General Mills, Inc. GIS recently announced that it has reduced sodium by 20% or more in 7 out of 10 key U.S. product categories, almost meeting the goals set five year back.
In 2010, the company committed to cut sodium by 20% across 10 key U.S. retail product categories by the end of 2015. The categories include cereals, dry dinners, frozen pizza, Mexican dinners, refrigerated dough products, savory snacks, canned vegetables, side dishes, soups, and a variety of baking mixes.
General Mills has met or exceeded the target in seven categories. However, it could not meet the target in three categories, namely ready-to-serve soup, Mexican products and cereal. Nevertheless, sodium reductions across these three categories are between 18% and 20%. With these efforts, the company plans to target the growing number of health-conscious customers who prefer the convenience of packaged food without compromising on health.
Health and nutrition remains the key focus of General Mills. The company has committed to remove artificial flavors and colors from the entire cereals portfolio by 2017. Currently, 60% of the cereals are devoid of these ingredients.
Over the years, General Mills has built a portfolio of natural and organic brands, beginning with the Small Planet Foods acquisition in 2000 and followed by Larabar, Mountain High, Liberte, Food Should Taste Good and Immaculate Baking buyouts.
The addition of Annie's last year raised the company’s overall natural and organic portfolio to over $600 million in net sales. With this acquisition, General Mills became one of the largest natural and organic food manufacturers in the U.S. The natural and organic brands are expected to deliver double-digit sales growth in fiscal 2016. The company is expanding the distribution of these brands and expects this business to reach $1 billion in sales by fiscal 2020.
Food companies are frequently devising ways to meet the evolving demand for products with improved nutrition or simpler ingredients. They are eliminating/reducing unwanted sugar, cholesterol, trans and saturated fat and sodium content of existing food products.
Other than General Mills, Kellogg Company K has committed to remove artificial flavors and colors from its cereals, while The Hershey Company HSY is gradually shifting to using simpler ingredients like locally produced milk, roasted California almonds, cocoa beans and sugar in the chocolate items. Hershey launched healthier versions of Hershey’s Kisses milk chocolates and Hershey’s milk chocolate bars this holiday season. Campbell Soup Company CPB is also striving to remove preservatives, artificial colors and flavors from its soups.
Separately, General Mills announced the election of two members — Roger W. Ferguson Jr. and Eric D. Sprunk — to its board. While Ferguson was, until recently, serving as the CEO of TIAA-CREF, a financial services firm, Sprunk held the position of Chief Operating Officer of athletic footwear and apparel company, NIKE, Inc.
The board also declared quarterly dividend of 44 cents per share, payable on Feb 1, 2016, to shareholders of record as of Jan 11.
General Mills carries a Zacks Rank #3 (Hold).
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