Dive Brief:
- General Mills, Inc. said it will explore opportunities for investment in "four businesses with tailwinds" — Häagen Dazs ice cream, snack bars, Old El Paso and natural and organic at a presentation at the Consumer Analyst Group of New York meeting in Florida, according to Food Business News.
- General Mills president and chief operating officer Jeffrey L. Harmening said at the meeting that while Häagen Dazs has been increasing at an annual 5% clip over the last two years, those growth numbers could rise even more.
- The natural and organic segment has been the strongest growth category for the company over the last few years. It's shown increases of an average of 10% per year since 2005, which has positioned the category as a $1 billion retail category.
Dive Insight:
It might seem surprising to see General Mills put its staple products of cereal and yogurt on the back burner for now, but it makes sense that the company is exploring different places to throw innovation behind.
Cereal has been steadily losing market share to other more convenient breakfast foods over the last number of years and the company has seen yogurt sales decline, as well. In fact, the company’s most recent quarter showed a 17% year-over-year sales decline in yogurt. General Mills recently rolled out new products aimed at "renovating" the flagging segment, but their impact on the bottom line is still unknown.
The company recently introduced Nature Valley nut butter products, which are aimed at consumers looking for more decadent products with wholesome goodness. This is an area where the manufacturer might see an increase as it continues to innovate in the category. Harmening admitted that Fiber One has recently been slow to grow, though it recently introduced layered bars with new flavors.
Ice cream is perpetually popular. Even with consumers looking for lower sugar and better-for-you products, they tend to favor indulgent products, especially frozen treats.
Hispanic food is becoming more popular, with high-end products being snapped up by consumers of all backgrounds. Old El Paso has been a successful brand for General Mills,which could continue taking the brand into new markets with new products, like last year’s successful launch of its Mini Stand ‘n Stuff soft tortillas.