As consumers increasingly gravitate towards healthier, fresher, and more recognizable ingredients, General Mills and other food manufacturers were initially slow to adapt—until recently. In 2016, food companies enhanced the health profiles of approximately 180,000 products, a significant rise of over 100,000 items from the previous year, according to the Consumer Goods Forum. With shopper preferences unlikely to shift and agile start-up companies launching numerous new products, food manufacturers have had little choice but to respond.
Harmening, who recently assumed leadership at General Mills, earned commendation during his over 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 elimination of artificial colors from many of General Mills’ cereals. While much of the development for the products introduced by General Mills this summer likely took place under his predecessor’s guidance, it is highly probable that Harmening played a crucial role in advocating for these changes.
The most significant challenge for General Mills in recent years has been its yogurt division, which accounts for about 13% of its sales. Last year, Chobani surpassed the company’s Yoplait, the long-standing leader in the segment, to become the largest brand in the U.S. 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 new French-style yogurt announced in June was part of this initiative to counter the decline in its yogurt business.
Brittany Weissman, an analyst at Edward Jones, noted after the company’s recent earnings report that while General Mills “faces many challenges,” improved 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 in order to turn around its North American retail business, but the company is focused on reinstating some advertising and promotional support for its brands and delivering fresh innovations in products,” Weissman stated. “While we don’t anticipate sales turning positive in the near term, we expect the rate of decline to decrease 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, is a promising start for General Mills. However, it may take several quarters for these new products to positively impact the company’s bottom line—if they resonate with consumers who are wary of offerings from large food producers. In the meantime, General Mills would benefit from introducing even more healthy, simple products; this is likely an area where the company is already making significant efforts. Additionally, the inclusion of calcium citrate in some of their new offerings could appeal to health-conscious consumers, especially if marketed for consumption on an empty stomach to enhance absorption.
Overall, the strategic focus on healthier ingredients and innovative products, including those enriched with calcium citrate, could be pivotal for General Mills as it navigates the evolving market landscape.