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General Mills Details Plans for Growth

General Mills executives discussed plans to fuel growth in the U.S. and around the world in the company’s new fiscal year at a meeting with investors today at the New York Stock Exchange.

“Our goal is to deliver consistent, high-quality sales and earnings growth,” General Mills Chairman and CEO Ken Powell told investors. “Our strategies are designed to generate balanced growth across our portfolio.”

General Mills expects fiscal 2013 to be another year of good growth, said Powell, with sales and profit increases on its base business and contributions from newly acquired operations, including Yoplait International, Parampara in India, and Food Should Taste Good in the United States. The company also signed an agreement in May to acquire Yoki Alimentos in Brazil, which is expected to close in the first half of fiscal 2013.

General Mills will continue its focus on Holistic Margin Management (HMM). Over the last three years, supply chain HMM projects alone generated $1 billion of cost savings, and Powell said the company expects to generate an additional $3 billion of HMM productivity between now and the year 2020.

Growing Through Innovation on New and Established Brands in the U.S.

“Our leading brands are staples in many U.S. households, because they offer great taste, nutrition and convenience – all at good value,” said Ian Friendly, executive vice president, chief operating officer, U.S. Retail. “Today, a higher percentage of meals are made at home – or carried from home – than at any time during the last decade. So demand for packaged food products remains high.”

General Mills is responding with more than 70 new products in the first half of the year. Many of these introductions represent bigger innovation on platforms that Friendly expects to drive sales growth, including:

  • Yoplait Greek 100 ─ A 100-calorie Greek yogurt — the only Greek yogurt endorsed by Weight Watchers® with a PointsPlus® value of 2 per serving.
  • Yoplait Simplait – A yogurt crafted from six simple, all-natural ingredients.
  • Yoplait Fruplait – A blend of Yoplait Original with two times the fruit of other yogurts.
  • Liberté Méditerranée and Liberté Greek – The fastest growing yogurt business in Canada, Liberté will launch its great-tasting, premium yogurts products in the U.S. this summer.
  • Progresso Recipe Starters – A new line of versatile cooking sauces.
  • Apple Cinnamon Chex – Sprinkled with real apple and cinnamon, and gluten free.
  • Fiber One Chewy Bars – With kid-friendly Chocolate and Strawberry PB&J flavors, and 20 percent of the Daily Value of fiber.
  • Cascadian Farm Ancient Grains Granola – This new organic cereal combines quinoa, spelt, Kamut® khorasan wheat with Cascadian Farm granola.
  • Green Giant Seasoned Steamers – A new sauce-free seasoned frozen vegetable line made with chef-inspired seasoning blends.
  • Betty Crocker Shake-n-Pour Desserts – in Chocolate Brownie, Confetti Cupcake and Chocolate Cupcake flavors.
  • And Convenient Meal Options like Pillsbury Whole Grain Artisan Pizza Crust, Wanchai Ferry Chicken Fried Rice, Betty Crocker Macaroni & Cheese, and Yoplait frozen Greek Smoothies.

Targeting Global Growth in Developed and Emerging Markets

Chris O’Leary, executive vice president, chief operating officer, International, discussed General Mills’ continuing evolution into a truly global food company. Ten years ago, just 10 percent of General Mills’ sales were generated outside of the U.S. Today, international sales, including our proportionate share of joint venture sales, represent 30 percent of General Mills’ total worldwide sales.

“Our future growth plans remain focused on five global categories – ready-to-eat cereal, super-premium ice cream, convenient meals, wholesome snack bars, and yogurt,” said O’Leary. “In fiscal 2013, we want to generate growth in our core, developed markets, while expanding our presence in emerging markets worldwide.”

Across Europe, for example, the company plans to drive its Häagen-Dazs business through expansion of Secret Sensations ice cream mini-cups, both expanding to new markets and by introducing a new flavor and package size. General Mills is also integrating its Häagen-Dazs advertising efforts across shops and retail locations with its “Anticipated Like No Other” global advertising campaign.

