Milling & Baking News Corporate Profiles - 2019 - 78

COMPANY OVERVIEW

General Mills, Inc.
Speed to market a key focus heading into 2020
eneral Mills, Inc.'s $8 billion acquisition of Blue Buffalo Pet Products, Inc.
during fiscal 2018 paid dividends, but
several other business units turned in weaker
performances during the year, leading to softer
earnings at the Minneapolis-based company.
Net income at General Mills in the year
ended May 26 totaled $1,752.7 million, equal
to $2.92 per share on the common stock,
down 18% from the year prior when the company earned $2,131 million, equal to $3.69
per share. General Mills' sales rose 7% to
$16,865.2 million during the year.
Executives at General Mills, Inc. have made
it known over the past several months that
speed to market will be a focus as it seeks ways
to spur growth moving forward. The company is
adopting a new mindset that favors speed over
perfection in product development, said Jonathon J. Nudi, president of North America Retail.
"In some cases, in the past, we might have
brought something to market as the trend was
leaving the market, because it took two or three
years to get there," Mr. Nudi said during the company's investor day on July 9 in New York. "Through
this consumer-first design process ... we're able
to get from idea to market in less than a year.
And as a result of that, we think we're going to be

on the front end of some of these trends."
General Mills' new approach involves distributing products into test markets quickly,
gathering consumer feedback and iterating to
improve the offering, Mr. Nudi said.
An example is Nature Valley crispy creamy
wafer bars, which recently hit retail shelves.
"These new bars are made with light and
crispy whole grain wafers, layers of peanut butter and crunchy granola topping, providing a
differentiated texture experience for consumers," Mr. Nudi said.
General Mills has identified three key priorities as it heads into fiscal 2020, led by a
continued push to improve growth in North
America Retail by maintaining momentum on
cereal and improving yogurt and snacks.
Despite a long track record of growth, U.S.
snacks failed to perform up to expectations during fiscal 2019. Jeffrey L. Harmening, chairman
and chief executive officer, over the past year has

cited struggles in both Fiber One and Nature Valley. In the case of Fiber One, he said the brand
"fell out of step with modern weight managers."
In a Sept. 18 conference call with analysts,
Mr. Harmening spoke more positively about
the brands, noting that retail sales trends for
Nature Valley improved each month during the
first quarter of fiscal 2020 behind the wafer bar
innovation, while retail sales for Fiber One have
been boosted by a reformulation of the product.
Speaking Sept. 4 at the Barclays Global
Consumer Staples Conference in Boston, Mr.
Nudi was upbeat about the prospects for the
company's cereal business.
"We're very clear on who our consumers are
for each of our brands and have relevant marketing," he said of the company's cereal business.
Innovation also has been strong for the Minneapolis-based cereal giant. Mr. Nudi said in fiscal
2019 General Mills had five of the top six new
products launched in the R.-T.-E. cereal category.
Moving forward, Mr. Nudi said he expects the
R.-T.-E. cereal category to grow.
"We don't think it's going to be in mid-single
digit, but just grow a little bit," he said. "And
we feel confident about our plans to be able to
perform well, and it can ... drive the category
as well. In terms of inventory, I mean, we've

Chief executive officer -
Jeffrey L. Harmening

General Mills, Inc. net earnings

General Mills, Inc. net sales

(fiscal years ended in May)

General Mills share price

per share
$58

$1,658

2017

78 \ November 2019

$2,131

2018

$1,753

2019

in millions

$52
$46

$15,620

$15,740

$16,865

2017

2018

2019

$40
$34
Oct.
2018

Dec.

Milling & Baking News * Food Business News * Baking & Snack * Meat+Poultry * Pet Food Processing

Feb. April
2019

June

Aug.

Oct.

Corporate Profiles

Milling & Baking News Corporate Profiles - 2019

Table of Contents for the Digital Edition of Milling & Baking News Corporate Profiles - 2019