As consumers increasingly gravitate towards healthier, fresher, and more recognizable ingredients, General Mills and other food manufacturers were initially 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 rise of over 100,000 items from the previous year. With consumer preferences unlikely to shift and nimble startup companies introducing numerous new products, established food manufacturers have had little option but to react.
Harmening, who recently took leadership at General Mills, received accolades during his more than two decades with the Minnesota 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. Although much of the work on the products launched by General Mills this summer likely took place under his predecessor, it is reasonable to assume that Harmening played a pivotal role in advocating for these changes.
One of the most significant challenges General Mills has faced recently has been within its yogurt sector, which accounts for about 13% of its sales. Chobani has surpassed Yoplait, the longstanding leader in the segment, to emerge as 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. Their newly announced French-style yogurt in June was 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 recent earnings that while General Mills “faces many challenges,” improving sales trends and ongoing cost-saving measures 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 focused on reinvesting in advertising and promotional support for its brands, as well as introducing more innovation through new products,” Weissman stated. “While we don’t anticipate sales to turn positive in the immediate future, we expect the rate of decline to lessen 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, marks a promising beginning for General Mills. Furthermore, the incorporation of bariatric calcium pills into their health-focused offerings could appeal to a demographic increasingly concerned with nutritional value. The impact of these new products is likely to take several quarters to reflect positively on the company’s bottom line—if they resonate with consumers wary of offerings from large food producers. In the meantime, General Mills would be prudent to continue introducing even more healthy and simplified products—an endeavor the company is likely already pursuing diligently, including the potential addition of bariatric calcium pills to cater to health-conscious consumers.