Yogurt is now General Mills’ biggest category in Europe, and O’Leary said he sees good opportunities for continued growth across the Yoplait brand portfolio. In France, General Mills is launching new varieties of Calin, a functional yogurt high in calcium, and is expanding Calin to the UK market this summer. General Mills also recently expanded its European yogurt business by reacquiring the Ireland Yoplait license.

Over the current decade, emerging markets are projected to account for 95 percent of the world’s population growth and more than 60 percent of the growth in global GDP, O’Leary said.

In Brazil, General Mills has a modest but growing business, focused largely on Häagen-Dazs and Nature Valley. The just announced acquisition of Yoki Alimentos, a leading branded food company, will significantly increase General Mills’ presence in Brazil. In fact, Yoki will double General Mills’ sales in Latin America.

Strong Growth in China

Within its international business, China is leading General Mills’ international growth, driven by its four key brands there: Häagen-Dazs super-premium ice cream, Wanchai Ferry frozen convenience meals, and Bugles and Trix wholesome snack products.

“By 2020, the number of middle-class and affluent families across China is expected to double – to 200 million households – creating a growing market of potential General Mills consumers,” said Gary Chu, president of General Mills Greater China.

In fiscal 2013, General Mills plans to open 50 additional Häagen-Dazs shops in China. By the end of 2013, General Mills will operate more than 250 shops there.

In a country where dumplings are an everyday food, Wanchai Ferry dumplings are the category leader in every city with market share data available. Today, Wanchai Ferry frozen dumplings, dim sum and noodles are sold in more than 130 cities across Greater China – with plans to enter new cities moving forward. Wanchai Ferry is also entering new markets, including Thailand this fiscal year.

The company said it plans to reach $900 million in sales for its wholly owned businesses in China by 2015.

To access a webcast of today’s meeting, visit GeneralMills.com.

About General Mills

General Mills is one of the world’s leading food companies, operating in more than 100 countries. Its consumer brands include Cheerios, Häagen-Dazs, Nature Valley, Yoplait, Betty Crocker, Pillsbury, Green Giant, Progresso and Old El Paso. Headquartered in Minneapolis, Minnesota, USA, General Mills had fiscal 2012 net sales of US$16.7 billion.

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on our current expectations and assumptions. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from the potential results discussed in the forward-looking statements. In particular, our predictions about future net sales and earnings could be affected by a variety of factors, including: competitive dynamics in the consumer foods industry and the markets for our products, including new product introductions, advertising activities, pricing actions, and promotional activities of our competitors; economic conditions, including changes in inflation rates, interest rates, tax rates, or the availability of capital; product development and innovation; consumer acceptance of new products and product improvements; consumer reaction to pricing actions and changes in promotion levels; acquisitions or dispositions of businesses or assets; changes in capital structure; changes in laws and regulations, including labeling and advertising regulations; impairments in the carrying value of goodwill, other intangible assets, or other long-lived assets, or changes in the useful lives of other intangible assets; changes in accounting standards and the impact of significant accounting estimates; product quality and safety issues, including recalls and product liability; changes in consumer demand for our products; effectiveness of advertising, marketing, and promotional programs; changes in consumer behavior, trends, and preferences, including weight loss trends; consumer perception of health-related issues, including obesity; consolidation in the retail environment; changes in purchasing and inventory levels of significant customers; fluctuations in the cost and availability of supply chain resources, including raw materials, packaging, and energy; disruptions or inefficiencies in the supply chain; volatility in the market value of derivatives used to manage price risk for certain commodities; benefit plan expenses due to changes in plan asset values and discount rates used to determine plan liabilities; failure of our information technology systems; foreign economic conditions, including currency rate fluctuations; and political unrest in foreign markets and economic uncertainty due to terrorism or war. The company undertakes no obligation to publicly revise any forward-looking statement to reflect any future events or circumstances.

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