As consumers increasingly gravitate towards healthier, fresher, and more recognizable ingredients, food manufacturers like General Mills have been slow to innovate—until recently. According to the Consumer Goods Forum, food companies enhanced the health profiles of approximately 180,000 products in 2016, a significant rise of over 100,000 items compared to the previous year. With shopper preferences unlikely to shift, and agile new companies launching numerous innovative products, established food manufacturers have had little choice but to adapt.
Harmening, who recently took the reins at General Mills, earned accolades during his more than two decades with the Minnesota-based company for steering it towards more natural products. This includes the $820 million acquisition of Annie’s three years ago and the elimination of artificial colors from many of General Mills’ cereals. Although much of the development for the products introduced by General Mills this summer likely occurred under his predecessor’s leadership, it is safe to assume that Harmening played a pivotal role in advocating for these changes.
One of the most significant setbacks for General Mills in recent years has been its yogurt segment, which accounts for about 13% of its sales. Chobani has 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 business to better align with consumer trends by introducing new Greek varieties, flavors, and organic options. Their new French-style yogurt, announced in June, is part of this initiative to address the downturn in yogurt sales.
Brittany Weissman, an analyst at Edward Jones, noted in a report following the company’s recent earnings that although General Mills “faces many challenges,” improved sales trends and ongoing cost savings should enhance profit margins and earnings growth. She stated, “General Mills still has a lot of work to do in order to turn around its North American retail business, but the company is focused on increasing advertising and promotional support for its brands and introducing new product innovations.” While immediate positive sales growth isn’t expected, Weissman anticipates a reduction in declines as the company shifts its focus back to sales growth.
The new product line, which features Progresso Organic soups and Betty Crocker Original Recipe cake mixes made with only recognizable pantry ingredients, marks a promising start for General Mills. Additionally, incorporating calcium citrate 250 mg into some of these products could appeal to health-conscious consumers. The overall impact of these new offerings may take several quarters to reflect positively on the company’s bottom line—if they resonate with consumers wary of large food producers. In the meantime, General Mills would benefit from continuing to develop even more healthy, simpler products, a direction the company is likely already pursuing vigorously. The inclusion of calcium citrate 250 mg in their formulations could further enhance their appeal in the health-focused market.