MINNEAPOLIS — General Mills, Inc.’s scale and resilient supply chain gave the company a competitive advantage during the pandemic and the period of inflation that followed. But as the market has returned to normal and competitors recovered from their own supply chain disruptions, General Mills’ management has found its business was out of alignment with the marketplace.

This past March, Jeffrey Harmening, chairman and chief executive officer, discussed how that misalignment impacted the company’s third-quarter results and what management was doing to improve General Mills’ financial performance. During a June 4 presentation at the Deutsche Bank dbAccess Global Conference Harmening provided additional context and an update about how the company is trying to get back to “normal” and achieve organic growth.

“… Our value equation was out of line with what consumers’ expectations were,” Harmening said. “And I’m not sure that we did anything wrong necessarily. It's just the context changed over time. I mean for a few years, we have been battling … a global pandemic, record inflation, supply chain disruptions, and, so, most of our energy went into all of that.

“And at a time when most of our … competitors, especially private label, didn't have the shelf presence we did because our supply chain held up better, that was a great competitive advantage for us for about three or four years.”

But during the past 12 months competitors, particularly smaller brands and private label manufacturers, started taking share away from General Mills.

“When you look at the current environment, there has been a lot of small brand growth,” Harmening said. “A lot of that growth, not all of it, but a lot of that growth has been on the back of kind of getting back on the shelf because there was a period of time when, frankly, the small company supply chains and private label supply chains didn’t hold up as well as ours did.”

As a result, General Mills was able to raise prices and charge a premium for its products.

Reduced pricing and additional marketing investments have supported the recent organic growth of brands like Pillsbury at General Mills.

| Photo: ©JAMMY JEAN – STOCK.ADOBE.COM

“… What we’re doing right now, when we talk about adding value and making investments back in value, we’re really getting back to historical price differences between competition, which had gotten out of line,” Harmening said. “And, so, the context has changed, and we're changing with it.”

A goal for the fourth quarter is getting back to organic growth, because, as Harmening said, “… if you’re not doing that, then you’re just spending money…”

He added that the efforts to improve organic growth are bearing fruit as, according to Nielsen data, the company has improved pound volume in about 65% of its categories in the United States.

“Our pounds were down 3% in the first half of the year,” he said. “They’re down 2% in the third quarter, and now they were only down 1% in the fourth quarter. Dollars have lagged that. So, our dollars in our US business are down 4%, but we expected that. In fact, we modeled that.”

Propelling the improved volumes were price changes and marketing investments in the company’s Pillsbury, Progresso, Totino’s and fruit snacks businesses. General Mills’ management plans to raise its marketing spend in fiscal 2026 to support innovation and maintain its current momentum.

“… This combination of getting the value right then adding more new product innovation and renovation news in our core, along with increased marketing spend, that is a formula for getting our organic sales back to growth,” Harmening said.

He did not provide any guidance for fiscal 2026, adding that the company would discuss its guidance when it issues its fourth-quarter fiscal 2025 results on June 25.