General Mills plans hundreds of 2014 product launches

NEW YORK--General Mills Inc. (GIS) expects food retail prices to be mostly stable over the next year, and will rely on higher sales volume for the bulk of its sales growth over the next year.

"The cost environment is that we're seeing general price stability across all of our categories," General Mills Chairman and Chief Executive Ken Powell said Tuesday in an interview at the New York Stock Exchange.

Mr. Powell spoke ahead of an annual meeting with shareholders and investors, where the company was highlighting some of the more than 200 new products its plans to launch in the first half of fiscal 2014, ranging from a new version of its Yoplait Greek yogurt to protein-rich varieties of Nature Valley cereal.

The onslaught of new products is more than they launched last year, when products like Fiber One protein bars and a 100-calorie version of Greek Yogurt helped make General Mills's sales in its U.S. retail division, by far its largest division with more than $10 billion in annual sales, grow last year. In that same time frame, new products contributed 5 percentage points to the unit's growth, which was up just 1% overall.

The performance of new products will be key to increasing sales volume, something investors still crave out of food makers who have thus far only shown a slow recovery. General Mills in recent quarters has begun to finally show sales volumes increasing, including a 2% rise in the U.S. retail segment in its fiscal fourth quarter.

General Mills sees low-single digit sales growth for its recently begun fiscal year, and most of that increase will come from selling more product. Costs are expected to rise 3%, a level General Mills executives say is manageable.

New products are also being counted on to help revive two of the company's lagging businesses: cereal and yogurt.

The maker of Cheerios cereal lost some market share over the past year, after what it says was lackluster number of new products and less advertising by all the players in the category. In addition to new products, General Mills is also stepping up advertising behind older brands like Lucky Charms and Cheerios.

Yoplait yogurt, which over the past year lost its leading market-share position to Danone SA's (BN.FR) Dannon brand, meanwhile has revamped its Greek-yogurt product to better compete in the fast-growing segment.

Mr. Powell also said the company doesn't see the need to cut prices of any of its products further this year. Last year, General Mills used "selective" price cuts, lowering prices on items like Yoplait's core yogurt cups.

"Our pricing for all of our core and major brands is in the zone that we want it to be," he said.

General Mills shares were recently up 0.5% at $49.52, and have rallied 22.5% year-to-date. Shares have been boosted by investors looking for stable, dividend-paying stocks, and as valuations for food-makers rose in the wake of H.J. Heinz's $23 billion buyout by Berkshire Hathaway Inc. (BRKA, BRKB) and Brazilian private-equity firm 3G Capital.

Article written by Paul Ziobro for the Wall Street Journial. Original article can be found here. Write to Paul Ziobro at paul.ziobro@dowjones.com

General Mills announces new products for 2014

Single-themed foods? That's so last year. What's coming soon to the supermarket are foods within foods.


When General Mills unveiled its new product offerings Wednesday, the big trend seemed to be consumer food items that have other foods tucked inside.

Like Betty Crocker's Fun da-middles, a baking mix with white frosting that can be baked inside a chocolate cupcake.

Or Totino's Pizza Stuffers, with the crust on the outside and gooey pizza on the inside.

Or Pillsbury Grands' frozen Biscuit Sandwiches, with eggs and sausage tucked inside a biscuit.

University of Minnesota food science and engineering professor Ted Labuza calls these "dual-texture foods," and he said they can be tricky to manufacture and preserve. But he knows the public seems to enjoy them, so they're appealing to food makers, too.

"For some reason, people like that kind of stuff - things that are soft with a filling, or crispy with a filling," Labuza said. "It's quite a trend among all companies. Even with pet food."
Golden Valley-based General Mills makes consumer foods in dozens of categories, such as yogurt, cereal, vegetables and snack bars (no pet food, though). In the coming year, General Mills plans to offer new food-inside-food offerings across many of those categories.
"We have a very robust innovation lineup for (fiscal) 2012, by our measure, very meaningfully stronger than in 2011," General Mills CEO Ken Powell told analysts Wednesday. "We'll launch nearly 70 items in U.S. retail in just the first six months, and there are more to come later in the year."

That pipeline of new products is one of the keys to General Mills' success.

"Innovation is just a core driver of topline (growth) in our business, so have a high focus on it every year," Powell said in an interview. But this year, the company thinks it has a lot of winners, and "we happen to feel particularly good about the products we have going in."
New products may be the lifeblood for companies like General Mills, but it's a tough business. Labuza noted that the vast majority of rollouts don't succeed.
"I think after two years, it's less than 10 percent," he said. Given the low success rate, "all companies are trying to get away from putting too much work into a product then having it fail."
So it's notable that General Mills is rolling out several new "platforms," or new product lines, which is more adventurous than merely adding a new flavor of yogurt or Cheerios.
One of those new platforms is Sweet Moments, a line of refrigerated brownies with a chocolate coating outside and, say, raspberry and cheesecake inside.
Another is Old El Paso Tortilla Stuffers, a tortilla filling in a microwaveable pouch, although consumers will have to provide the tortilla exterior themselves.

