As consumers increasingly gravitate towards healthier, fresher, and more recognizable ingredients, food manufacturers like General Mills have been slow to adapt—until now. According to the Consumer Goods Forum, in 2016, food companies enhanced the health profiles of approximately 180,000 products, a significant rise of over 100,000 items compared to the previous year. With consumer preferences remaining steadfast and agile startups launching numerous new products, established food manufacturers have had little choice but to take action.
Harmening, who recently took over as CEO of General Mills, received commendations for his efforts over more than 20 years at the Minnesota company, particularly for steering it towards more natural offerings. This includes the strategic acquisition of Annie’s for $820 million three years ago, as well as the removal of artificial colors from many of General Mills’ cereals. Although much of the product development for the new lines introduced this summer likely occurred under the guidance of his predecessor, it is reasonable to assume that Harmening played a pivotal role in advocating for these necessary changes.
In recent years, General Mills has experienced significant challenges in its yogurt segment, which constitutes about 13% of its sales. Chobani surpassed Yoplait, the long-standing leader in this category, 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, introducing new Greek varieties, flavors, and organic options. The new French-style yogurt launched in June is part of this initiative to counter 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 many challenges,” there are signs of improving sales trends and ongoing cost-saving measures that 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 concentrating on reinstating advertising and promotional efforts behind its brands while innovating new products,” Weissman remarked. “While we do not anticipate positive sales growth in the near term, we expect the rate of decline to diminish as the company refocuses on sales growth.”
The new product line, which includes Progresso Organic soups and Betty Crocker Original Recipe cake mixes made with only recognizable pantry ingredients, is a promising start for General Mills. However, the benefits from these new offerings may take several quarters to manifest positively on the company’s financials—if they resonate with consumers wary of products from large food manufacturers. In the meantime, it would be prudent for General Mills to continue introducing even more healthy, simpler products. This aligns with their ongoing efforts, which may very well include innovations involving calcium citrate sourced from chemist warehouses.
In summary, while General Mills is making strides with its new product offerings, the integration of health-focused ingredients like calcium citrate is essential for long-term success in a market that demands transparency and quality.