General Mills is cashing in on key food consumption trends in order to drive growth, management told investors in Paris this afternoon (9 June).
“We’re living in a time of great economic uncertainty around the world; and despite this General Mills is doing well. Our performance through the first nine months shows that our business is generating good growth,” General Mills president and CEO Ken Powell told the Deutsche Bank Securities Global Consumer & Food Retail Conference.
Through the first nine months of the company’s fiscal year, General Mills’s US retail business saw net sales growth of 10%. Internationally the company reported a 10% sales lift on a constant-currency basis, which was dragged down to 4% after currency exchange.
Yesterday, General Mills upped its 2009 full-year EPS guidance on the back of a good operating performance and lower fourth-quarter tax rates.
Powell revealed that General Mills has focused its business on five “key drivers” for growth: product innovation, productivity innovation, brand building and advertising, effective partnerships with retailers and international expansion.
The group has also been able to successfully ride significant consumption trends, such as the increasing tendency for consumers to eat at home.
Consumers “trading down” to eat at home “still want a restaurant experience”, Powell suggested. This trend has benefitted General Mills’s diner mix and home baking brands, such as Pillsbury and Hamburger Helper.
Product innovation, such as the line extension of Fibre One cereal into bars, has allowed General Mills to benefit from the increasing demand for food products that have health benefits, Powell continued.
Meanwhile, General Mills has extended its marketing message to “reach out” to “multicultural consumers”, particularly “Latin American and African American moms”. As a consequence, Powell said that this group is now General Mills’s fastest-growing consumer group in the US.