uploads///General Mills Segment Performance by Category

How General Mills Plans to Grow Retail Performance in Fiscal 2016

By

Mar. 29 2016, Updated 12:00 p.m. ET

Retail sales performance

To improve its retail sales performance in 2016, General Mills (GIS) is investing in advertising and in-store promotions. It plans to launch three flavors of restaurant-style sauces in the second half of this year.

The company also plans to accelerate yogurt, snacks, and cereal growth through innovation. It plans to drive the double-digit growth of the natural and organic portfolio.

Article continues below advertisement

Let’s look at retail sales for fiscal 3Q16

General Mills (GIS) saw retail sales improvement for the fourth consecutive quarter. The company continues to see growth in all of its categories. High competitive activity affected the net sales for the Yogurt operating unit. Reduced display merchandising mainly impacted the Cereal and Snacks results. Retail sales trends in the Cereal category have improved in fiscal 2016 so far.

Consumer First product renovation, effective messaging and on-trend innovation is driving this growth. General Mills’ product renovation initiatives seem to be benefiting the Cereal business. Retail sales of gluten-free Cheerios varieties have increased 2% since the product line was launched.

New initiatives

As of January 2016, 75% of the company’s cereals no longer include artificial flavors and colors. Around seven of the cereals received recipe changes in January. These cereals delivered 6% retail sales growth since their launch, after suffering a 6% decline last year. Cinnamon Toast Crunch delivered 8% retail sales growth this year.

As part of the Cereal segment’s innovation efforts in recent years, Nature Valley was launched as a protein granola product. It has been extended to include ready-to-eat cereal, muesli, granola bites, and oatmeal. Retail sales for this franchise showed a 44% improvement last year and a 35% improvement so far in 2016, owing to a combination of media support, new product news, and sampling.

General Mills (GIS) feels that yogurt is an attractive growth category for the long term. To drive growth in this category, it is taking initiatives such as expanding usage occasions, generating news, and attracting new consumers. The company is confident that innovation and effective marketing could be the key factors for growth in this category over time.

General Mills’ peers Snyder Lance (LNCE), Ingredion (INGR), and Hain Celestial (HAIN) returned -10.3%, 10.01%, and 1.3%, respectively, year-to-date. The PowerShares DWA Consumer Staples Momentum Portfolio ETF (PSL) invests 2.5% of its portfolio in INGR.

Advertisement

More From Market Realist

  • Honeywell sign
    Earnings Report
    CNBC Pro Stocks to Buy Before Q1 Earnings
  • Men walking by Morgan Stanley headquarters
    Financials
    Morgan Stanley’s (MS) Stock Forecast Before Q1 Earnings
  • Carnival cruise ship sailing
    Consumer
    Carnival's (CCL) Stock Forecast Before Q1 Business Update
  • GameStop store
    Consumer
    GME's Earnings Are Coming: Will It Be Mayday for Shorts or WallStreetBets?
  • CONNECT with Market Realist
  • Link to Facebook
  • Link to Twitter
  • Link to Instagram
  • Link to Email Subscribe
Market Realist Logo
Do Not Sell My Personal Information

© Copyright 2021 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.