General Mills is carrying the hidden-in-the-middle theme internationally, too. Its global cereal partnership is rolling out Nesquik Pillows, featuring cereal on the outside with a "creamy center" on the inside. And overseas, it's introducing Haagen-Dazs Crepes, where the ice cream is tucked inside a crepe so it can be handheld.

Labuza said he sees the appeal behind these offerings: They're convenient, easy to eat and fun.

"That's usually going to make it with a consumer," he said.



New businesses and global sales boost General Mills by 18% for 2013

MINNEAPOLIS — New businesses, including Yoki Alimentos in Brazil and Yoplait International, as well as contributions from international sales contributed to an 18% increase in income during fiscal 2013 at General Mills, Inc.


For the year ended May 26, the company had earnings of $1,855.2 million, equal to $2.86 per share on the common stock, which compared with $1,567.3 million, or $2.42 per share, during fiscal 2012. Sales for the year were $17,774.1 million, up 7% from $16,657.9 million.

“Our 2013 results reflect good growth from established product lines and important contributions from new businesses added during the year,” said Ken Powell, chairman and chief executive officer. “Each of our three operating segments posted profit growth. Our cash flow from operating activities rose 22%, and we returned nearly $1.9 billion in cash to shareholders through dividends and share repurchase activity. In addition, we exited the year with momentum that enabled us to finish 2013 a bit better than our original estimates.”

The U.S. Retail segment had an operating profit of $2,392.9 million during the year, up 4% from $2,295.3 million during fiscal 2012. Sales for the segment were $10,614.9 million, up 1% from $10,480.2 million.

General Mills said new items such as Honey Nut Cheerios Medley Crunch cereal, Yoplait Greek 100-calorie yogurt and Nature Valley Protein Bars helped key the gains in the U.S. Retail segment during fiscal 2013.

The International segment had operating profit of $490.2 million, up 14% from $429.6 million. The segment had sales of $5,200.2 million, up 24% from $4,194.3 million during the previous year. During fiscal 2013, the International segment benefitted from double-digit growth in Haagen-Dazs ice cream and Wanchai Ferry frozen dim sum in China, as well as the newly acquired Yoki and Kitano brands in Brazil.

Operating profit within the Bakeries and Foodservice segment was $314.6 million in fiscal 2013, up 10% from $286.7 million during the previous year. The segment had sales of $1,959 million, down 1% from $1,983.4 million. Chex Mix snack varieties, Pillsbury heat-and-serve breakfast items and Yoplait Parfait Pro Greek yogurt were key contributors during the year, the company said.
For the fourth quarter ended May 26, the company as a whole saw earnings rise 13% to $366.3 million, or 57c per share, which compared with $325.4 million, or 50c per share, during the same quarter of the previous year. Sales for the quarter were $4,410.7 million, up 9% from $4,066.4 million.
The company said it expects fiscal 2014 adjusted diluted earnings per share to be in the range of $2.87 to $2.90 per share.

(Original article written by the staff for FoodBusinessNews.com and can be found here)

$4.2B gluten-free food market only expected to keep growing

$4.2B gluten-free

food market only expected to keep growing

(Article written by Roger Riddell for Fooddive.com, original article can be found here)

Dive Summary:

• Packaged Facts reports that gluten-free food sales reached $4.2 billion last year, with the market forecast to top $6.6 billion in 2017.
• Gluten-free foods have become popular due to some consumers' belief that they can't tolerate the protein, which is found in foods processed with grains, and parents who say gluten is harmful to children with autism, though NPD Group senior analyst Harry Balzer expects interest in the category to fade eventually.
• Food giants like Mondelez International, General Mills and Kellogg's all offer gluten-free foods, and restaurants like Domino's Pizza are also beginning to cash in on the latest health interest.

From the article:
... A recent survey released by NPD Group found that 29% of U.S. adults say they want to either cut back or eliminate gluten from their diets, an increase from 24% in 2009. However, NPD senior analyst Harry Balzer tells MSN Money he expects interest in the category to fade, though he isn't sure when.
"This is the health issue of the day," he said, adding that his research doesn't delve into why people want to buy gluten-free goods. ...

READ THE FULL ARTICLE FROM MSN.COM HERE