US food group General Mills has said it will look to the emerging markets for acquisition opportunities as the company faces a decline in domestic sales.
Speaking on the firm’s first-quarter earnings call yesterday (19 September), CFO Don Mulligan told analysts General Mills was “considered to be very active in looking” at potential merger and acquisition opportunities.
“We’ve obviously done some pretty sizeable, and even one not sizable, strategic deals, in terms of our businesses that are at YOPLAIT, [Brazilian firm] Yoki, which got us a good position in the category and in a certain critical geography. And then with Food Should Taste Good in the US, which put us in a very different position in a category and particularly around a channel and a consumer need.”
Mulligan said the acquisitions had all helped grow the business in “key platforms” and helped accelerate the business and growth. As a result, the CFO said the company would “continue to look”.
He added: “Emerging markets is a focus for us. We have a great organically growing business in China. We now have an equally sizeable business in Brazil with a similar growth profile. But there are other emerging markets where we have small footprints, India for example, that we’d look to – will be looking to increase our size.
“And then in the US and more broadly developed markets. Better-for-you snacking … [is] an area that’s of intense interest to us and is where we’ve added some businesses over the last couple of years, and we’ll continue to look in that area.”
General Mills yesterday (19 September) reported a 35% rise in net income for the first quarter to US$548.9m on the back of acquisitions and sales growth in Europe and Canada.
However, the Minneapolis-based company said US retail sales had fallen by 1% to $2.49bn, with operating profit down by 2% at $575m and retail pound volume down 2%.