- Food manufacturer General Mills named Jeff Harmening as its new CEO starting June 1, the company said in a statement. He takes over for Ken Powell, who has been CEO and chairman since 2007.
- Currently the chief operating officer, Harmening has been with the food maker for 23 years. He was widely seen as the logical successor to Powell when he announced his retirement. General Mills also said Harmening was elected to the company's board of directors.
- "General Mills has a long tradition of delivering top-tier returns that our shareholders have counted on for generations," Powell said. "We are focused on growth and feel strongly that Jeff is the right leader for the next leg of our journey."
The change in leadership at the Minnesota-based food company, which makes Cheerios, Annie's, Yoplait and Nature Valley, comes as it faces seven straight quarters of declining sales. The manufacturer's woes are no different than those affecting other food and beverage giants as consumers seek healthier and fresher alternatives and shift away from packaged products such as cereal. Established food giants also face the challenge of trendy upstart companies that are able to more quickly introduce new products in line with public tastes and beliefs.
For General Mills, the biggest impact has been in yogurt — about 13% of its sales — where Chobani has overtaken the company's Yoplait, the segment's long-established leader, to become the largest U.S. brand in the segment last year. General Mills has committed to overhauling 60% of its yogurt business through Greek varieties, flavors and other options, but so far those efforts have yet to resonate with consumers.
Harmening will need to focus his efforts at improving the company's yogurt and cereal operations, while accelerating efforts to introduce new or reformulated products and boost growth. The 151-year old company has removed artificial flavors and colors from some of its cereals — a decision popular with consumers, but that has not been enough to revive U.S. retail sales of cereal, which fell 3% during its most recent quarter. The company also has focused on removing gluten from its products because so many consumers are avoiding it.
When Harmening takes the helm next month, he may have not have much to learn given his experience with General Mills. His time with the company and in the food industry as a whole should be extremely beneficial — and he may well come into the job with a clear roadmap for where he wants to take the company. At first glance, however, Wall Street appeared unimpressed with the appointment: General Mills' stock hit a 52-week low on Wednesday.
It will be particularly interesting to see where Harmening stands on M&A strategy and whether he pursues mergers agressively — like General Mills did in buying Annie's, which boasts lines of mac and cheese, cereal and yogurt, for $820 million three years ago. Harmening could look to a mega-deal to boost growth, or even find himself on the receiving end of an offer from another company. Earlier this year, Kraft Heinz proposed to buy Unilever for $143 billion this February but the deal was quickly scuttled over price. Analysts have speculated that it's only a matter of time before bigger-name players in the food and beverage look to consolidate.