Milling & Baking News - September 21, 2010 - 14

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Healthier

General Mills top executive still
'bullish' about cereal category

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14 / September 21, 2010 Milling & Baking News

BOSTON - Despite recent reports questioning the near-term growth potential
for ready-to-eat cereal, Kendall Powell,
chairman and chief executive officer of
General Mills, Inc., told analysts at the
Sept. 8 Barclays Back-To-School Consumer Conference that the Minneapolisbased company "continues to be very
bullish about the cereal category."
"Dollar sales may be pressured a bit by
price promotion, but we are still seeing
unit volume growth when we look at the
data across all channels," Mr. Powell said.
Mr. Powell attributed the volume
growth to cereal's relevancy for today's
consumers, ranging from its value as a
low-calorie breakfast option to its standing as a good source of vitamins,
minerals, nutrients and fiber.
"Cereal eaters consume less fat,
less cholesterol, fewer calories and
more fiber than non-cereal eaters,
and importantly, more frequent cereal eaters tend to have healthier body
weights and lower body mass index Powell
measures than non-cereal eaters," he
said. "This is true of men, it's true of women,
it's true of kids, and it's true whether your
favorite cereal is Cheerios or Trix."
Even as household penetration holds
steady - about 90% of U.S. households,
or about 110 million households, buy
cereal - there's still room to grow, Mr.
Powell said, and General Mills is excited
about its prospects for building its brands
across the Big G cereal business.
"We expect Big G to show modest net
sales growth in this year's first quarter
despite a tough comparison to 9% net
sales growth last year," he said. "Consumer movement was strong a year ago
as well with dollar sales growth of 4%

in Nielsen measured channels and even
stronger pound volume increases. Despite that difficult comparison, our market share is holding up pretty well in the
first quarter."
Leading the charge for Big G is Chocolate Cheerios, which launched in January
and is on track to deliver first-year sales
of $65 million to $70 million.
"That would put it among the biggest
new product launches in the category
over the past decade," Mr. Powell said.
"It's a terrific addition to our categoryleading Cheerios franchise."
Another staple of the Big G franchise,
Wheaties, has received a boost from the
launch earlier this year of Wheaties Fuel,
the first cereal created specifically
for men.
"It's doing well and it's helping to increase sales for original
Wheaties, too," Mr. Powell said.
"We found that sampling is a key
driver of baseline sales for this new
product, so we are planning to deliver 2.5 million samples next week
at the start of the new N.F.L. season."
In general, health news has played a
role in the success of many different Big
G brands, particularly in the adult cereal
segment. To that end, General Mills recently extended its Total franchise with
the introduction of Total Plus Omega-3.
The new cereal offers 100% of the daily
value of 12 essential vitamins and minerals, as well as 10% of the daily value of
omega-3 fatty acids from ground flax.
"According to the NPD Group, 50% of
adults in the U.S. are trying to get more
omega-3s in their diets and there aren't
many other cereals available that offer
this benefit," Mr. Powell said. MBN

U.S.D.A. enrolls 4.3 million acres
in Conservation Reserve Program
WASHINGTON - Secretary of Agriculture Tom Vilsack on Sept. 14 announced the U.S. Department of Agriculture will accept 4.3 million acres into
the Conservation Reserve Program.
In the 39th general signup for the nation's primary rural land conservation
program just concluded, producers offered 50,000 contracts covering 4.8 million acres, so nearly all contracts offered
were accepted.
"Interest in this open enrollment period was high, and I'm pleased that producers and landowners across the nation

continue to realize the environmental
benefits of enrolling land in the C.R.P.,"
Mr. Vilsack said.
The signup brought overall enrollment of land in the C.R.P. to 31.2 million
acres compared with the statutory cap
of 32 million acres. The results left room
under the cap for the enrollment of additional acres via the Conservation Reserve Enhancement Program, a continuous signup mechanism, as well as other
C.R.P. initiatives through fiscal 2011.
The average rental rate for the 39th
signup was about $46 per acre. MBN
bakingbusiness.com / world-grain.com

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Milling & Baking News - September 21, 2010

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