Scant volume growth attributed to changing demographics and consumer preferences was cited as a continuing challenge for the industry together with the disruptive effects of the changing retail landscape. While a few grain-based foods companies have “buy” recommendations from analysts, these generally were based on expectations of a successful turnaround following a period of difficulties rather than emanating from a track record of and outlook for sustained success.
Against this somewhat dispiriting back-drop, recent successes in the ready-to-eat cereal sector at General Mills, Inc. offer more than a glimmer of hope. Driven by innovation and marketing efforts, the company’s U.S. cereal sales rose 7% in the most recent quarter and promises more impactful innovation in the period ahead. General Mills is squarely in the mix of large packaged foods companies that have not generated growth in recent years in line with historical performance. Indeed, the company’s adjusted earnings were flat in the most recent quarter. Still, the concerted effort to boost its business through innovation represents truly the only bright path forward for the company and all of grain-based foods.