivery, and 42% and 28%, respectively, use same-day delivery aggregators.