Jesse Newman
Appearances
WSJ What’s News
Fed Holds Rates Steady, Dims Economic Outlook
The biggest thing that they show us is that consumers are pulling back on their snack purchases. And this isn't the first time we've seen it. Big food companies have been saying for a while now that they are seeing a slowdown in snacks. And General Mills really reiterated this today.
WSJ What’s News
Fed Holds Rates Steady, Dims Economic Outlook
And they talked a lot about consumers and how consumer sentiment just really hasn't improved the way they thought it would at the beginning of their fiscal year. So at the beginning of the fiscal year, they thought, you know, consumer sentiment was going to get a lot better. They said that hasn't happened. And in fact, shoppers are still very, very focused on value.
WSJ What’s News
Fed Holds Rates Steady, Dims Economic Outlook
And so it's up to them to create that value for consumers.
WSJ What’s News
Fed Holds Rates Steady, Dims Economic Outlook
Food companies in general are, just like all businesses across the U.S., really just trying to ride the wave of this uncertainty. It's hard to plan when you don't know exactly what the future is going to bring. So they don't know enough to price anything in at this point, but there's just a lot of uncertainty out there when it comes to the broader economic conditions.
WSJ What’s News
Consumers Pull Back Spending, From Luxury Goods to Convenience Stores
Consumers are definitely buying fewer snacks. That's a trend that we've been seeing for a little while. And some people will tell you it's the economy, stupid. Folks are just really guarding their purse strings very carefully. Food prices have been going up for years now. And obviously, we all know this is a lot of what convenience stores sell.
WSJ What’s News
Consumers Pull Back Spending, From Luxury Goods to Convenience Stores
And so when shoppers start pulling back at convenience stores, that can be a big challenge for food companies.
WSJ What’s News
Consumers Pull Back Spending, From Luxury Goods to Convenience Stores
In some cases, it's really important. You think about Hostess, which makes Twinkies. And convenience stores are really, really important for them. Convenience stores make up about 40% of Hostess's sales. And when you've got people passing up the snack aisle and passing up the Twinkie aisle, that's a really big deal for your brand.
WSJ What’s News
Consumers Pull Back Spending, From Luxury Goods to Convenience Stores
Now, I will say that for Hostess in particular, convenience stores really aren't their only problem. But when you're that heavily dependent on convenience stores for sales, any downturn in convenience stores is going to really hit you.
WSJ What’s News
Consumers Pull Back Spending, From Luxury Goods to Convenience Stores
They're all trying to figure out how to appeal to convenience store customers. One of the big things that we see a number of companies doing is new product launches. So PepsiCo, they're developing these sort of mini meals, which are Doritos loaded with a warm nacho cheese sauce. Smucker, which owns Hostess, last summer, they launched a limited edition version cherry-flavored Twinkie with Slurpee.
WSJ What’s News
Consumers Pull Back Spending, From Luxury Goods to Convenience Stores
And you've even got the tobacco companies who are rolling out new, more affordable cigarettes. So they're really trying to appeal to consumers with new products and better prices.