- General Mills has introduced more than a dozen products in the U.S. this summer that incorporate fresh, simpler ingredients, the company said in a statement.
- The "modernization" of its portfolio includes Old El Paso Blue Corn Stand ‘n Stuff Taco Shells with three ingredients; Oui by Yoplait, a new French-style yogurt using simple ingredients such as whole milk, pure cane sugar and real pieces of fruit packaged inside a clear glass container; and Apple Cinnamon Toast Crunch made with actual apples and cinnamon, and without artificial colors or flavors.
- “Regardless of the changing consumer landscape, one thing remains consistent, people still want great-tasting products,” Jeff Harmening, chief executive officer of General Mills, said in a statement. “We’re increasing our levels of innovation across the board, with a laser focus on delivering exceptional taste with simple ingredients.”
As consumers started moving toward healthier, fresher and more recognizable ingredients, General Mills and other food manufacturers were slow to innovate — until recently. Food companies improved the health profile of about 180,000 products in 2016, an increase of more than 100,000 items from the prior year, according to the Consumer Goods Forum. With shopper preferences unlikely to change, and more nimble upstart companies rolling out dozens of new products, food manufacturers have had little choice but to respond.
Harmening, who recently took the helm at General Mills, drew praise during his more than two decades at the Minnesota company for pushing it toward more natural products. These include its purchase of Annie's for $820 million three years ago, and the removal of artificial colors from many of General Mills' cereals. While much of the work on the products introduced by General Mills this summer likely occurred under the watch of his predecessor, it's a good bet that Harmening played a key role in pushing the company to make these changes.
The biggest hit to General Mills in recent years has been in its yogurt business — about 13% of its sales. Chobani overtook the company's Yoplait, the segment's long-established leader, to become the U.S.'s largest brand in the segment last year. Last year, General Mills committed to overhauling 60% of the business to better align with consumer trends by adding new Greek varieties, flavors and organic options. Its new French-style yogurt creation announced in June was part of that effort to stem the downturn in its yogurt business.
Brittany Weissman, an analyst at Edward Jones, said in a note after the company's earnings last month that while General Mills "faces many challenges," improving sales trends and continued cost savings should drive improved 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 adding back some advertising and promotional support behind its brands and bringing more news to products through new product innovation," Weissman said. "While we don't expect sales to turn positive in the near term, we look for declines to lessen as the company shifts its focus back to sales growth."
The new line of products, which also includes Progresso Organic soups and Betty Crocker Original Recipe cake mixes with only recognizable pantry ingredients, are a good start for General Mills. It's likely that the impact from these new products will take several quarters to shore up the company's bottom line — if they can catch on with consumers skeptical of anything coming from big food producers. In the meantime, General Mills would be wise to introduce even more healthy, simpler products — something the company most likely is already working in earnest.