Milling & Baking News - July 16, 2019 - 14

Business

Breakfast cereals, snack bars on
different paths at General Mills
NEW YORK - While fiscal 2019 was
a successful year for General Mills,
Inc.'s U.S. cereals business, it was a
challenging year for U.S. snacks, Jonathon J. Nudi, group president of North
America Retail, told participants during a July 9 Investor Day conference.
Both businesses have room for improvement, he said.
In the case of cereal, Mr. Nudi said
General Mills expanded its share leadership position and saw the category
improve throughout the fiscal year.
General Mills grew its retail cereal sales
for the second year in a row, he added.
"We led the category in innovation, brought strong consumer news
and marketing to our brands and improved our in-store execution over the
course of the year," Mr. Nudi said. "We
believe there is room for more growth
in the category driven not only by our
efforts but also by changing consumer
demographics. After several years of
declines, the population of children
in the U.S. is expected to increase over
the next few years according to U.S.
Census projections. And the number
of adults aged 55 and over continues
to grow rapidly. These two age groups
also happen to be the ones with some
of the highest levels of per capita cereal consumption. Our opportuny is to
drive further category improvement
by engaging with these consumers
and providing them the great-tasting,
convenient, nutritious cereal brands
that they love."
Mr. Nudi said General Mills has
tailored its brand-building efforts to
reach the changing demographics.
"We're introducing refreshed hearthealthy messaging on Honey Nut
Cheerios this year to clearly communicate the health benefits of this product
to boomers, who we know are increasingly seeking brands that they know
and love that also meet a certain health
profile," he explained. "And we're continuing our terrific partnership with Ellen DeGeneres to drive another 1 million 'acts of good' across the country,
reaching 5 million acts of good to date.
On Cinnamon Toast Crunch, our plans
will focus on (extraordinary) taste by
delivering permissible fun across our
full product line, including last year's
successful Cinnamon Toast Crunch
Churros launch.
"On Reese's Puffs, we'll feature
our 'It's what you really want' campaign. We also recently unveiled a
14 / July 16, 2019

Milling & Baking News

one-of-a-kind influencer collaboration with musician, artist and fashion
icon, Travis Scott, who designed an
exclusive Reese's Puffs box. We sold
these limited-edition boxes online
at $50 per box, and they sold out in
30 seconds. Breaking through with
younger consumers means connecting
with them where they are, and partnerships like this can give our brands
powerful relevance."
General Mills will continue to follow through with similar events and partnerships in fiscal 2020, Mr.
Nudi said. The company is partnering with
"The Lion King" to offer on-pack promotions
and in-store displays
featuring the upcoming
movie on brands such
as Cheerios, Reese's
Puffs and Cinnamon
Toast Crunch.
In addition to events,
General Mills also has a
slate of new innovation
planned for its cereals GENERAL MILLS
lineup, including Blueberry
Cheerios and Peanut Butter Chex. The
company also will roll out Morning
Summit, which Mr. Nudi described as
"a new premium, hearty cereal with
flakes, fruits and nuts, including almonds as the first ingredient." He said
the cereal will retail for approximately
$13 per 38-oz box.
"With cereal plans built out on these
big growth ideas and strong fundamentals, I'm optimistic about our outlook for the year ahead," he said.
Turning to U.S. snacks, Mr. Nudi
said General Mills' long track record of
growth in the business came to a halt
in fiscal 2019 as the company faced
challenges, especially in its snack bars
business, which accounts for about
60% of the unit's retail sales.
Nature Valley's performance in fiscal 2019 fell short of expectations, he
said, primarily due to less impactful
innovation and lower levels of merchandising. Mr. Nudi said General
Mills plans to address both areas of
the brand's shortfalls in fiscal 2020.
"While Nature Valley has a long
history of successful innovation, performance in our more recent launches
has been mixed," he said. "We're getting back to innovation on the core bar
in fiscal '20 with a new line of crispy

creamy wafer bars. These new bars
are made with light and crispy whole
grain wafers, layers of peanut butter
and crunchy granola topping, providing a differentiated texture experience
for consumers. It's still early, but wafer
bars are off to a good start with strong
display in consumer support plans on
tap for the summer and fall."
On the merchandising front, General Mills plans to focus on securing key
merchandising windows and improving in-store displays for Nature Valley,
Mr. Nudi said.
"One way we'll do that is by leveraging our scale and partnering with
Big G cereals to offer
high-value Box Tops
promotions during the
back-to-school season,"
he said. "In addition
to improving our innovation and in-store execution, we'll increase
brand-building
support of Nature Valley
in fiscal '20 behind the
crunchy and sweet and
salty product lines. We'll
invest in our 'We are better outside' campaign,
focused on helping Nature Valley consumers
get outside more often to
receive the health benefits of nature."
Mr. Nudi said General Mills also has
established a focused improvement
plan for its One franchise. After several years in which Fiber One "fell out of
step" with many weight management
programs, Mr. Nudi said General Mills
is taking the brand back to its roots.
He said the brand's weight management credentials have been improved
thanks to an initiative to renovate 75%
of the line to reduce the calorie count,
sugar and net carbohydrates.
"We think this change coupled with
the right-sized distribution on shelf
will help stabilize the brand," he said.
Elsewhere in the One franchise, Mr.
Nudi said General Mills has seen early
success from Protein One, a line of bars
featuring high protein and low sugar
with 90 calories. He said the company
is supporting the brand through a
partnership with "The Bachelorette"
to build trial and awareness.
Beyond its Nature Valley and One
brands, General Mills has plans to
continue its growth trends in other
parts of its snack bar portfolio.
"On Epic, we'll continue to broaden
availability for Epic Performance Bars,
a high-protein offering made from
cage-free egg whites and just five to
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Milling & Baking News - July 16, 2019

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