General Mills puts protein in play

by Eric Schroeder
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MINNEAPOLIS — Although U.S. ready-to-eat cereal sales remain soft, General Mills, Inc. has gained market share through the first half of fiscal 2014 and expects to continue that growth in the back half of the year through product news and innovation, said Ian Friendly, executive vice-president and chief operating officer for U.S. Retail at General Mills.

Specifically, General Mills is looking to bring the “fullness benefit, or protein benefit, to consumers,” Mr. Friendly said during a Dec. 18 conference call with analysts to discuss second-quarter results. He said the company kick-started the movement this past June with the launch of Nature Valley Protein Granola, which has 10 grams of protein per serving.

“That is more than twice the cereal category average,” he said, adding that performance of the brand has exceeded expectations. General Mills will add a cranberry almond flavor next month, and in total, the Nature Valley Protein Granola line is expected to generate more than $30 million in year one sales, Mr. Friendly said.

Other innovation coming in the new year includes two varieties of Fiber One Protein cereal: maple brown sugar and cranberry almond.

“They provide the unique combination of 10 grams of protein and 20% of the daily value of fiber per serving, and they taste great,” Mr. Friendly said.

Aside from protein-packed cereal, General Mills plans to extend its Cinnamon Toast Crunch and Cheerios lineups with new varieties. Chocolate Toast Crunch and a dark chocolate version of Multigrain Cheerios with 14 grams of whole grain per serving will hit store shelves in the coming months. General Mills also will add to its Cascadian Farms organic cereal line with Graham Crunch.

“We expect our cereal business to show continued sales growth in the second half of this year,” Mr. Friendly said. “We are supporting our cereals with strong levels of consumer-directed marketing and advertising, including traditional TV, digital media and Hispanic-focused advertising. For the first time in 18 years, General Mills will be on the air during the Super Bowl with a spot for Cheerios.”

The grain snacks category also is showing promise, Mr. Friendly said.

“In snacks, we continue to lead growth in the $3 billion grain snacks category,” he said. “Over the past five years, we have added almost 10 points of market share, and we are up nearly 4 more share points through the first half of this fiscal year with retail sales up 11%. The driver of this strong performance is terrific product innovation with items like Fiber One lemon bars, Nature Valley soft baked oatmeal squares and Greek yogurt protein bars — all launched in the first half of the year. We plan to keep this momentum going with more innovation in the second half.”

Through the first half of fiscal 2014, Fiber One grain snacks are growing at a 14% pace, Mr. Friendly said, and next month General Mills plans to introduce Fiber One meal bars. The bars contain 10 grams of protein and 9 grams of fiber. The bars will be available in three varieties: strawberry Greek yogurt, dark chocolate almond and chocolate peanut butter.

“We think they will appeal to weight-conscious consumers looking for a quick and nutritious meal replacement,” he said.

Nature Valley grain snacks also are growing at a double-digit pace, and in January General Mills plans to add to the line with Breakfast Biscuits in two flavors: honey and blueberry.

“With at least 26 grams of whole grain per serving, they offer long-lasting energy to get through that mid-morning slump,” Mr. Friendly said.”
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