General Mills’ profits climbed to US$367m during its second quarter.

US food manufacturer General Mills [GIS] has announced a 19% increase in profits for its second fiscal quarter. Despite rising commodities costs and slowing cereal sales, General Mills has generated a strong bottom line by responding to consumers’ needs and continuing to focus on the growing health trend.

General Mills has announced positive results for the second quarter of its fiscal year, with profits of US$367m – a 19% increase over the same quarter in the previous year. The company also saw sales in the US grow 3% during the quarter, to $2.3 billion.

Skyrocketing commodities and energy costs forced General Mills to raise wholesale prices by 9% on Progresso soups, Yoplait yoghurts and snack products; and by 4% on its cereals. The company, meanwhile, lowered its general and administrative costs by 6% during its second quarter and in addition, sold its share of Snack Ventures Europe to its partner PepsiCo for $750m.

The company is leveraging its product line to improve its financial health in the long term. In response to the growing consumer trend toward overall health and wellness, General Mills is expanding its healthier brands, such as Yoplait, and has introduced more than 90 new products since June, with a further 30 product launches planned for the next two quarters. It has also recently launched a weight loss website aimed at consumers looking to improve their health.

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Rather than focusing on recent dieting trends, General Mills is ensuring its long-term financial well-being by widening its focus and shifting towards a healthier general product line. The company is altering its most popular and most profitable offerings to cater for the health-conscious consumer, having recently announced plans to switch all of its cereals to whole grain ingredients. It has also introduced a line of reduced-sugar cereals. Cereal shipments have flattened in recent years, with breakfast bars and convenience products having grown in popularity, but still comprise 20% of General Mill’s sales.

The company has been slower than its rivals to capitalise on the low-carb trends, but has maintained a healthy bottom line and in leveraging its strongest products to focus on consumer health, should continue to do so.

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