Jun 30, 2021 - Economy & Business

A new era of eating habits

!00 dollar bill with Chef's hat
Illustration: Aïda Amer/Axios

One of America's food giants just dropped a hint about how the pandemic changed (and didn't change) eating habits.

Why it matters: General Mills — owner of iconic brands like Cheerios, Yoplait and Betty Crocker — won big at the height of COVID-19.

  • How this class of pandemic-era winners fares now gives a glimpse into which habits are sticking and which aren't.

Demand for at-home food is slumping as "offices and schools reopen and the broader economic recovery continues," General Mills said Wednesday.

  • The extreme hoarding and pantry stocking that gave the company a boost is long gone.

The big picture: Companies like General Mills face almost impossible comparisons. Their sales look puny compared to the monster revenue they raked in during the depths of the crisis.

  • "This is the first quarter where we can honestly say it looked more like the pre-pandemic America than the pandemic America," says Tom Essaye, a former trader who writes the Sevens Report.
  • One gauge of General Mills revenue was down 6% from the same time last year — but 4% above pre-pandemic levels.

What's helping: Some pandemic behavior is showing signs of staying power, General Mills CEO Jeff Harmening told analysts today.

Work from home: "Consumers will eat at home more than they did prior to the pandemic and ... use our products more than prior to the pandemic as well," Harmening said.

E-commerce is now 11% of sales — up from 5% before the pandemic. "Anytime you add convenience to someone's lives, it tends to stick."

The other side: Cereal could see a comeback after more time-consuming breakfasts like pancakes saw faster growth during the pandemic.

Worth noting: General Mills is bracing for "the highest level of input cost inflation that we've seen in 10 years," Harmening says.

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