Welcome to this week’s Food Exec Brief, your strategic intelligence roundup for food and beverage manufacturing leaders. This week, we’re covering:
The Met Office predicts the 2026 El Niño could be the largest since the 19th century, with a new study linking severe water scarcity to 74% of annual wheat price fluctuations and projecting prices near $364/tonne at 3°C of warming.
Walmart deployed its $2.9 billion in tariff refunds to increase price rollbacks 53%, while Flowers Foods reported Q2 net income down 30% and volume down 5.8%.
Circana finds 48% of U.S. adults seeking more protein (up 7 points year-over-year) and GLP-1 users nearly doubled to 8.5% of adults; Smucker’s Uncrustables hit $1 billion in annual sales on 12% quarterly growth.
Climate risk just got a forecast: El Niño may be the biggest since the 1800s, and wheat prices face a structural reckoning
The Met Office warns the 2026 El Niño could be the largest since the 19th century, with equatorial sea-surface temperatures forecast to top 3°C, twice the typical range. India’s monsoon rainfall is tracking well below normal, threatening rice crops. Central America, tropical South America, and West Pacific nations face severe drought risk. Professor Adam Scaife of the Met Office called it “an unprecedented event.” (Learn more)
Research published in Earth’s Future finds severe water scarcity explains roughly 74% of annual wheat price fluctuations from 2000 to 2021, with projections reaching $273/tonne at 2°C warming and $364/tonne at 3°C, roughly triple the inflation-adjusted 2010 price. The moves that matter now are building crop-by-region risk matrices, pre-qualifying alternative suppliers before shortages hit, and contracting earlier to give farmers confidence to plant. (Learn more) (Learn more)
Why it matters: Wheat procurement teams have an opportunity to act now that will not exist in Q1 2027. When supply forecasts shift into actual deficits, the vulnerability of relying on passive tracking over formal contracts and mapped risk becomes painfully clear.
Walmart is spending $2.9 billion to cut prices, and the ripple effect is already appearing in manufacturer earnings
Walmart deployed its $2.9 billion tariff refund into price rollbacks, increasing them 53% from 7,200 to 11,000 units in the first half of 2026. CEO John Furner said the company is “investing heavily in price because customers need us to, and because we believe it drives market share gains over time.” Comparable sales rose 2.6% and e-commerce jumped 24%. For manufacturers, the takeaway is that when Walmart funds rollbacks from tariff refunds, it expects suppliers to absorb lower cost-of-goods targets to sustain them. (Learn more)
Flowers Foods reported the other side of that equation this week. Q2 net income fell 30% to $40.7 million, sales dropped 4% to $1.19 billion, and volume declined 5.8%, while 1.8% in price and mix gains could not offset the slide. CEO Ryals McMullian cited “ongoing pressure on household budgets, evolving consumer purchasing behavior, and continued competitive dynamics.” (Learn more) And Mintel’s Jonny Forsyth said, “The vast majority of consumers do not care enough about sustainability to actually alter their food and drink habits.” Only about 10% say they will pay more for a sustainability label. (Learn more)
Why it matters: Sustainability positioning doesn’t insulate against affordability pressure right now. What moved units for Flowers was Perfectly Crafted (up 9%) and Canyon Bakehouse in gluten-free. Format specificity beats brand reputation when budgets are tight.
Protein demand is at a 7-year high, GLP-1 users nearly doubled, and successful brands built for convenience in advance
Circana’s 2026 Eating Patterns report finds 48% of U.S. adults actively seeking more protein, up 7 points year-over-year, second only to vegetables as a nutritional priority. GLP-1 users jumped from 4.8% to 8.5% of adults in one year, and 65% of those users prioritize protein. At the same time, 50% of all meals are prepared in under five minutes, and snacking is shifting from between-meal occasions to replacing meals entirely. That combination is a real portfolio question: the categories positioned around high-protein, fast-prep, and portable formats are structurally aligned with where consumer behavior is heading. (Learn more)
Smucker’s Uncrustables posted 12% net sales growth in Q1, driven by a 10% volume increase, and hit $1 billion in annual sales at just 27% household penetration. CEO Mark Smucker credited the fridge-friendly format and an expanded morning protein line for driving new daypart consumption. (Learn more) Sara Lee Frozen Bakery CMO Johnni Rodgers pointed to the same shift. Consumers “still want dessert” but are “simply becoming more thoughtful about how and when they indulge,” which rewards portable, individually portioned formats over center-store staples. Smucker is accelerating its McCalla, Alabama facility to keep pace. (Learn more)
Why it matters: A household penetration of 27% on a $1 billion brand is about category-building rather than market share. Convenient, portable formats built years ago are thriving now.
The Food Exec Brief provides weekly insights for food and beverage manufacturing leaders and publishes every Friday.
