Is the North American consumer market cooling down, prompting food giants to shift toward a 'profit-first' strategy?

Against the backdrop of a cooling North American consumer market, General Mills has exhibited a unique pattern—declining revenue yet doubled profits—reflecting a strategic pivot across the food industry from scale expansion to profit prioritization, offering a reference for peers navigating growth slowdowns. However, its profit growth does not stem entirely from improvements in core operations; asset disposals and similar measures have also played a critical role. Faced with shifting consumer preferences and cost pressures in the North American market, balancing short-term profitability against long-term development has become an industry-wide focal point. Future growth will hinge more on the tangible effectiveness of its international expansion. Strategic Transformation: Has the growth logic of food giants shifted from 'scale supremacy' to 'profit supremacy'? Recently, General Mills released its Q1 FY2026 financial results, ending August 24, 2025. Core financial metrics show that branded net sales for the quarter totaled $4.52 billion—down 6.8% year-on-year from $4.848 billion. Although revenue declined, profitability surged: operating profit reached $1.726 billion, up 108% year-on-year; net income attributable to the company stood at $1.204 billion—more than double the $580 million recorded in the same period last year. This marked improvement in profitability is closely tied to General Mills’ proactive restructuring of its business portfolio, including ongoing asset divestitures to focus on high-margin businesses. For instance, during this fiscal quarter, the company sold its U.S. yogurt business assets to Groupe Lactalis S.A., generating a pre-tax one-time gain of $1.05 billion. Earlier, in Q3 FY2025, it transferred its Canadian yogurt business to Sodiaal International; subsequent adjustments to the agreement boosted related gains to $104 million in this quarter. These moves signal General Mills’ deliberate exit from slow-growth, low-profit non-core categories—and a strategic reallocation of resources toward higher-advantage domains such as food retail and pet food. Amid globally subdued consumption and slowing revenue growth, streamlining operations and doubling down on core businesses is no longer General Mills’ sole approach—it has become a shared strategic response among multinational food enterprises. For example, PepsiCo has optimized its supply chain through organizational restructuring and acquired health-focused brands—including Siete Foods, Sabra & Obela, and Poppi—to strengthen leadership in priority categories. Mars, Inc. acquired Kellanova—the snack business of Kellogg Company—for $36 billion, further consolidating its snack portfolio to balance scale and profitability. At the heart of these strategic shifts lies a departure from past overemphasis on scale, toward a profit-driven model aimed at enhancing shareholder returns. Industry leaders are systematically reviewing their portfolios, shedding low-growth assets, and channeling resources into high-potential areas such as health-oriented and functional foods. Market Context: Is the softness in North American retail consumption a short-term fluctuation—or a long-term structural shift? Softness in North American retail consumption has evolved into a structural trend—not merely reflecting short-term economic volatility but also signaling deeper behavioral shifts among consumers under persistent inflationary pressure. High prices, economic uncertainty, and generally insufficient savings have placed mounting financial strain on more Americans: data shows approximately 70% recently reported heightened personal financial stress. In this context, price sensitivity now outweighs brand loyalty, directly fueling rapid growth of private-label products. In 2024, U.S. private-label food and grocery sales reached $271 billion—a 3.9% increase, far outpacing national brands’ 1% growth.

Hema launches new HPP prebiotic plum-ombu juice; Quaker and Sam’s Club debut probiotic fermented oatmeal… | Weekly Hot News

Early this year, Dayao introduced its '1+2+N' product strategy: '1' refers to its core carbonated beverage category; '2' denotes two key directions—plant-based protein drinks and fruit juices; 'N' represents diversified innovations driven by consumer demand. The Yiyang Plant-Based Protein Drink series is a pivotal implementation of the '2' pillar—specifically, the plant-based protein segment—and precisely targets multiple meal occasions (breakfast, lunch, dinner, and late-night snacks), further strengthening Dayao’s penetration in foodservice channels and enhancing both market competitiveness and resilience. 6. World’s First Fermented Oats! Quaker Launches 'Probiotic-Fermented Oatmeal' Ready-to-Eat Oatmeal at Sam’s Club Recently, Quaker launched a new product: 'Probiotic-Fermented Oatmeal' ready-to-eat oatmeal. Made from Quaker’s proprietary glutinous oats, the product undergoes a 24-hour controlled-temperature fermentation using five distinct probiotic strains. It delivers abundant oat-derived prebiotics and postbiotics generated during fermentation, offering a soft, pleasantly tart-sweet texture suitable for breakfast, afternoon tea, or bedtime snacks. As China’s first fermented-oat brand, Quaker debuted its 'Super Fiber Q' probiotic-fermented oatmeal last October. Its proprietary fermentation process not only yields a softer texture, gluten-free composition, and odorless profile—but also enhances oat nutrient bioavailability, facilitating better intestinal absorption. Simultaneously, the product addresses common pain points of health foods—such as poor taste and low absorption—making it a pioneering representative of functional food innovation. The new product is currently available exclusively at Sam’s Club, priced at RMB 69.9 for a pack of 30 sachets (40g each). 7. Operating Profit Up 108%! General Mills Releases Q1 FY2026 Financial Results On September 17, General Mills announced its Q1 FY2026 financial results. Performance met the company’s expectations for organic net sales and slightly exceeded forecasts for adjusted operating profit and adjusted diluted earnings per share (EPS). Financial data shows net sales totaled $4.5 billion (approx. RMB 32 billion), down 7% year-on-year; organic net sales declined 3%, primarily due to weak North American retail consumption and category-specific demand fluctuations. Operating profit reached $1.7 billion (approx. RMB 12 billion), up 108% year-on-year—driven largely by the $1.05 billion gain from the U.S. yogurt divestiture. Adjusted operating profit stood at $711 million, up 116% year-on-year; net income totaled $1.2 billion, up 108% year-on-year. Jeff Harmening, Chairman and CEO of General Mills, stated: 'Our primary objective for FY2026 is to restore organic sales growth by investing more significantly in consumer value and product innovation.' Currently, General Mills is intensifying investments in consumer value, product innovation, and brand building—including expanding its Blue Buffalo pet food brand into fresh pet food offerings in Q2. 8. Coca-Cola Shifts Alcohol Beverage Strategy, Partners with Spirits Giant Sazerac Recently, Red Tree Beverages—the Coca-Cola subsidiary managing its U.S. alcohol beverage business—announced a new partnership with spirits giant Sazerac. Under the agreement, Sazerac will assume production and distribution responsibilities for several Red Tree products, including 'Fresca Mixed,' the upcoming 'Fresca Hard' (an alcoholic Fresca variant), and 'Minute Maid Spiked.'

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