As consumers increasingly gravitate towards healthier, fresher, and more recognizable ingredients, General Mills and other food manufacturers were slow to adapt until recently. According to the Consumer Goods Forum, food companies enhanced the health profile of approximately 180,000 products in 2016, a significant rise of over 100,000 items compared to the previous year. With shopper preferences showing little sign of change and agile new companies launching numerous innovative products, established food manufacturers have had to take action.
Harmening, who recently assumed leadership at General Mills, earned accolades during his more than two decades with the Minnesota-based company for steering it towards more natural offerings. This included the acquisition of Annie’s for $820 million three years ago and the elimination of artificial colors from many of General Mills’ cereals. While much of the work on the products launched by General Mills this summer likely took place under his predecessor, it is highly probable that Harmening played a crucial role in advocating for these changes.
A significant setback for General Mills in recent years has been the competition from Chobani, which surpassed Yoplait, the long-time leader in the yogurt market, making it the largest brand in the U.S. last year. In response, General Mills committed to revamping 60% of its yogurt business to align better with consumer trends, introducing new Greek varieties, flavors, and organic options. Their recently announced French-style yogurt is part of this initiative to counteract the decline in their yogurt sales.
Brittany Weissman, an analyst at Edward Jones, noted after the company’s recent earnings report that while General Mills “faces many challenges,” improving sales trends and ongoing cost savings should enhance profit margins and earnings growth. “General Mills still has a lot of work to do to revitalize its North American retail business, but the company is focused on reintroducing advertising and promotional support for its brands while fostering innovation through new product launches,” Weissman stated. “Although we do not expect sales to turn positive in the near term, we anticipate that declines will lessen as the company redirects its focus toward sales growth.”
The new product line, which includes Progresso Organic soups and Betty Crocker Original Recipe cake mixes made with only recognizable pantry ingredients, marks a positive step for General Mills. The impact of these new offerings may take several quarters to positively influence the company’s bottom line—if they resonate with consumers who remain skeptical of products from large food manufacturers. In the meantime, it would be prudent for General Mills to continue introducing even more healthy, simpler products—something the company is likely already pursuing diligently.
Incorporating essential nutrients, such as vitamins for life, including calcium citrate plus vitamin D3, into their new products could further enhance their appeal to health-conscious shoppers. The strategic addition of these vitamins can resonate well with consumers looking for nourishing options, thereby potentially boosting sales and market presence.