Milling & Baking News - March 28, 2017 - 17

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behind recent recipe reformulations
for Lucky Charms and Cocoa Puffs to
improve taste, as well as gluten-free
messaging on Cheerios and whole
grain messaging on a variety of cereal
brands, Mr. Harmening said.
He said the company also is addressing weakness in some of its snack
brands, adding, "we won't get back to
growth on Fiber One, certainly in the
fourth quarter."
While General Mills faces a number
of challenges across some of its legacy
brands, the company's natural and organic portfolio continues to drive double-digit sales growth. Led by Annie's,
the business is expected to generate
more than $1 billion in the fiscal year.
"Annie's is our largest brand, and
retail sales are increasing nearly 40% so
far this year in U.S. Nielsen-measured
outlets," Mr. Harmening said. "We
continue to gain distribution on Annie's established businesses, including
macaroni and cheese, fruit snacks, and
cracker lines that were in the market
when we acquired the brand. Year to
date, retail sales for those categories
combined are up 18%.
"And as you know, we've also introduced this brand into new categories,
with ready-to-eat popcorn being our
latest addition to the portfolio."
The company's Larabar brand has
achieved year-to-date sales growth
of 44% behind expanded distribution
in conventional channels, Mr. Harmening said.
"In fact, household penetration for
Larabar has grown 30% in the past
year, as we've found new ways to
reach consumers, including targeted
TV advertising," he said. "We're also
seeing good growth on Epic natural
meat snacks, with retail sales more
than doubling so far this year on good
innovation and strong distribution
gains, and we see considerable opportunity to expand household penetration on this growing brand."
Elsewhere in the business, operating
profit in the Convenience Stores and
Foodservice unit in the third quarter increased 3% to $93.6 million from $90.6
million, but sales fell 1.1% to $448.5
million from $453.7 million. General
Mills said declines in certain frozen
dough products partially were offset
by growth for its core six platforms, including cereal, biscuits and yogurt.
For the nine months ended Feb. 26,
net earnings at General Mills totaled
$1,248.6 million, or $2.12 per share,
down 5% from $1,317.8 million, or $2.20
per share. Net sales fell 6.5% to $11,813.2
million from $12,635.2 million.
bakingbusiness.com / world-grain.com

Following the earnings announcement
Credit Suisse cut its forecast of fiscal 2018
earnings by 6c per share because of expectations of 5% growth, which Credit
Suisse noted is "below the long-term algorithm of high single-digit" growth.
Robert Moskow, a research analyst
with Credit Suisse, said the projection of
lower earnings growth was "due to our
concern the company will need to make

Financial Results

a bigger investment in trade promotion
and marketing in order to stabilize the
sales declines that plagued fiscal 2017."
Mr. Moskow went on to predict fiscal
2018 will be "Jeff Harmening's first year
as c.e.o." and that Mr. Harmening will
utilize his first year as an opportunity to
"to set more realistic expectations versus
the rather audacious low double-digit
e.p.s. growth established in June 2016." MBN

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Milling & Baking News - March 28, 2017

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