As consumers increasingly gravitate toward 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 profile of approximately 180,000 products in 2016, a significant increase of over 100,000 items compared to the previous year. With consumer preferences remaining steadfast and agile startups launching numerous new products, food manufacturers have had little choice but to respond.
Harmening, who recently took the reins at General Mills, has been lauded during his two-decade tenure at the Minnesota company for steering it toward more natural offerings. Notable actions include the acquisition of Annie’s for $820 million three years ago and the elimination of artificial colors from many of its cereals. Although much of the development for the products introduced by General Mills this summer likely occurred under his predecessor, it’s reasonable to assume that Harmening was influential in prompting these changes.
One of the most significant challenges General Mills has faced in recent years has been within its yogurt segment, which accounts for about 13% of its sales. Chobani has surpassed Yoplait, the long-established leader in this category, to become 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 by introducing new Greek varieties, flavors, and organic options. The announcement of its new French-style yogurt in June was part of this initiative to counteract the decline in its yogurt sales.
Brittany Weissman, an analyst at Edward Jones, noted in a report following the company’s recent earnings that while General Mills “faces many challenges,” improving sales trends and ongoing cost savings should enhance profit margins and drive 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 reintroducing advertising and promotional support for its brands and bringing more innovation to their products,” Weissman stated. “While we don’t anticipate sales to turn positive in the near term, we expect the declines to lessen as the company shifts its focus back to growth.”
The new product line, which features Progresso Organic soups and Betty Crocker Organic Recipe cake mixes made with only recognizable pantry ingredients, is a promising start for General Mills. The impact of these new offerings may take several quarters to reflect positively on the company’s financial performance — provided they resonate with consumers who are wary of products from large food manufacturers. In the meantime, it would be prudent for General Mills to introduce even more healthy and simple products, something the company is likely already diligently pursuing. Additionally, incorporating items like solaray calcium into their product offerings could further align with consumer desires for health-focused choices.