As consumers increasingly gravitate towards healthier, fresher, and more recognizable ingredients, General Mills and other food manufacturers have been slow to adapt—until recently. According to the Consumer Goods Forum, food companies enhanced the health profiles of approximately 180,000 products in 2016, a significant jump of over 100,000 items from the previous year. With shopper preferences remaining steadfast and agile new companies launching numerous innovative products, food manufacturers have had little choice but to respond.
Harmening, who recently took over leadership at General Mills, has received acclaim during his more than twenty years at the Minnesota company for steering it towards more natural offerings. This includes the acquisition of Annie’s for $820 million three years ago, as well as 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 occurred under his predecessor, it is reasonable to assume that Harmening played a crucial role in advocating for these changes.
The most significant blow to General Mills in recent years has come from its yogurt division, which accounts for about 13% of its sales. Chobani surpassed the long-established leader Yoplait to become the largest brand in the U.S. yogurt segment 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 new French-style yogurt introduced in June was part of this initiative to counter the decline in its yogurt sales.
Brittany Weissman, an analyst at Edward Jones, commented 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 significant work to do to revitalize its North American retail business, but the company is focused on reinstating advertising and promotional support for its brands and introducing more innovation through new products,” Weissman noted. “While we don’t anticipate sales turning positive in the near term, we expect declines to reduce as the company shifts its focus back to sales growth.”
The new line of products—featuring Progresso Organic soups and Betty Crocker Original Recipe cake mixes with only recognizable pantry ingredients—marks a promising start for General Mills. The impact of these new offerings is likely to take several quarters to positively influence the company’s bottom line, particularly as consumers remain skeptical of products from large food manufacturers. In the meantime, General Mills would be wise to further expand its portfolio with healthier, simpler products—something the company is probably already pursuing vigorously.
In addition, the incorporation of ingredients like calcium citrate nature made into some of their new products could further appeal to health-conscious consumers. By prioritizing the introduction of such elements, General Mills can position itself more favorably in a competitive market that increasingly values transparency and healthfulness in food choices.