Economic Downturn Boosts General Mills' Sales

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Researched by Industrial Info Resources (Sugar Land, Texas)--General Mills (NYSE:GIS) (Minneapolis, Minnesota) announced in a fiscal 2009 midyear update that it will meet or exceed its goals for the fiscal year, as growing demand has helped to boost sales. As a result of the economic downturn, General Mills is benefiting from more consumers choosing to eat at home in an effort to save money. "We have a clear model for growth, and we're executing it well," said Ian Friendly, Chief Operating Officer - U.S. Retail. "It starts with a great business portfolio. I'd call it a portfolio for all seasons." Sales for the first half of the fiscal year were up 11%, he said.

Industrial Info is tracking two active General Mills projects as part of our North American Project Database. One is a maintenance shutdown, and the other is an expansion of a yogurt plant. General Mills' Yoplait yogurt division accounts for nearly $4 billion in retail sales, division President Bob Waldron said. The segment ranks second among General Mills' divisions after cereal.

The company posted an 11% increase in the second quarter to $7.5 billion. Segment operating profit grew despite sharply higher input costs, and earnings after tax totaled $657 million. "Earnings growth is a result of strong consumer demand for our products in markets around the world," Chief Financial Officer Don Mulligan said. "Through the first half, we recorded sales gains in every division and operating segment of our business. This broad-based momentum reflects the fundamental strength of our business portfolio."

General Mills foresees growth opportunities in regions like Europe, since the company is still relatively new to its markets, said Chris O'Leary, Chief Operating Officer - International. He said the company has seen continued growth in areas such as the U.K. and Germany, although growth has slowed some in France and Spain. "Many of our brands are still in the early growth stage, so we have great opportunities to grow just by expanding distribution," O'Leary said. "We also have a lot of head room to increase household penetration and buying rates for our brands."

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