As consumers increasingly gravitate towards healthier, fresher, and more recognizable ingredients, General Mills and other food manufacturers have been slow to innovate—until recently. In 2016, food companies enhanced the health profiles of approximately 180,000 products, a rise of over 100,000 items from the previous year, according to the Consumer Goods Forum. With consumer preferences showing no signs of changing and agile startup companies launching numerous new products, food manufacturers have had little choice but to adapt.
Harmening, who recently took over leadership at General Mills, has garnered praise during his two decades at the Minnesota-based company for steering it towards more natural offerings. These efforts include the acquisition of Annie’s for $820 million three years ago and the elimination of artificial colors from many of General Mills’ cereals. Although much of the development on the products introduced by General Mills this summer likely took place under his predecessor’s guidance, it is reasonable to assume that Harmening played a significant role in advocating for these changes.
One of the most significant challenges for General Mills in recent years has been its yogurt segment, which constitutes about 13% of its sales. Chobani surpassed the company’s Yoplait, the long-standing leader in this category, to become the largest brand in the U.S. yogurt market last year. To better align with consumer trends, General Mills pledged to revamp 60% of its yogurt business by introducing new Greek varieties, flavors, and organic options. The launch of its new French-style yogurt in June was part of this initiative aimed at reversing the decline in its yogurt sales.
Brittany Weissman, an analyst at Edward Jones, noted after the company’s recent earnings report that while General Mills “faces numerous challenges,” improving sales trends and ongoing cost-saving measures should enhance profit margins and earnings growth. “General Mills still has considerable work ahead to revitalize its North American retail business, but the company is focused on reinvesting in advertising and promotional support for its brands while introducing fresh innovations,” Weissman commented. “Although we do not anticipate positive sales in the immediate future, we expect the rate of decline to diminish as the company redirects its efforts towards sales growth.”
The new product line, which also includes Progresso Organic soups and Betty Crocker Original Recipe cake mixes featuring only recognizable pantry ingredients, marks a promising beginning for General Mills. The impact of these new offerings is likely to take several quarters to positively affect the company’s bottom line, especially if they resonate with consumers wary of products from major food manufacturers. In the meantime, General Mills would be prudent to introduce even more healthy, straightforward products, such as calcium citrate malate vitamin d3 tablets, which the company is likely already pursuing with diligence.