MINNEAPOLIS — Leveraging stronger execution and support behind brand building and innovation has helped General Mills, Inc. improve its competitiveness in the North American retail landscape over the past three years, said Jonathon J. Nudi, group president of North America Retail.
In a Sept. 8 presentation at the Barclays Global Consumer Staples Conference, Mr. Nudi said General Mills’ top priority in recent years has been to compete effectively across its core business.
“Nowhere is that more evident than in US cereal, where General Mills has posted market share gains for 34 consecutive months in four consecutive years, strengthening our position as the No. 1 player in the category,” Mr. Nudi said. “The keys to our success at cereal have been great marketing and innovation on the best brands in the category. We're continuing that playbook in fiscal '22, including taste-focused messaging and innovative partnerships on Cinnamon Toast Crunch; new product news on our Cheerios and Lucky Charms franchises; and fun seasonal initiatives like our new Monster Mash cereal, launching in time for Halloween.”
Mr. Nudi said General Mills also has been able to drive excellent results in its Pillsbury refrigerated dough line, including nearly five full points of market share gains in the past three years.
“Consumers are consistently finding that Pillsbury delivers what they need for meal solutions, something comforting, delicious, convenient and affordable,” he said, adding that Pillsbury's household penetration is up almost four points since fiscal '19. “We're working hard to ensure that we hold on to these new consumers by investing in data-led digital advertising to target repeat purchases, increasing advertising and in-store messaging focusing on everyday dinner ideas and boosting spending behind expanded consumer messaging.”
He said the brand also is benefiting from innovation, including edible cookie dough snacks and new pull-apart kits, both of which recently launched and are off to a promising early start.
A similar story is playing out for Old El Paso, Mr. Nudi said. The brand has turned in strong market share gains over the past three years that continued to materialize in the first quarter of fiscal 2022.
“Our latest creative campaign highlights our most differentiated and unique platforms, reminding consumers how Old El Paso can conveniently bring the family together for dinner,” he said. “And our burrito bowls and street taco kit innovations aim to make restaurant-quality food more accessible and affordable.”
In addition to the North America Retail business update, General Mills updated its full-year fiscal 2022 targets, taking into consideration the evolving operating environment as well as the recent completion of its pet treats acquisition.
The company said organic net sales are now expected to be toward the higher end of the prior range of down 1% to 3%, primarily reflecting stronger-than-expected sales performance in the first quarter.
Meanwhile, constant-currency adjusted operating profit and constant-currency adjusted diluted earnings per share are each now expected to be toward the higher end of the prior ranges of down 2% to 4% and flat to down 2%, respectively, largely due to the impact of the recent pet treats acquisition, which is estimated to add approximately 2¢ to fiscal 2022 adjusted diluted EPS. General Mills said it is addressing the increasing cost environment with incremental SRM and cost efficiency actions.
Free cash flow conversion is still expected to be approximately 95% of adjusted after-tax earnings, General Mills said.