The news: General Mills cited weak consumer sentiment, uncertainty, and caution from lower- and middle-income households as it lowered its sales and profit expectations for the fiscal year ending May 2026.

• The foodmaker now expects organic net sales to decline 1.5% to 2%, compared with its prior forecast for sales growth of between -1% to 1%.
• Adjusted operating profit and diluted earnings per share are now projected to fall 16% to 20%, compared with 10% to 15% previously.

How we got here: General Mills noted that volume recovery is progressing slower than expected, even after it cut prices on roughly two-thirds of its portfolio to accommodate value-seeking consumers.

• That mainly reflects sustained financial stress on lower- and middle-income shoppers, who are relying on promotions as they grapple with inflation, reduced SNAP benefits, and overall uncertainty.
• 86% of US adults report being stressed by the price of groceries, per an August poll by AP-NORC.
• But General Mills also called out the impact of lower population growth and rising adoption of anti-obesity drugs, which combined represent a 0.5 percentage-point headwind to aggregate category growth.

Recommendations for the CPG industry: General Mills’ weaker outlook reflects the challenges foodmakers face as they try to convince customers of their value and reinvent themselves for the “MAHA” era. To navigate these conditions, companies have to:

Give shoppers a reason to buy. Communicate tangible health benefits such as higher fiber or protein content or improvements like better taste, ingredients, and packaging.

Have a clear strategy for innovation. General Mills is focusing on three trends—bold flavors, better-for-you, and “familiar and fun food experiences”—where it sees the greatest opportunity for growth. By targeting segments with strong demand, the company is better positioning itself to attract shoppers. It expects net sales from new products to increase by around 25% YoY this fiscal year.

Deliver on value. Lowering prices is just one way General Mills is hoping to woo price-conscious customers. The company is also adjusting its price architecture to offer more entry-level price points—ideal for both cash-strapped shoppers and GLP-1 users—as well as larger value sizes for those looking to stretch their dollars.