The Impact of Car Insurance Inflation on Snack Business: Insights from Campbell Soup CEO

Inflation-battered consumers are feeling the pinch as they cut back on pricier snacks like pretzels and chips, leading to a surprising decline in volumes for Campbell Soup’s snacks division. The company reported a 1% drop in volumes in the most recent quarter, following a 2% decline in the previous quarter.

Campbell Soup CEO Mark Clouse attributed the decline to mounting pressure from the economy and a sticky inflationary environment. While he believes there is nothing structurally wrong with the snacks business, he acknowledged that consumers are being more cautious at supermarket aisles due to high interest rates, rent, and other expenses.

Campbell Soup is not the only company feeling the pressure on snacks, as PepsiCo and Conagra Brands also saw declines in volumes for their snack businesses. Analysts suggest that snacking categories, particularly salty snacks, have been slow to feel consumer elasticities but could see some relief as we move into the summer snacking season.

Despite the challenges, Campbell Soup reported positive financial results, with a 6% increase in net sales, a higher gross margin, and a 10% increase in adjusted EPS. Wall Street analysts have mixed opinions on the company’s performance, with some expecting a modest outperformance and others remaining cautious due to base business challenges.

As CEOs prepare for a contentious presidential election season that could impact consumer behavior, the snack industry and other sectors are bracing for potential changes in consumer spending habits. Ford CEO Jim Farley discusses election risk in the latest episode of the “Opening Bid” podcast.