General Mills (GIS)

As consumers remain under pressure more families are opting to prepare food at home opposed to going out to restaurants. As one of the largest providers of food for the home General Mills stands to benefit from continued pressure on the consumer.

General Mills' small but rapidly growing international segment stands to benefit from a weakening dollar. As foreign currencies strengthen relative to the dollar, goods sold in foreign markets are suddenly worth more dollars back in the US, boosting earnings. In the latest quarter international sales rose 21%, with nearly half the gain due to the weaker dollar; profits climbed 10%^[1].

More and more families are looking for low cost alternatives to living normal daily lives. Cereral and yogurt allow low cost eating and nutrition. People have gravitated to these easy alternatives and low cost for their family survival, and nutrition.

General Mills has maintained its profit forecasts despite rising input costs. General Mills has offset these costs by increasing prices while raising ad spending to maintain sales volume. The company has also benefited from extensive hedging in the latest quarter General Mills had hedged 60% of its $500M in expected commodity and energy costs^[1].

The company is well-positioned to take advantage of consumers' increasing interest in health and wellness since General Mills has leading positions in the cereal and yogurt markets, which are both considered to be "healthier."