It’s not often that companies in the same industry provide differing views of why demand might be strong or weak at a particular time, or for that matter express confusion about what’s happening, but that’s what’s occurring among U.S. branded packaged foods companies.

As FreightWaves reported two weeks ago, General Mills experienced a sharp volume decline in its quarter ending May 31 and provided two explanations for why: Americans have become increasingly price-sensitive and U.S. retailers have reduced their inventories in six of the past eight quarters in their attempt to manage working capital.

Fellow packaged foods manufacturer Conagra on Thursday reported an even more severe volume decline than did General Mills in its quarter ending in May, but not because of any apparent retailer destocking (the company doesn’t see any notable difference in its customer inventory levels versus the historical average). Rather, the company has observed unusual demand weakness since just after the Easter holiday (early April), which is broad-based across many categories and companies. And Conagra doesn’t think Americans are trading down to cheaper items but rather are simply buying less food (an “overall category slowdown,” as Conagra termed it). 

The company admitted it doesn’t know why this would be happening (Are some Americans so financially strapped that they’re actually eating less?) and thinks this situation is likely temporary. Regardless, it’s not a situation that inspires confidence about the state of the U.S. economy.

Along somewhat similar lines, the spice maker McCormick recently acknowledged that U.S. consumers are under some degree of pressure and that they’ve been trading down to cheaper private-label brands as a consequence.

The exception to the rule appears to be PepsiCo, which like Conagra reported its latest quarterly results Thursday morning. PepsiCo in fact raised its 2023 organic sales growth guidance from 8% to 10% on the back of sustained substantial price increases. What distinguishes PepsiCo from the others? There’s far less private-label competition in its primary categories (soda, chips, sports drinks, etc.) than in most others. PepsiCo’s first-half organic sales growth was a robust 14%, with price up 16% and volume down 2%.

Why are many CPG companies experiencing such volume weakness? As we’ve pointed out, U.S. credit card debt is at a record high despite interest rates of more than 20% and Americans’ inflation-adjusted weekly earnings fell for over two years before turning slightly positive in June. In other words, many Americans are increasingly financially strapped, and that’s before federal student loan payments resume in October.