General Mills (GIS)

    In fiscal 2007, Big G cereals net sales grew 2 percent as a result of new product launches such as Fruity Cheerios and Nature Valley cereals, and continued strong performance of the Cheerios franchise. Net sales for the Meals division grew by 5 percent led by the introduction of Progresso reduced sodium soups and Hamburger Helper Microwave Singles, and the continued strong performance of our other Hamburger Helper and Progresso offerings. Net sales for Pillsbury USA increased 3 percent as core refrigerated dough products, Totino’s Pizza Rolls pizza snacks and Toaster Strudel pastries all generated solid growth. The Yoplait division’s net sales grew 6 percent primarily due to strong performance by Yoplait Light, Go-GURT, and Yoplait Kids yogurt. Net sales for the Snacks division grew 10 percent led by continuing growth for Nature Valley granola bars and the introduction of Fiber One bars. Baking Products net sales grew 3 percent reflecting greater focus on product lines such as Bisquick baking mix and Warm Delights microwaveable desserts.

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    For fiscal 2006, Big G cereals net sales declined 1 percent as our merchandising activity lagged competitors’ levels, particularly in the first half of the year. The Meals division’s net sales grew by 7 percent led by Progresso soup and Hamburger Helper. Pillsbury USA net sales declined 1 percent due to weakness in frozen breakfast items, frozen baked goods, and refrigerated cookies. Net sales for the Yoplait division grew 14 percent over fiscal 2005 primarily due to growth in established cup yogurt lines. Net sales for the Snacks division grew 5 percent led by Nature Valley granola bars and Chex Mix products. Baking Products net sales grew 6 percent reflecting the introduction of Warm Delights microwaveable desserts and strong performance during the holiday baking season.

    Operating profit of $1.9 billion in fiscal 2007 improved $95 million, or 5 percent, over fiscal 2006. Unit volume increased operating profit by $127 million, and inflation in ingredients (primarily grains and dairy), energy, and labor costs was more than offset by efficiency gains at our manufacturing facilities resulting from cost-saving capital projects, changes to product formulations, and continued actions to reduce low-turning products. These increases in operating profit were partially offset by $46 million of brand-building consumer marketing spending.

    Operating profit of $1.8 billion in fiscal 2006 improved $56 million, or 3 percent, over fiscal 2005. Unit volume increases accounted for approximately $89 million of improvement. Net pricing realization and product mix contributed $98 million. These factors exceeded manufacturing and distribution rate increases of $77 million, and increases in consumer marketing spending of $32 million.

INTERNATIONAL SEGMENT   In Canada, our major product categories are ready-to-eat cereals, shelf stable and frozen vegetables, dry dinners, refrigerated and frozen dough products, dessert and baking mixes, frozen pizza snacks, and grain, fruit and savory snacks. In markets outside North America, our product categories include super-premium ice cream, grain snacks, shelf stable and frozen vegetables, dough products, and dry dinners. Our International segment also includes products manufactured in the United States for export internationally, primarily to the Caribbean and Latin American markets, as well as products we manufacture for sale to our international joint ventures. Revenues from export activities are reported in the region or country where the end customer is located. These international businesses are managed through 34 sales and marketing offices.

    The components of net sales growth are shown in the following table: