General Mills' strategy of adding value to products and cutting production costs means that the group's full year profits are likely to beat expectations, despite a climate of rising costs and economic slowdown.

General Mills revealed today (18 June) that a strong fourth quarter performance is likely to mean a 10% increase in full year sales, increasing to US$13.7bn. On the back of this, the US food group said that earnings per share were likely to rise by around 11% year-on-year.

"General Mills has got a lot of momentum behind it," Edward Jones food analyst Matt Arnold told just-food. "They have done a good job bringing new products to the market and ensuring product relevance, with a strong emphasis on health, wellness and convenience." 

This focus on NPD has allowed the group to add value to their product range, Arnold said.

At a time when many food companies have struggled to offset rising commodity, ingredients and raw materials costs, General mills has successfully raised prices.

They have also managed to cut production costs, Arnold observed.

"The other piece of the puzzle is that efficiency and productivity is really engrained into the corporate culture at General Mills," he commented.

General Mills shares rose 3.34% in morning trade, climbing to $62.76 at time of press.