GIS General Mills Inc

By Julie Wernau and Anni Gasparro 

Food company executives say they are expecting new consumer habits formed during the pandemic to stick, with a renewed focus on health and cooking at home.

Mark Clouse, the chief executive of Campbell Soup Co. speaking at The Wall Street Journal's Global Food Forum on Monday, said eating on the go, which had been popular before the pandemic, has declined dramatically.

People turned to comfort food initially during the outbreak, Mr. Clouse said. "What we're seeing now is a greater level of balance and a return to some of those health and wellness trends," he added.

Kellogg Co. Chief Executive Steve Cahillane told attendees at Monday's virtual forum that the company has a chance to appeal to more people given their change in habits. "People are having breakfast together with their families," Mr. Cahillane said.

Mars Inc. President of Innovation Jean-Christophe Flatin said in a discussion at the forum that consumers are paying more attention to nutrition and packaged-food labels than they did before the public-health crisis. But they don't just want food that's nutritious -- it still has to taste good, he said.

The shift in consumer behavior is creating a rare opportunity for old-line food makers that have struggled to make their canned and packaged foods relevant and modern. Big food companies, including Campbell and Kellogg, initially faced a surge in March and April when shoppers filled up their pantries and refrigerators amid lockdowns to curtail the spread of the coronavirus.

Grocery shopping is still at elevated levels. Overall packaged food and beverage sales remain up about 13% from a year ago at grocery stores and mass retailers, according to the IRI CPG Demand Index. However, in recent weeks, sales growth for groceries broadly has moderated, pressuring brands to ramp up marketing to keep the momentum going.

Campbell has shifted advertising to focus on how people can cook with its soups now that they have them in their pantries, and on connecting with younger families.

Mr. Clouse said that in prior years the company had allowed itself to become "less relevant" by focusing on niche consumer brands and trends instead of their core comfort foods. The surge in demand for Campbell products like Chunky soup and Pepperidge Farm Goldfish crackers has taught the company that "it doesn't require a new brand to meet some of these needs people are looking for."

Companies across the food sector are trying to shift their priorities to capitalize on the pandemic-driven demand. Kellogg is spending more on smaller brands that didn't get much investment before, such as Corn Pops and Corn Flakes cereal in the U.S.

Last month, General Mills Inc., maker of Cheerios, Yoplait and Betty Crocker, said it's spending more on marketing to ensure its brands eventually come out of the pandemic in a better position. Its chief executive, Jeff Harmening, said ingredient changes that General Mills made in recent years to make its products trendier, tastier or more nutritious have helped it gain market share during the crisis.

Conagra Brands Inc., which makes Healthy Choice frozen meals, Slim Jim meat snacks and Hunt's tomatoes, said Thursday that it also expects new habits to stick.

Chief Executive Sean Connolly pointed to higher sales of kitchen appliances and living room furniture and more Netflix subscriptions as evidence that people are staying put. He said in an interview following Conagra's earnings that he has seen consumers gravitate back toward healthier eating in recent months.

Earlier in the pandemic, the food giant saw Duncan Hines baking mixes jump, whereas lately, Healthy Choice frozen meals are on the rise. "Consumers might have gained a few pounds during quarantine," Mr. Connolly added.

Write to Julie Wernau at Julie.Wernau@wsj.com

(END) Dow Jones Newswires

October 05, 2020 15:54 ET (19:54 GMT)

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