• by Sarah Mahoney , Staff Writer, Yesterday

Americans are buying less food. And that’s boxing American CPG CEOs into a complicated moment of double-speak. Too much talk about the painful impact of inflation, SNAP cuts, tariffs and supply-chain struggles linked to the war in Iran might draw political ire. Too much talk about raising prices might freak out worried consumers. Lowering prices too much might panic investors.

But some -- including John Brase, Conagra’s new president and CEO -- are willing to be blunt.

“We will implement strategic, inflation-justified pricing actions where necessary, with particular emphasis on our frozen portfolio,” said Brase, in his first earnings call since joining from J.M. Smucker Co. “While these actions may pressure volumes in the short term, they are essential to restoring margins and funding the investments necessary to support the long-term health of our categories.”

Building that long-term value, he added, requires more money spent on marketing, increasing ad spend to a total of 3% of Conagra’s $11.3 billion in annual sales, focused on the frozen meals and meat snacks business, where the company feels it has the most potential to win. That amounts to a 14% jump, which he called “a deliberate commitment.”

Even with that investment, Conagra’s forecast for the coming year expresses the painful reality: a net sales decline of up to 3%, with volume sales falling “mid-single digits.”

Conagra’s candor highlights the tension all CPG brands face right now: It’s not just that consumer perception of grocery-store prices is one of runaway increases. It’s that those increases are the reality. And that’s translating to consumers putting their food budgets on a diet.

In a new report titled “The Grocery Slowdown is Real,” Bain & Co. shows that the decline in grocery unit sales, which began mid-2025, has entered a new phase. Initially, it was masked by higher prices. “But since February 2026, units have stepped down sharply enough to pull sales lower across the U.S.,” the report says. “Prices are still climbing 2% to 3% year over year, roughly in line with food-at-home inflation, while units are down about 2% year over year in most months since February. Pricing growth and inflation can no longer hide that shoppers are buying fewer items.”

Bain’s report, based on NielsenIQ data, reveals that no single shock is responsible for the decline. Cuts to Supplemental Nutrition Assistance Program (SNAP) hit sales late in 2025, and in March of this year, the 20%-plus increase in gas prices, and the 33% rise in grocery prices since 2019 have also played a part. And while the benefit of an extra $50 billion in income-tax refunds helped, “inflation and high gas prices keep pulling the other way.”

Together, those factors are hurting sales across the board: In June, units fell 1.8%, a nearly 2-percentage-point deterioration from June 2025.

Bain’s research now finds that 80% of Americans are trying to spend less, and 28% are actively trying to cut back on groceries. The majority -- 56% -- are trading down to lower-priced brands, 49% are simply buying fewer items, and 44% are leaning harder on coupons and promotions.

For those in the CPG universe, that means it’s not as simple as gaining new customers. Kraft Heinz’s chief made a decision similar to Conagra’s earlier this year, pledging to increase marketing spend to 5.5% of net sales, up from 4.9%. Other CPG heavyweights, including General Mills and PepsiCo, have responded by lowering the price of many products. And grocery retailers are increasingly investing in private label brands.

Whatever the strategy, Bain notes, people are still buying less overall. That points to a protracted period of weak sales until at least some macroeconomic factors improve.