General Mills to expand free-from range as cereal sales return to growth

The company said its improved cereals performance had been driven by renovation activity including the introduction of five gluten-free Cheerios varieties last year and removal of artificial flavors and colors from artificial sources from seven of its cereals. Reporting its full-year financial results (ending May 29, 2016), General Mills said retail sales of its US cereals had grown 3% year on year in the fourth quarter [Nielsen]. They had declined 3% in the first half of the fiscal year and had been down 1% in the third quarter. In its financial summary, the business reported a 1% year on year decline in full-year sales from its US cereals division, to $2.3bn. The Nielsen data cited by General Mills showed overall category sales for US cereal were up – by just 0.1% year on year – in the fourth quarter following decline in the rest of 2016. Full-year data for 2015 had shown a 3.2% drop compared with the previous year. General Mills reported that sales of the gluten-free Cheerios – which account for about 90% of the Cheerios brand - had risen 5% year on year in the second half of fiscal 2016, versus an 8% decline in 2015. And sales of the seven cereals no longer containing artificial flavors or colors were up 8% in H2 2016, compared with a 6% decline in 2015. “ The US cereal category has improved considerably since last year ,” said General Mills chairman and chief executive officer Ken Powell. “ This is being driven by stronger innovation and renovation aligned with current consumer interests . “ General Mills has been a key contributor to the turnaround ,” he added. “ Our cereal business has consistently strengthened throughout the year .” Powell announced activity planned for the cereal portfolio in the coming year, including the roll-out of the previously announced new cereal brand Tiny Toast. General Mills will: “ We have a strong media plan in place, with cereal investment up mid-single digit ,” he said. “ And we will focus on optimizing merchandising and driving positive net price realization for our cereal business .” General Mills also reported growth in its snack bars, with Nature Valley sales up 4% in the second half of fiscal 2016 versus 1% growth in the first half. Nature Valley had benefited from activity including a new ‘easier to bite’ recipe designed to answer the number one consumer complaint about the brand, said the company. General Mills has also promoted the brand’s use of no artificial flavors, colors or sweeteners. Activity planned for Nature Valley in the coming year will include: General Mills will also focus on growing its natural and organic business, boosted this year by the acquisition of meat snacks brand Epic Provisions. This will include a “ full slate of plans for Annie’s ” said Powell, including new yogurt and soups in addition to the cereals NPD. General Mills secured double-digit distribution growth for Annie’s in 2016 and is aiming to repeat this in 2017.

General Mills to expand free-from range as cereal sales return to growth

General Mills has unveiled NPD plans including new gluten-free Cheerios and natural products as it looks to maintain growth in its cereals business.

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