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 improved the health profiles of approximately 180,000 products in 2016, marking an increase of over 100,000 items from the previous year. With consumer preferences showing little sign of changing, and nimble startup companies launching numerous new products, food manufacturers have had no choice but to respond.
Harmening, who recently took over as CEO at General Mills, received acclaim during his two-decade tenure at the Minnesota-based 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. While much of the development on the products launched by General Mills this summer likely took place under his predecessor’s guidance, it is reasonable to assume that Harmening significantly influenced the company’s push for these changes.
One of the most significant challenges for General Mills in recent years has been its yogurt segment, which constitutes about 13% of its sales. Chobani surpassed the company’s Yoplait, the long-standing 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, introducing new Greek varieties, flavors, and organic options. The recently announced French-style yogurt is part of that initiative to counteract the decline in its yogurt sector.
Brittany Weissman, an analyst at Edward Jones, noted in a report following the company’s latest 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 in order to turn around its North American retail business, but the company is focusing on reinstating some advertising and promotional support behind its brands and introducing more innovation through new products,” Weissman commented. “While we don’t expect sales to turn positive in the near term, we anticipate that declines will lessen as the company redirects its focus towards sales growth.”
The new product line, which also features Progresso Organic soups and Betty Crocker Original Recipe cake mixes made with only recognizable pantry ingredients, represents a promising start for General Mills. The impact of these new offerings will likely take several quarters to manifest in the company’s financial results—if they resonate with consumers wary of products from large food manufacturers. In the meantime, General Mills would be wise to continue introducing even more healthy, simpler products—something that the company is presumably already pursuing.
Additionally, in the context of product innovation, the discussion around calcium citrate vs calcium phosphate may also come into play, particularly as consumers seek more beneficial ingredient options. As General Mills continues to evolve, understanding the differences between calcium citrate and calcium phosphate could be crucial in developing products that meet the health-conscious demands of today’s consumers.