Restoring the Helper core at General Mills

by Josh Sosland
Share This:
Search for similar articles by keyword: [General Mills]

Acknowledging that dry dinners have been a weak link in the General Mills Inc. Meal Division, Julianna L. Chugg, senior vice-president of the division, said the category was poised for renewed growth at the company. A greater focus on its traditional Helper line of dry dinners will be pivotal in the improvement, she said.

Ms. Chugg spoke July 9 at the Fiscal 2014 General Mills Investor Day at the New York Stock Exchange.

Offering an overview of the Meals division, which covers center store meal items, including Progresso soup, Old El Paso Mexican foods and dry dinners, Ms. Chugg said the segment’s “performance has admittedly been a bit mixed.”

“We have delivered strong net sales and share growth in soups, maintained share in Mexican foods and have lost share in dry dinners,” she said.

While dry meals have lost market share, it hardly has been a major area of weakness. In four of the last five 10-K annual reports filed by the company with the Securities and Exchange Commission, General Mills has identified its Helper business either as flat or growing in sales. Only in fiscal 2011 was the business singled out as weak.

Still, Ms. Chugg suggested the line is underperforming and has, with its other Meals lines, the potential to do far better.

“We are confident we can generate growth across our meals portfolio in 2014,” she said. “In part that is because demand for convenient meal offerings is growing. Today consumers devote less than 30 minutes to prepare and cook the evening meal so convenience is very important, right after taste, in deciding what to make for dinner.”

After briefly reviewing plans for the General Mills’ Progresso and Old El Paso brands, Ms. Chugg offered a lengthier discussion of the dry dinner business at the company. She began with a look at where the company has fallen short.

“In recent years we’ve shifted our focus away from our core hamburger, chicken and tuna Helper varieties into more value-added product offerings like restaurant favorites,” Ms. Chugg said. “These new offerings were unsuccessful and drove the vast majority of our dry dinners sales decline over the last three years.”

New product introductions by General Mills in recent years have centered on products without the words “Helper” in the brand, including Romano’s Macaroni Grill and Good Earth. In both instances, the brands were tied to restaurant chains.

Nielsen data cited by Ms. Chugg showed a $59 million decline in retail sales of General Mills dry dinners with these “non-Helper” brands between fiscal years 2011 and 2013.

Ms. Chugg expanded on a General Mills announcement in April of plans to redesign and reformulate its Helper line. At the time, the company said the reformulated products would have at least a 20% reduction in sodium from 2008 levels.

“We intend to renew momentum on our dry dinners business in 2014 by focusing on our core Helper product offering with a comprehensive marketing plan featuring sampling, new products, new packaging and new advertising,” she said.

In turning back to its Helper heritage, General Mills will build on a strong customer base, Ms. Chugg said.

“Today over one million U.S. households eat our core Helper product line each weeknight for dinner, and we are on a mission to help the next one million households discover Helper,” she said. “In fact, we are traveling across the country in a Helper’s branded food truck giving away over 400,000 samples of our great tasting products.”

Other steps General Mills plans to boost the business were delineated by Ms. Chugg. In a twist from the company’s attempt to gussy up the Helper line with the restaurant tie-ins, she said the company is entering the premium skillet segment with the launch of Ultimate Helper in chicken and hamburger varieties.

“These products add a rich creamy sauce to the Helper taste experience, and we are bringing variety to the premium skillet category with a broad lineup of sauces, including cheese, marinara, Alfredo and stroganoff varieties,” she said. “Chicken is the top-selling U.S. protein, and since January we have added six chicken s.k.u.s (stock-keeping units) to our Helper line-up. Our latest Chicken Helper varieties are crispy cheddar bacon with pasta and crispy ranch with mashed potatoes. We are launching a five s.k.u. line of Betty Crocker mac and cheese later this summer.”

Ms. Chugg said the dry dinner business will be supported with stepped up advertising, leveraging “both TV and digital to show consumers how Helper helps solve the daily problem of what is for dinner.”

General Mills seen better positioned at U.S. Retail

NEW YORK — While holding to a “neutral” view of General Mills, Inc. as an investment, Robert Moskow of Credit Suisse said prospects for General Mills, Inc. are beginning to improve following a couple of years in which the company “struggled through a multitude of challenges.”

Mr. Moskow reached that conclusion following a series of analyst day presentations that led him to conclude management’s guidance of 7% to 8% earnings growth is ripe for upward revisions. The analyst day was held July 9 at the New York Stock Exchange.

A presentation by Ian R. Friendly, executive vice-president, chief operating officer, U.S. Retail, was “noticeably more upbeat than last year,” Mr. Moskow said.

“Promotional price points have been adjusted down, cereal merchandising support has returned to normal, Yoplait sales have returned to positive territory after two years of declines, and the re-launch of the ‘Helper’ brand looked (and tasted) compelling enough to regain some of the share it lost to Kraft,” he said. “Friendly said that sales growth accelerated in 8 of its top 10 categories in the fourth quarter and that the cereal business entered the first quarter with positive momentum.”

Highlighting a presentation by Christopher D. O’Leary, executive vice-president, chief operating officer, International, were forecasts of strong growth and margin expansion, Mr. Moskow said. The recently acquired Yoki food and beverage business in Brazil is growing at a double-digit pace, and Häagen-Dazs is expanding further in China and launching a global advertising campaign.

“International is expected to increase its productivity savings at a double-digit pace this year having consolidated the procurement of key commodities like cocoa and bundled its media spending,” Mr. O’Leary said. “Launching Yoplait in China is no longer a question of ‘should we,’ it is only a question of ‘how.’ Accessing a reliable and high quality dairy supply remains a challenge.”

Another positive cited by Mr. O’Leary is prospects for General Mills’ convenience store and food service business. While sales are expected to decline, profits are expected to grow through the exit of low-margin business.

“The shift to a company-owned sales force in the convenience channel has accelerated sales growth and resulted in a 67% increase in ‘advisorships’ for category merchandising with convenience-store operators,” he said.

Holding Mr. Moskow back from a more positive view still of General Mills is a lack of sustained strong scanner data at the U.S. retail level, particularly for yogurt and cereal, he said.

Add a Comment
We welcome your thoughtful comments. Please comply with our Community rules.








The views expressed in the comments section of Baking Business News do not reflect those of Baking Business News or its parent company, Sosland Publishing Co., Kansas City, Mo. Concern regarding a specific comment may be registered with the Editor by clicking the Report Abuse link.