Consumers are seeking more value: General Mills President

There's growing concern about how inflation and high interest rates are impacting consumers' wallets. General Mills North America Retail (GIS) President Jon Nudi joins Yahoo Finance Live to discuss consumer trends and how General Mills is rising to the challenge. Nudi says that during the pandemic, “when consumers were at home more, that was good for our businesses.” Nudi states that various “moving pieces” are impacting sales for various food and beverage companies. With inflation still a concern, Nudi notes that many consumers are exhibiting “value seeking behavior” to get more at a lower cost.

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Video Transcript

- All right, let's zero in on the portfolio that you see, snacks and cereal. What does demand look like for your products?

JON NUDI: Yeah, it's been a really interesting demand environment. If you go back to the beginning of the pandemic, we've seen some of the most significant, both demand and supply, disruptions in a generation, and all the policy implications that came along with that. So the government increased SNAP benefits, and those benefits have now gone away. So we've seen a lot of different moving pieces.

More recently, we've seen consumers go back to full mobility, so back to the way they were traveling and getting out prior to the pandemic. I think this past summer TSA numbers would say they're actually above pre-pandemic levels. So when consumers were at home more, that was good for our business. As they're back out at restaurants and moving around, obviously, that's a bit more challenging.

At the same time the environment's-- the economy is a little bit more challenging today. So as a result, when we see that, we see value-seeking behaviors, and some of that is shopping different channels. Some of it is moving down into private label and products like that. But ultimately, it also moves people from restaurants back to in-home. So there's been a lot of moving pieces. As a result, we're kind of in the long tail of all these disruptions working their way through. So volume has been a little bit softer the last few months, really for the entire food and beverage industry. As we exit this calendar year and get into the next one, we expect to be back to a more normal environment.

- It's strange, Jon, because we got recently a very strong jobs report. We continue to get some good reads on the economy, but bottom line is, are people just going hungry? Does that economic data not reflect the realities you're seeing in your business where that family of four just can't afford to buy a box of cereal?

JON NUDI: There are no doubt that there are plenty of families that are challenged right now, and are seeking these-- or exhibiting these value-seeking behaviors. Again, we see that play out across multiple vectors. And that's something that we address, for sure. At the same time, we do believe there are some pantry destocking that's going on. If you think about during COVID, a lot of people filled up their pantries. They filled up their freezers, and they're working their way down.

Also, food waste. I think the fact is, almost a third of all food is ultimately thrown away. Consumers have become a little bit more efficient and economical by watching their waste as well. So we think consumers are paying attention to their pocketbook, and as a result, are exhibiting some of these behaviors that are making a little bit challenging from a demand environment. But at the same time, we understand how consumers are hurting and why they're doing these things.