In a recent push to adapt to changing consumer habits and economic pressures, major food conglomerates WK Kellogg Co.
WK Kellogg CEO Gary Pilnick, highlighted cereal as an economical and versatile dinner option in a CNBC interview, stating, "The cereal category is a great place for consumers under pressure. We're advertising about cereal for dinner. Think about the cost of cereal for a family versus what they might otherwise do."
Similarly, PepsiCo CEO Ramon Laguarta encouraged consumers at a Florida industry conference to explore creative culinary uses for snacks like Doritos and Rold Gold pretzels, suggesting they can serve as "side dishes and ingredients" in meals. According to Bloomberg, during the presentation, a slide was shown displaying an image of open bags of Doritos and Tostitos covered in cheese and peppers.
This pivot comes amid declining sales for snack products, as inflation continues to affect consumer purchasing power. For instance, PepsiCo's fourth-quarter report showed a revenue drop, including a 2% decline in volume for Frito-Lay North America. Kellogg's fourth-quarter sales also dipped, with a 10% volume drop, despite price increases.
The companies' innovative approach to mealtime is not new. Kellogg previously promoted "#KelloggsCerealforDinnerEntry" on Instagram, awarding $5,000 to entrants who shared their cereal-for-dinner moments. PepsiCo has sought to engage Gen Z, a demographic increasingly distant from sodas in favor of healthier options, with initiatives like Doritos-flavored cocktails and the introduction of Starry, a new soda aimed at this younger audience.
Experts and industry observers note that these strategies emerge during a period of financial stress for many consumers. Inflation has outpaced wage growth, and food prices have risen significantly, impacting purchasing behaviors, especially among cost-conscious Gen Z consumers. A survey by the Private Label Manufacturers Association found that nearly two-thirds of Gen Z shoppers frequently opt for store brands over name brands, seeking to stretch their budgets further.
Critics, however, point to "greedflation" as a factor in ongoing price increases, suggesting that companies are leveraging inflation as a pretext to boost profits. Braden Douglas, CEO of Crew Marketing Partners, suggests that the entire food supply chain is under pressure, not just manufacturers. He argues for a multifaceted approach to address high food prices, including potential government intervention and corporate efforts to absorb some costs.
Kellogg's and PepsiCo's calls for creativity in the kitchen reflect broader shifts in consumer habits, economic pressures and the ongoing search for affordable, convenient dining options. Whether these initiatives will lead to lasting changes in how people view dinner remains to be seen, but for now, they offer a glimpse into the evolving relationship between food companies and the consumers they serve.
For people seeking alternatives to resorting to chips and cereal for dinner because of financial constraints, consulting with a financial adviser could be a beneficial step. A financial adviser can help you get back on track by offering strategies to invest in your future, create a sustainable budget and make informed decisions that stretch your grocery dollars further while maintaining a balanced diet.
