Welcome to this week’s Food Exec Brief, your strategic intelligence roundup for food and beverage manufacturing leaders. This week, we’re covering:
- General Mills’ fiscal 2026 net sales fell 5% to $18.42 billion; the company is pivoting to protein, fiber, and clean label as its path back to growth while GLP-1 drug use reshapes which categories win.
- A federal court permanently dismissed the industry’s most-watched ultraprocessed food lawsuit, but at least 17 states are advancing their own UPF legislation and an FDA definition could arrive before year-end.
- McCormick collected $28 million in tariff refunds, then turned around and earmarked the money to offset new cost inflation from the Iran war, which is tracking at about 6% for the fiscal year.
General Mills posts a loss and bets on ‘benefit-led’ brands
General Mills’ fiscal 2026 net sales fell 5% to $18.42 billion, with organic sales down 2% on volume and price/mix both slipping. North America Retail took the hardest hit, with reported net sales dropping 11% to $10.57 billion. Chief Operating Officer Dana McNabb cited two businesses as driving “outsized” pressure: Totino’s, which accounted for almost half of NAR’s retail pound declines, and Blue Wilderness in pet food. The company is moving into fiscal 2027 with what it calls “benefit-led product innovation” anchored in protein, fiber, clean label, and bold flavors. (Learn more)
Early results show the strategy has traction, and the GLP-1 data explains why. The Cheerios Protein platform is already near $100 million in retail sales, and Annie’s Super Mac (15 grams of protein and 6 grams of fiber per serving) grew retail sales over 80% in fiscal 2026. A new OC&C Strategy Consultants report finds GLP-1 drug penetration currently at about 12% and projected to reach 15% to 18% by 2031, with an estimated -0.2% annual volume drag on U.S. food and beverage demand. The bigger shift is in the basket, with users trading toward protein, nutrient density, and smaller formats, while alcohol, sweet bakery, and snack categories see the sharpest spending drops. (Learn more)
Why it matters: The GLP-1 effect is already showing up in category performance before most manufacturers have revised their product roadmaps. What’s working for General Mills right now (protein claims, clean ingredients, functional benefits) is a real-time signal for where volume is moving across the shelf.
The UPF lawsuit is dead. The regulatory risk is not.
A federal court permanently dismissed the most closely watched ultraprocessed food lawsuit against Kraft-Heinz, PepsiCo, and others this week, ruling that a correlation between UPF consumption and childhood diseases does not amount to causation in the individual plaintiff’s case. The plaintiff had amended his complaint to list 179 specific products consumed over his childhood, including the frequency of consumption. The court found it still wasn’t enough to establish which product caused which harm, and the ruling prevents further amendment. (Learn more)
The court win does not slow the regulatory pipeline. California has already enacted the first statutory definition of “ultra-processed foods of concern” for school meals, with full implementation by 2035. At least 17 states have proposed or passed their own UPF legislation. HHS Secretary Robert F. Kennedy Jr. stated in June that the FDA’s federal UPF definition is under White House review and expected “over the next couple of months.” Once that definition exists, it becomes the foundation for labeling guidance, public procurement rules, school food standards, and future litigation. The San Francisco government lawsuit against major manufacturers is still active and watching. (Learn more)
Why it matters: The dismissed lawsuit tells you what courts won’t do today. The regulatory calendar tells you what’s coming regardless. Manufacturers who map their portfolios against potential UPF definitions now will have far more runway than those waiting for the final rule to arrive.
McCormick’s $28M refund and the Iran war math
McCormick received $28 million in tariff refunds in Q2, with another $3 million expected in the second half of the fiscal year, money the company is immediately earmarking to offset new inflation from the Iran conflict. CFO Marcos Gabriel confirmed on the June 25 earnings call that company-wide cost inflation is tracking at about 6% for the fiscal year, with the Iran war as the primary new driver. Higher logistics costs and tighter freight capacity tied to Strait of Hormuz disruptions are already hitting the income statement. “The Middle East conflict is really driving more inflation that we had not contemplated before,” Gabriel said. (Learn more)
The refunds cover country-specific duties that the Supreme Court struck down earlier this year. McCormick sources thousands of ingredients from 80 countries, many of which have no domestic commercial alternative, which is why the company faces both the windfall and ongoing exposure to the 10% global tariff the Trump administration imposed after the ruling. Other manufacturers are in the same position. BJ’s Wholesale Club used tariff refunds to cut retail prices by roughly half a percentage point, and Deere recovered $272 million but still forecasts about $900 million in net tariff costs from other duties. (Learn more)
Why it matters: Tariff refunds are a one-time offset against what is becoming a structurally higher cost environment. If the Iran conflict continues to squeeze freight and energy markets, 6% cost inflation is a floor, not a ceiling.
The Food Exec Brief provides weekly insights for food and beverage manufacturing leaders and publishes every Friday.
