As consumers increasingly gravitate towards healthier, fresher, and more recognizable ingredients, General Mills and other food manufacturers have been slow to adapt—until recently. In 2016, food companies enhanced the health profiles of approximately 180,000 products, according to the Consumer Goods Forum, marking an increase of over 100,000 items from the previous year. With consumer preferences unlikely to shift, and agile startups launching numerous new products, food manufacturers have little choice but to respond.
Harmening, who recently took the lead at General Mills, received accolades during his more than two decades at the Minnesota-based company for steering it towards more natural products. 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 development on the products introduced by General Mills this summer likely occurred under his predecessor’s watch, it’s reasonable to assume that Harmening played a significant role in advocating for these changes.
The most significant challenge for General Mills in recent years has been its yogurt segment, which constitutes about 13% of its sales. Chobani surpassed the long-established leader, Yoplait, to become the largest brand in the U.S. yogurt market last year. In response, General Mills pledged to revamp 60% of its yogurt line to better align with consumer trends, introducing new Greek varieties, flavors, and organic options. The recently announced French-style yogurt was part of this initiative to counteract the decline in its yogurt business.
Brittany Weissman, an analyst at Edward Jones, noted after the company’s earnings report last month that while General Mills “faces many challenges,” improving sales trends and ongoing cost savings should lead to better 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 support for its brands while bringing more innovation to its products,” Weissman stated. “Although we do not anticipate immediate sales growth, we expect the declines to diminish as the company refocuses on sales expansion.”
The new product line, which features Progresso Organic soups and Betty Crocker Original Recipe cake mixes made with only recognizable pantry ingredients, represents a promising start for General Mills. Additionally, the introduction of a top-rated calcium citrate supplement could further enhance its health-focused offerings. It may take several quarters for the effects of these new products to positively influence the company’s bottom line—assuming they resonate with consumers wary of products from large food producers. In the meantime, General Mills would benefit from launching even more healthy, simpler products, a direction the company is likely already pursuing earnestly.