• 🆕 This Week’s Hot New Products
• 🧊 A Friendly Freezer
• 🟫 IFG Snaps Up Brownie Brand
• 🚚 Be Happy Snacks Hits 7-Eleven and More
• 🍫 Olympic Village Goes Nuts Over Chocolate Muffins

The challenging operating environment and cautious consumer sentiment continues to drag down profits of some of the country’s top food companies – including The Hershey Company, Kraft Heinz and Mondelēz International, according to their respective earnings calls this week. 

Hershey CEO Michele Buck told investors yesterday that while consumers have been pulling back on discretionary spending, its confection and salty snacks portfolios continue to see momentum. But those sentiments came as the company reported a 16.7% drop in consolidated net sales, volume decrease of 18% and operating profit decline of 48.7% to $287.8 million during the quarter.

Kraft Heinz CEO Carlos Abrams-Riveria emphasized that consumers were more cautious than the management anticipated, contributing to the company’s 3.6% sales drop and 3.4% volume decline.

On Tuesday, Mondelēz also shared a similar story: Consumers are continuing to downtrade amid high prices in grocery. The company’s gross profit margin lost 590 basis points and fell to 33.5% in Q2 while volumes dropped 2.2% and it pushed prices up 4.7%. So how can companies convince consumers to trade back up? 

Kraft Heinz is strategizing increased price investment (i.e.: more dollars going toward promotional and marketing activities) but only for the short term to close the “price gap” with competitors, cautioned CFO Andre Maciel. For both Hershey and Mondelez – who have ramped up pricing over the past to hedge against higher cocoa and sugar costs – targeted promotions will also be a key part of the strategy. 

But not everyone is feeling these effects. Despite Kellanova’s 5% sales decline in the quarter, the company remained optimistic about its market position and attributed its sales drop to last year’s divestment of its Russian business as well as the impact of its own corporate split in October. The business saw operating profit increase 18% during the quarter and “continued gross margin improvement” following the split, said president, chairman and CEO Steve Cahillane. 

Additionally, Utz saw positive results after getting ahead of cautious consumers and rolled out increased promotions in Q2. The company reported retail sales growth of 1.1% as volumes increased 3.2%; its Power Four Brands – Utz, On The Border, Zapp’s and Boulder Canyon – saw even greater sales growth at 2.8%. Overall, the company added 260 basis points to its gross margin. 

"We made necessary adjustments to our promotional activities during the quarter to address consumer value expectations,’ emphasized Utz CEO Howard Friedman. 

So while end-of-summer sales are typically reserved for back-to-school items like backpacks and pencils, it seems some companies this year may be bringing those savings to snacks, sugary confections and other strategic areas of the store. 

Go Deeper: Kraft Heinz Seeks To Deliver Value As Sales, Volumes Decline

It’s finally Friday, folks! And that can only mean one thing – it’s time for the release of our weekly new product gallery. Here’s a brief overview of what’s in store:

🫒 Little Spoon joins forces with olive oil maker Graza to launch its Little Drizzle collection. The limited-edition collection includes a Sweet n’ Savory Summer Harvest Babyblend and a Mediterranean-style Chicken Bravas Biteable. 

🍓 Capitalizing on the rising popularity of private label, Kroger introduces its Field & Vine fresh produce line grown by U.S. farmers in California, Florida, Georgia, Michigan, New Jersey, North Carolina, Oregon and Washington. The brand currently carries blueberries, raspberries and strawberries. 

🍄 Santa Cruz Fungi has ventured into the world of frozen treats with the release of mushroom-infused popsicles, aptly named Shroomsicles. The frosty pops are available in eight flavors: Strawberry Lion’s Mint, Chagaccino, Key Lion’s Mane Pie, Cotton Candy Cap, Chag-olate, Cordy Creamsicle, Tremella Lematcha and Porcini Pumpkin Pie. 

Check out the full new products roundup on Nosh.

Frozen sourdough grilled cheese startup A Friendly Bread is opening up access to its hottest asset: freezer space.

🏭 Earlier this summer, and after a nearly two-year-long search, the Baltimore-based brand purchased a former Kosher chicken processing plant that comes with a 5,000 sq. ft. freezer and 2,000 sq. ft. refrigerator – a.k.a. more space than the six-year-old startup needs even if it were to “10x or 20x” the business said founder Lane Levine. 

🥪 The company is now diversifying the frozen sandwich business via cold storage services which Levine believes will help bring some stability to the company’s balance sheet: 

🗣️ “It’s like being a parking lot owner,” Levine joked about his new storage business. “I still get to be in control of the freezer. I’m the one who takes in people’s stuff and takes it back out.”

Check out the full story to learn about how Levine has iterated the business, the opportunity he sees in the brand’s value-added product and what channels it is eying as it works to level up.

Today, Irresistible Foods Group, which houses brands including King’s Hawaiian, Grillo’s Pickles, Shaka Tea, and others, announced a strategic partnership with The Killer Brownie Company. Financial terms were not disclosed.

📈 Founded in 1988, Killer Brownie produces premium brownies that were originally sold in three Dorothy Lane Market stores in Ohio prior to expanding to more than 15,000 grocery retailers across the country in recent years.

🤝 Under terms of the agreement, Killer Brownie’s executive team and management group plan to remain in place.

🗣️ What they said: "It's not in our nature to take on partners, so in order for us to do so, it would have to be with a very special family-owned business who would share the same values that we have at Killer Brownie and Dorothy Lane Market.” – Norman Mayne, founder of The Killer Brownie Company and CEO of Dorothy Lane Market

🌱 Latin cooking essentials brand Loisa has landed its USDA Organic Sazón and Adobo as well as its full line of Sofrito Cooking Sauces in Sprouts stores across the country. According to co-founder Scott Hattis, the partnership is a milestone for both the brand and representation within the Latino community. 

🍿 Be Happy Snacks, the popcorn brand founded by the TikTok-famous D’Amelio family, has launched its trio of flavors – Himalayan Pink Salt, White Cheddar and Cotton Candy – in new 1 oz. bags at 10,000 7-Eleven and Speedway stores nationwide. The bags carry an SRP of $2.29.

🍄 Blink-182 drummer Travis Barker’s CPG brand, Barker Wellness, is launching in over 400 Sprouts stores. The retail chain will carry the brand’s new sugar-free Mushroom Adaptogen Gummies in Nighttime Blend (Mixed Berry Lemon)  and Daytime Blend (Strawberry Pineapple).

🌶️ Southeast Asian food company Homiah announced its sambal chili crunches are now available in over 400 Whole Foods stores across the country. The products come in Original and Shrimp varieties. 

Last week we brought you a rundown of the foods that would be fueling athletes during the 2024 Paris Olympic Games. (ICYMI: that menu entails plenty of locally sourced ingredients and plant-based foods). But there’s one item that has risen to popularity that was absolutely nowhere on our radar: Chocolate Muffins.

🏊 The Olympic Village’s version of the baked good is apparently incredible, at least according to Norwegian swimmer Henrik Christiansen, who has gone viral on TikTok as the Chocolate Muffin Man. 

🤩 But most social media users are confused how the often passed-over treat in American cafeterias could be THAT good. Christiansen has emphasized it's a muffin unlike any he’s ever had before.

So dear readers, how long will it be until we see those iconic Olympic Village Chocolate muffins make it to CPG?

🧀 And in (unlikely the last) bit of Olympic food news: Italian Gymnast Giorgia Villa has also gone viral for a photoshoot with her latest sponsor: Parmigiano Reggiano. Have a great weekend.