For years, the playbook was simple: raise prices, blame inflation, and bank on brand loyalty to carry the day. It worked — until it didn't.

Today, some of America's most iconic food companies are doing something they haven't done willingly in years: cutting prices. General Mills, PepsiCo, Conagra Brands, Kraft Heinz, and others have all implemented or announced pricing rollbacks as they attempt to coax consumers back to grocery aisles that have grown increasingly cold toward their products. But after three years of volume declines and steadily eroding trust, the industry is discovering that a discount alone may not be enough to reverse its fortunes.

The Hangover After the Pricing Party

The story starts with a hangover. Between 2021 and 2023, packaged food companies raised prices aggressively — in many cases, multiple times — citing supply chain disruptions, surging commodity costs, and elevated transportation expenses. Consumers initially absorbed these increases. Then, quietly but decisively, they stopped.

"2024 was a disappointing year for processed food companies," said Robert Moskow, an analyst with TD Cowen. "I think they were under the impression that organic growth would return to normal after an even tougher 2023 — instead, price sensitivity remained really high. They had to increase promotional discounting a little more than they thought. And getting back to stable volumes has taken longer than they expected."

The numbers back him up. PepsiCo reported that volumes for snacks in North America dipped 4%, while beverages slumped 3%. Other food manufacturers, such as Conagra Brands, Kraft Heinz and J.M. Smucker, also posted declines in volumes. Meanwhile, sales of the top 14 packaged food categories totaled $357.4 billion in 2024 — a figure that, adjusted for inflation, represents essentially flat or negative real growth.

Cutting Prices: The Moves Being Made

The response from industry has been a wave of selective price reductions and promotional investments. General Mills cut prices on nearly two-thirds of its grocery products in North America, resulting in an uptick in product volume. PepsiCo also plans to lower prices across some of its food products to improve affordability.

Conagra took a different but telling approach. As CEO Sean Connolly explained to Food Dive, the company made a strategic choice to absorb inflation rather than pass it on again. "The consumer is just reaching the breaking point. So we're going to eat that last wave of inflation, keep our price points where they were," Connolly said, noting that companies that chose to take additional price increases in 2025 now find themselves in "corrective mode."

It's a candid admission from one of the sector's biggest players — and a signal that the era of reflexive price hikes may, for now, be over.

Why Discounts Alone Won't Save the Day

Here's where the story gets more complex. Price cuts are a start, but analysts and executives are increasingly acknowledging that the headwinds facing packaged food go well beyond sticker shock.

"Volumes have been weak across the sector for roughly three years, driven primarily by cumulative price increases, but also by structural factors like GLP-1 adoption and shifting consumer preferences away from ultra-processed foods," noted one analyst cited in Supermarket Perimeter.

The rise of GLP-1 weight-loss medications — drugs like Ozempic and Wegovy — is a particularly disruptive wildcard. TD Cowen forecast that increased GLP-1 usage could represent a meaningful headwind to the annual volume consumption of large-cap food companies, as new users cut their processed food consumption significantly. Moskow put it bluntly: "With companies exposed to snacking categories that have been benefiting for years from expandable consumption, the logic would be that it's also compressible when people take these drugs and cut back on mindless munching."

Then there's the "Make America Healthy Again" wave — a cultural shift, amplified by policy rhetoric, toward fresher, less processed eating. Of 16 strategic investments — including premiumization, reformulation and price cuts — made by companies including Campbell's, Conagra, General Mills, Hershey, Kraft Heinz, Mondelez and PepsiCo, just seven initiatives returned the brand to growth. As Moskow observed, the MAHA movement "is dominating consumers' mindset and making it harder for brands that are just saying, 'Hey, we're making our mac and cheese cheesier.'"

Even the price-cut strategy itself faces a credibility problem. Bob Nolan, Conagra's senior vice president of demand science, cautioned that in today's environment, simply reducing prices isn't enough. "The lower prices on yesterday's items doesn't move the consumer, especially the younger generations," he said.

The Private Label Threat

Layered on top of all this is a structural shift that may be the most durable of all: private label growth. Retailers now hold first-party consumer data, greater visibility into price sensitivity, control over shelf placement, integrated retail media networks and closed-loop incentive systems — giving private label a strategic edge it didn't have in the past.

"Value-first" shopping, notes industry analyst commentary in Just Food, has gone mainstream and is no longer confined to lower-income households. Shoppers across income levels are trading down, switching retailers, and scrutinizing price-per-unit before committing to a purchase. For national brands, this is an existential challenge that price cuts alone can't fully solve.

A Structural Reset, Not a Quick Fix

"Consumers represent two-thirds of the economy," said Brian Choi, managing partner and CEO of The Food Institute. "They're tapped out."

That phrase — tapped out — captures the mood well. Years of accumulated price increases have done something more corrosive than simply making groceries expensive: they've broken the automatic trust that consumers once placed in familiar brands. Rebuilding that trust requires more than a rollback. It requires innovation, transparency about ingredients, and a genuine rethink of the value proposition.

TD Cowen forecasts that big food companies will generate organic sales growth of just 1.5% in 2026 — an improvement from near-zero growth in 2025, but still well below Wall Street's hopes. The road back, if there is one, runs through genuine reinvention: smaller pack sizes that fit tight budgets, cleaner ingredient labels that speak to health-conscious shoppers, and marketing that earns back credibility rather than just chasing volume.

The packaged food industry built its empire on convenience, consistency, and the comforting reliability of a box of cereal that tastes exactly the same as it did in childhood. Those strengths haven't disappeared. But the contract between brand and consumer — that an extra dollar or two was worth the familiarity — has been strained, perhaps permanently.

Price cuts are a necessary first step. The question is whether Big Food has the appetite for everything that has to come after.

Sources: Food Dive, Baking Business, Supermarket Perimeter, Just Food, USDA Economic Research Service, TD Cowen (via industry reporting), The Food Institute. All quotes sourced from published industry reporting, February 2025–February 2026.