General Mills gets its Kix trying to grab the biggest-bowl prize as the US's #1 breakfast cereal maker (wrangling for the top spot every year with über-rival Kellogg). But #1 or not, the company has supermarket aisles full of kid-friendly morning-meal products. Its Big G Cereals include the well-known brands Cheerios, Chex, and Wheaties. But breakfast isn't the last meal on the menu at General Mills. The company makes ice cream (Häagen-Dazs), canned soup (Progresso), frozen dough products (Pillsbury), and Green Giant brand veggies. General Mills, which produces yogurt under the Yoplait brand, bought a controlling stake in the world's second-largest yogurt maker for $1.2 billion in 2011.
The food giant's sales inched up less than 2% in fiscal 2011 (ends May) vs. the prior year, with overseas sales growth up 7%, while its US sales grew by less than half a percent. Sales at its core US Retail segment, which contributes more than two-thirds of General Mills' total sales, declined in 2011, with Big G Cereals, Meals, Pillsbury, and Baking Products all posting negative annual sales comparisons. Yoplait, snacks, and Small Plant Foods posted gains.
The cereal business is plagued with rising ingredient and other raw materials costs and competition from private-label products, which have improved greatly in quality and are growing in popularity with cost-conscious consumers.
With yogurt and international serving as growth engines, it's no wonder General Mills acquired the 50% stake in Yoplait owned by French investment firm PAI Partners plus 1% from dairy cooperative Sodiaal. PAI and Sodiaal had been joint owners of Yoplait; Sodiaal retained its remaining 49% interest in the yogurt brand. Additionally, General Mills purchased a 50% share of a related firm that owns Yoplait's global branding rights. (Sodiaal kept the remaining stake in the branding entity, as well.) Prior to the deal, General Mills had been Yoplait's largest licensee, selling yogurt under the brand since 1977. (Yoplait sales account for about 10% of General Mills' revenues and have helped offset some weakness in its core cereal business.) General Mills said it aims to further strengthen Yoplait's name as well as expand its operations in France, Europe, and the rest of the world.
Earlier in 2011, the company acquired Dean Foods' Mountain High yogurt business for about $85 million. Mountain High produces all-natural yogurt in large sizes (32- and 64-ounce containers) and smaller 6-ounce cups. The brand became part of General Mills' Yoplait USA division, which expects to benefit from Mountain High's strong brand recognition and the demand for large-size yogurts. Also during 2011 General Mills acquired Australia's Pasta Master, a maker of chilled Italian meals, pasta, and sauces. The purchase, valued at nearly $40 million, broadened General Mills' ready-to-cook pasta offering and follows the recent divestment of its frozen bakery assets in Australia.
While most of its brands are found in supermarket chains, General Mills is a player in the natural foods niche with its Small Planet operation (established in 2000), which makes natural foods brands Muir Glen (canned tomato products) and Cascadian Farms (frozen fruits and vegetables). Small Planet posted a big sales gain in 2011: up 13%. To build on that success, General Mills in 2012 acquired Food Should Taste Good, a fast-growing natural snack foods company, and added it to Small Planet's portfolio of brands.
A major player in the international food sector, General Mills manufactures its food products in 15 countries and distributes them in more than 100. Its other products include such familiar brands as Gold Medal flour, Betty Crocker and Bisquick baking mixes, Hamburger Helper dinner mixes, and Fruit Roll-Ups snacks, as well as "ho, ho, ho" Green Giant canned and frozen vegetables. The company's primary customers include grocery stores, mass merchandisers, membership club stores, natural food chains, drug, dollar, and discount chains, commercial and non-commercial foodservice distributors and operators, as well as restaurants, and convenience stores. Wal-Mart, which accounted for 23% of the company's net sales in 2011, is General Mills' largest customer.
General Mills has two significant joint ventures -- Cereal Partners Worldwide with Nestlé, which, along with the Big G cereals, sells breakfast brands such as Chocapic, Nesquick, Shreddies, and Uncle Toby's; and Häagen-Dazs Japan, which operates ice cream cafés in the Land of the Rising Sun.