MINNEAPOLIS – Executives of General Mills, Inc. could boast about the performance of several cereal products in the third quarter ended Feb. 22, even though overall cereal unit sales in the company’s U.S. Retail segment essentially were unchanged from sales in the previous year’s third quarter.
“We are investing in core brand renovation, innovation and consumer marketing to keep our cereal brands relevant with evolving consumer preferences,” said Kendall J. Powell, chairman and chief executive officer for Minneapolis-based General Mills, in a March 18 earnings call. “We continue to see strong growth for our granola cereals, which are on trend with consumer interest and less processed food.”
He said retail sales for granola cereal under the Nature Valley, Cascadian Farm and Chex brands increased by 26%. Retail sales for protein cereal varieties more than doubled, he added.
“And great taste will always be a driver of growth for cereal,” Mr. Powell said. “For example, Cinnamon Toast Crunch posted another quarter of strong growth, and we've had very positive consumer response to the re-launch of French Toast Crunch in January.”
General Mills plans to launch several gluten-free Cheerios varieties later this year, which will make 88% of the Cheerios franchise gluten-free, he said.
“With nearly 30% of U.S. consumers expressing an interest in gluten-free foods we think this change is a big deal,” Mr. Powell said. “We know some consumers have turned away from cereal to seek gluten-free options at breakfast, and we think that having the largest franchise in the category gluten-free gives them a reason to return to the category.”
Also in U.S. Retail, grain snacks posted 4% retail sales growth in the third quarter, Mr. Powell said. Two new products, Fiber One Streusel and Nature Valley Nut Crisp, led the growth.
“Continued distribution gains and investment in sampling and digital marketing for Larabar helped deliver double-digit retail sales growth for nutrition bars, and Chex Mix and Gardetto’s posted 3% retail sales growth behind large size varieties,” Mr. Powell said.
Sales also were up 4% in the quarter for the Totino’s hot snacks business.
Operating profit of the U.S. Retail segment of General Mills, Inc. was $520.8 million in third quarter, up 0.8% from $516.6 million in the previous year’s third quarter. Sales increased 1.3% to $2,651.9 million.General Mills companywide recorded net income of $343.2 million, equal to 57c per share on the common stock, in the third quarter, which was down 16% from $410.6 million, or 66c per share, in the previous year’s third quarter. Net sales were $4,350.9 million, down 0.6% from $4,337.4 million.