Milling & Baking News - January 2, 2018 - 11

Business

General Mills reinforces
commitment to competing in cereal
Continued from Page 1

excited about its product pipeline
moving forward.
"If you think about the category,
it grew nicely during the financial
downturn," he said. "So between
2007 and 2012, the category grew. As
the economy gradually got better and
out-of-home eating increased, we saw
the category tip to negative. So we're
starting to see that moderate in terms
of the in-home versus out-of-home.
We also know that 30% consumption
of the category comes from boomers
and older adults, and that group of
consumers is going to grow. So we
absolutely believe in the category.
We believe that strong marketing and
good innovation can drive it. We're
committed to doing our part, and we
look forward to, again, driving our
growth as we move to the back half
and into the future."
A top priority
Back in July at the company's Investor Day, Mr. Nudi said driving improved performance in U.S. Cereal was
General Mills' top priority in North
America Retail. The company appears
to be on track in its pursuit of that goal.
U.S. cereal sales increased 7%
during the second quarter at General Mills, boosted by non-measured
channel growth, strong performance from Chocolate Peanut Butter
Cheerios and other quarterly timing
shifts, Mr. Nudi said.
"Four of our largest taste-oriented
cereals, which make up over onethird of our portfolio, are driving
our performance this year," he said.
"Year-to-date, retail sales for Lucky
Charms and Cocoa Puffs reached up
14%, while Cinnamon Toast Crunch
and Reese's Puffs are up 8%."
"Compelling consumer news" has
been a theme across General Mills'
top brands, Mr. Nudi said, adding
that the company will look to extend
its cereal momentum in the second
half behind some exciting innovation
and impactful marketing executions.
Chocolate Peanut Butter Cheerios,
which launched in October, is off to
a great start and is turning at the top
of the category, he said.
"We'll continue to fuel this new
product in the second half with strong
in-store support," Mr. Nudi said.
In January, General Mills is launching Blasted Shreds shredded heat
bakingbusiness.com / world-grain.com

cereal in Cinnamon Toast Crunch and
peanut butter chocolate flavors. Mr.
Nudi said the products are geared toward "invigorating the $400 million
shredded-wheat segment by delivering satiety and taste." The company
also will tap into the fast-growing

and renovating our products and
packaging returning to Fiber One's
core role, permissible indulgence. And
the retail sales are still down sharply
in the first half, driven by reduced distribution. Base sales per point of distribution have turned positive, which
is a good indicator of future trends."
Mr. Nudi said General Mills is
working to rebuild the innovation pipeline on Fiber One and will

'We look forward to, again, driving our
growth as we move to the back half and into
the future.'
- Jonathon J. Nudi,
General Mills, Inc.

nut butter channel with new almond
butter and peanut butter varieties of
Nature Valley cereals.
Snack bars a mixed bag
Beyond the R.-T.-E. cereal category,
General Mills has been confronted
with a "tale of two stories" within its
U.S. snacks bars business, Mr. Nudi
said. Nature Valley and Lärabar have
been strong performers, but Fiber
One has continued to struggle.
"Retail sales for Nature Valley
were up double digits so far this year,
helped by new advertising on our
core and excellent performance in
our new nut butter biscuits and granola cup platforms," he said. "And
Lärabar continues to deliver 30%
retail sales growth behind strong
distribution growth and investment
behind its Food Made From Food
campaign, which will continue in the
back half of the year.
"The story on Fiber One is more
challenging. We're working hard to
improve performance by refocusing
our messaging on our core consumer

launch eight new items in January,
including four flavors of Fiber One
Bites. Meanwhile, General Mills has
what Mr. Nudi described as "great
new indulgent offerings" on tap for
Nature Valley.
"Consumers are looking for indulgent treats made from real food,
so we're introducing Layered Bars
that have a triple layer of nut butter, granola with nuts and chocolate," he said. "And we're launching
soft-baked filled squares that combine whole grain oatmeal bars with
creamy peanut-butter filling. We're
supporting these launches with TV,
social media, digital coupons and
merchandising."
Income down 11% in quarter
Net earnings attributable to General
Mills in the second quarter ended Nov.
26 totaled $430.5 million, equal to 75c
per share on the common stock, which
was down 11% from $481.8 million, or
82c, in the prior-year period. Results
in the second quarter of fiscal 2018 included a $42 million charge related to
a prior-year tax adjustment. Excluding
items affecting comparability, the adjusted effective tax rate was 29.3% in
the second quarter of fiscal 2018, which
compared with 32.4% a year ago.
Net sales of $4,198.7 million were
up 2.1% from year-ago sales of
$4,112.1 million.
Net earnings attributable to General Mills in the first six months of
the year totaled $835.2 million, equal
to $1.46 per share, down 6% from
$890.8 million, or $1.50 per share.
Net sales dipped to $7,967.9 million,
down 0.6% from $8,020 million in the
same period of the prior year. MBN
Milling & Baking News

January 2, 2018 / 11

http://www.bakingbusiness.com http://www.world-grain.com

Milling & Baking News - January 2, 2018

Table of Contents for the Digital Edition of Milling & Baking News - January 2, 2018