“General Mills’ Shift Towards Healthier Offerings: A Response to Consumer Demands and Market Challenges”

As consumers increasingly gravitate towards healthier, fresher, and more recognizable ingredients, food manufacturers, including General Mills, have been slow to adapt — until recently. According to the Consumer Goods Forum, food companies enhanced the health profile of approximately 180,000 products in 2016, which marked an increase of over 100,000 items from the previous year. With shopper preferences unlikely to shift and nimble startup companies introducing numerous new products, food manufacturers have found it necessary to respond.

Harmening, who recently took over as CEO of General Mills, has received accolades during his two decades at the Minnesota-based company for steering it towards more natural offerings. This includes the acquisition of Annie’s for $820 million three years ago and the removal of artificial colors from many of General Mills’ cereals. While much of the development for the products launched by General Mills this summer likely took place under his predecessor, it is reasonable to assume that Harmening played a significant role in advocating for these adjustments.

One of the most significant challenges General Mills has faced in recent years has been in its yogurt division, which accounts for about 13% of its sales. Chobani surpassed the company’s Yoplait, the longstanding leader in this segment, to become the largest brand in the U.S. last year. In response, General Mills committed to revamping 60% of its yogurt business to better align with consumer trends by introducing new Greek varieties, flavors, and organic options. The recent launch of its French-style yogurt in June was a part of this effort to counteract the decline in its yogurt sales.

Brittany Weissman, an analyst at Edward Jones, noted after the company’s earnings report last month 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 turn around its North American retail business, but the company is focused on reinvesting in advertising and promotional support behind its brands while introducing new products,” Weissman stated. “While we don’t anticipate sales turning positive in the near term, we expect declines to diminish as the company shifts its focus back to 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 promising beginning for General Mills. These offerings are likely to take several quarters to positively impact the company’s bottom line, particularly if they resonate with consumers wary of products from large food manufacturers. In the meantime, General Mills would benefit from the introduction of even more healthy, simple products, such as those featuring calcium citrate 630, which the company is likely already developing diligently.