General Mills c.e.o. on restoring industry growth

by Monica Watrous
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General Mills recently reformulated its Cinnamon Toast Crunch cereal to include "more cinnamon taste."

MINNEAPOLIS — General Mills’ solution to restoring industry growth may be as simple as adding more cinnamon. At least that was the fix in a recent restage of the company’s Cinnamon Toast Crunch brand, which grew 7% in the latest quarter.

During a Sept. 17 earnings call, Ken Powell, chief executive officer, offered his take on how to break a pattern of aggressive promotional activity that has plagued packaged foods companies lately.

“…On what’s it going to take industrywide, I think all the roads lead to higher levels of innovation, continuing to focus on brand renovation, making sure that we have the right level of messaging behind our core brands and new products,” Mr. Powell said during a Sept. 17 earnings call. “I think ultimately innovation and capitalizing on consumer trends is what gets us to higher levels of growth. And the reason we’re so certain of that is because we see that when we get that formula right, we get a very marked response from consumers.”

An example of recent product reformulation at General Mills is the removal of aspartame from Yoplait Light yogurts. To alert consumers of the switch, General Mills has changed the color of the lids and added labeling on the front of the cups. On the Yoplait web site, the company said it experimented with various sweetener options and swapped to sucralose after receiving tweets, comments and calls from consumers to eliminate the controversial ingredient.

Yoplait Light now contains sucralose instead of aspartame after consumers complained about the controversial sweetener.

General Mills also has tinkered with the recipes for its Yoplait Greek and Yoplait Original lines. Last year, the company reformulated and restaged its Greek yogurt business, supported by a taste-off campaign and a pop-up store in New York where consumers sampled the products. During the company’s first quarter, Yoplait gained share in the Greek yogurt segment.

“We’ve changed the formulation and the positioning of our core Yoplait Original, and that brand was up double digits this quarter,” Mr. Powell added.

In addition to growth in Cinnamon Toast Crunch, which was reformulated to include “more cinnamon taste,” General Mills said it is encouraged by initial results from the new Cheerios Protein line, developed in response to higher demand for protein options at breakfast.

“This new line reached a nearly 1% market share in August,” Mr. Powell said.

But not all actions in response to consumer trends have proven successful for the company. The company revealed earlier this year that its launch of Cheerios made without bioengineered ingredients failed to lift the brand’s sales meaningfully.

Looking ahead, General Mills has several new products and plans in the pipeline.

“We have plenty of activity coming in the second quarter,” Mr. Powell said. “Soup season is fast approaching, and our distribution is up thanks to new items like cream-based light soups and great-tasting traditional soups. We’re increasing our media support this quarter, leveraging Weight Watchers digital media and a taste-focused national TV campaign.

“We have great plans for the baking season, too. We’re launching 11 seasonal items, such as candy corn and gingerbread cookies. We’re increasing TV support for Betty Crocker, and we’ll continue to engage consumers through our digital media efforts.”
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