Thursday, August 07, 2014

General Mills sharpens focus on cereal

The cereal industry has been struggling as of late, despite some positive signs here and there. The big companies, in particular, have been trying to figure out how to stem the tide among many shifts in consumer habits and preferences.

I typically avoid commenting on all the quarterly financial reporting, etc. coming out of the cereal industry, but last month General Mills announced some plans they have for the future. While most of this is the expected PR stuff, it was interesting to see them doubling down on cereal, despite the diversity of their brand portfolio. They still see cereal as a tremendous opportunity and want to insure that they remain a leader in this industry.

How will they do it? A few key strategies were described:

1. Focus on nutrition qualities such as protein, gluten-free and fiber. They recognize that consumers want healthful cereals and they want to capitalize on that.

2. More flavor. Cereals must taste great, and they will be tweaking their recipes to meet that challenge. For example, more cinnamon taste in Cinnamon Toast Crunch and fruitier Trix.

3. Play off of adult nostalgia. Cereal has an emotional attachment to many people, and to help adults return to their childhood every morning could be a winner.

4. More advertising, especially online.

It is good to see a company like General Mills hone in on their core business. Their strategies seem sound, but the key will be execution. Can a large corporation respond quickly and creatively enough to the trends, and will consumers trust these moves when they are sometimes less than authentic?

We'll be watching.

(Source: Business Week)

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