General Mills, Inc.
October 1, 2012
Executives at Minneapolis-based General Mills, Inc. hope that a restructuring program put in place in May will help the company rebound from a difficult fiscal 2012 in which higher input cost inflation contributed to a 13% decline in full-year earnings.
Kendall Powell, chairman and chief executive officer, in late June said the restructuring program “will better align and focus resources against our best opportunities for growth, accelerate our innovation efforts and make General Mills a more efficient organization. It will generate savings we will invest back in our businesses and enable us to deliver a balanced plan for growth across our global platforms.”
The restructuring effort, which included the elimination of 850 jobs globally, also features several changes to General Mills reporting segments. The U.S. Retail segment now consists of three divisions: meals, frozen foods and baking products.
The new meals division is focused on key center store meal items such as Progresso soup, Helper dinner mixes, Old El Paso Mexican foods and Betty Crocker side dishes, while the frozen foods division combines frozen entrees, Totino’s pizza, Totino’s hot snacks, Pillsbury breakfast pastries and Green Giant items. General Mills also has combined its baking expertise across Pillsbury refrigerated cookie dough and Betty Crocker dessert mixes to create a new baking products division.
Mr. Powell said the company’s Big G cereals and snacks, Yoplait and Small Planet Foods divisions already have “good category focus” and will remain unchanged.
Product innovation is expected to be a major focus for General Mills in the first half of fiscal 2013, with a number of entirely new and different products. The company will launch 35 new items in its U.S. yogurt business in the first half of fiscal 2013, including Yoplait Greek 100. Other new products on tap include: Progresso Recipe Starters, a line of cooking sauces that may be used to create home-cooked meals; Apple Cinnamon Chex; Fiber One Chewy Bars; Gardetto’s Sandwich Crackers; Green Giant Seasoned Steamers; Shake-n-Pour Desserts, Yoplait Simplait; Yoplait Fruplait and Liberte Greek yogurt.
On the health and wellness front, General Mills said it has improved the health profile of 68% of its U.S. Retail sales volume since 2005. In fiscal 2012 alone, the company said it improved nearly 16% of its U.S. Retail sales volume, with improvements ranging from adding more whole grains, fiber and calcium, to reducing calories, sugar, sodium and trans fat. General Mills first began tracking and quantifying health improvements in 2005.
Increasing whole grains content was a major reformulation milestone for General Mills during fiscal 2012 as the company now lists whole grain as the first ingredient on the Nutrition Facts Panel of every box of Big G cereal. Every Big G cereal now contains at least 9 grams of whole grain per serving, and more than 20 General Mills cereals deliver at least 16 grams.
The company also accomplished multiple sodium reductions across its portfolio of products in fiscal 2012, including cutting sodium by at least 10% in several Chex Mix varieties, several Big G cereals and a number of Hamburger Helper dinners.
For the year ended May 27, the company had earnings of $1,567.3 million, equal to $2.42 per share on the common stock, compared with $1,798.3 million, or $2.80 per share, during fiscal 2011. Sales for the year were $16,657.9 million, up 12% from $14,880.2 million during fiscal 2011.