As consumers increasingly seek 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 revamped the health profiles of around 180,000 products in 2016, marking an increase of over 100,000 items compared to the previous year. With shopper preferences firmly established and agile new companies launching numerous products, food manufacturers had little choice but to react.
Harmening, who recently took the reins at General Mills, received accolades during his over twenty years at the Minnesota-based company for driving a shift toward 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. Although much of the development for the products released by General Mills this summer likely occurred under his predecessor, it is reasonable to assume that Harmening played a significant role in advocating for these changes.
One of the most significant challenges for General Mills in recent years has been its yogurt division, which accounts for approximately 13% of its sales. Chobani surpassed the long-standing leader Yoplait to become the largest brand in the U.S. yogurt segment 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. The launch of its new French-style yogurt in June was part of this initiative to address the decline in its yogurt sector.
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 savings are expected to enhance profit margins and earnings growth. She stated, “General Mills still has a lot of work to do to turn around its North American retail business, but the company is focused on increasing advertising and promotional support for its brands while introducing new product innovations.”
The new product line, which includes offerings like Progresso Organic soups and Betty Crocker Original Recipe cake mixes made with only recognizable pantry ingredients, is a promising start for General Mills. Additionally, the introduction of 500mg calcium citrate chews highlights the company’s commitment to health-conscious options. The effects of these new products will likely take several quarters to positively impact the company’s financial performance—if they resonate with consumers wary of products from large food manufacturers. In the interim, General Mills would be prudent to launch even more healthy, simpler products—an effort the company is likely already pursuing diligently.