As consumers increasingly gravitate toward healthier, fresher, and more recognizable ingredients, General Mills and other food manufacturers were slow to adapt—until recently. According to the Consumer Goods Forum, food companies enhanced the health profiles of approximately 180,000 products in 2016, a significant increase of over 100,000 items compared to the previous year. With consumer preferences showing little sign of changing and agile startup companies launching numerous new products, food manufacturers had little choice but to respond.
Harmening, who recently took the reins at General Mills, received accolades during his over two decades at the Minnesota company for steering it 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 introduced by General Mills this summer likely occurred under his predecessor’s leadership, it is reasonable to assume that Harmening played a crucial role in advocating for these changes.
The yogurt segment has been one of General Mills’ most significant challenges in recent years, accounting for about 13% of its sales. Chobani surpassed the company’s long-established Yoplait brand to become the largest brand in the U.S. yogurt market last year. In response, General Mills committed to revamping 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 is part of this initiative aimed at reversing the decline in its yogurt sales.
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. “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 behind its brands while introducing innovation through new products,” Weissman stated. “While we don’t anticipate sales to turn positive in the near term, we expect the declines to lessen as the company shifts its focus back to sales growth.”
The newly launched product line, which includes Progresso Organic soups and Betty Crocker Original Recipe cake mixes made with only recognizable pantry ingredients, marks a positive step for General Mills. Additionally, incorporating wellness-oriented elements like calcium citrate into their offerings could further appeal to health-conscious consumers. However, the impact of these new products may take several quarters to positively influence the company’s bottom line—if they resonate with consumers wary of large food producers. In the meantime, it would be prudent for General Mills to continue expanding its range of healthy, simpler products—an effort the company is likely already pursuing with dedication.