General Mills, a US food industry heavyweight, is anticipating an improvement in volume across all segments. The company reported a 6% year-on-year drop in net sales in its fourth-quarter results. CEO Jeff Harmening is optimistic about driving better volume results through reinvestment and enhancing the value proposition for consumers. He highlighted the importance of improving competitiveness by creating more value for consumers, particularly in the face of 3-4% inflation in the broader market.
Like other major players in the food industry, General Mills has raised prices in response to rising supply chain inflation. The focus now is on attracting consumers who may have shifted towards cheaper private-label alternatives. Harmening emphasized the effectiveness of increasing coupon spending and the need to sharpen price points where necessary.
In addition to pricing actions, increased promotional activity is also part of General Mills’ strategy to rebuild volumes. The company plans to utilize promotional intensity to highlight the value of its big brands and attract consumers. This includes reintroducing the Pillsbury Doughboy character as part of its promotional efforts.
Despite challenges in markets such as Brazil and China, General Mills remains committed to driving volume growth and increasing market share. While the company reported a decline in net sales and operating profit in the fourth quarter, it is focused on improving volume performance in the coming year.
Analysts have noted the company’s struggle to achieve the expected recovery in market share and volume growth. While volume trends are expected to improve, investors remain cautious about the company’s performance amid challenging market conditions.
Overall, General Mills is working towards regaining its competitive edge in the food and beverage industry by balancing volume growth with premiumization efforts. The company remains focused on providing value to consumers and rebuilding its market share through a combination of pricing strategies and promotional activities.
