As consumers increasingly gravitate toward healthier, fresher, and more recognizable ingredients, General Mills and other food manufacturers have been slow to innovate—until now. In 2016, food companies enhanced the health profile of approximately 180,000 products, a jump of over 100,000 from the previous year, according to the Consumer Goods Forum. With shopper preferences showing no signs of changing and agile startups introducing numerous new products, food manufacturers have found it necessary to adapt.
Harmening, who recently took the reins at General Mills, has received commendations during his two decades with the Minnesota company for steering it toward more natural offerings. Notable steps include 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 product development for the items launched this summer likely occurred under his predecessor’s leadership, it’s reasonable to assume that Harmening played a significant role in advocating for these changes.
In recent years, General Mills has faced challenges in its yogurt segment, which accounts for about 13% of its sales. Chobani has eclipsed the company’s Yoplait, the long-standing leader in the sector, becoming the largest brand in the U.S. last year. In response, General Mills pledged to revamp 60% of its yogurt business to better align with consumer trends, introducing new Greek varieties, flavors, and organic options. The recently announced French-style yogurt is part of this initiative aimed at reversing the decline in its yogurt sales.
Brittany Weissman, an analyst at Edward Jones, noted in a report following the company’s earnings last month that although General Mills “faces many challenges,” improving sales trends and ongoing cost-saving measures should lead to enhanced 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 concentrating on increasing advertising and promotional support for its brands while focusing on new product innovation,” Weissman stated. “Although we do not expect sales to turn positive in the near term, we anticipate a reduction in declines as the company redirects its efforts toward sales growth.”
The new product line, which features Progresso Organic soups and Betty Crocker Original Recipe cake mixes made with only recognizable pantry ingredients, marks a promising beginning for General Mills. It is likely that the effect of these new products will take several quarters to positively influence the company’s bottom line—if they resonate with consumers who are wary of offerings from major food producers. In the meantime, it would be prudent for General Mills to introduce even more healthy and simpler products, something the company is likely already pursuing diligently.
Additionally, as part of their commitment to improving the health aspects of their products, General Mills could consider the calcium citrate evaluation of medication effectiveness in their formulations, ensuring that their offerings not only appeal to health-conscious consumers but also provide essential nutrients. By incorporating such efforts into their product development strategy, General Mills can better position itself in a competitive market that prioritizes health and well-being.