NEW YORK — New product introductions will play a key role in General Mills Inc.’s fiscal 2019 strategic plan. Management expects the company to achieve additional levels of new product growth in the next fiscal year that will continue to grow its top line.
The company’s financial targets in fiscal 2019 include growing net sales 9 percent to 10 percent, which includes organic sales flat to up 1 percent; seeing its adjusted operating profit rise 6 percent to 9 percent; and adjusted earnings per share coming in flat to minus 3 percent.
“Innovation plays a key role in driving growth across all of our categories,” said Jonathan J. Nudi, group president of North American Retail, on July 11 during the company’s annual investor day presentation in New York. “After declining for a few years, a percent of our net sales driven by new products increased in fiscal '18. And in fiscal '19, we expect to return to our historic levels of innovation, with items launched in the past year representing roughly 6 percent of net sales across our portfolio with some categories well above that average.”
In yogurt, Nudi said the overall category was down 3 percent in fiscal 2018 and the Greek segment was down 6 percent. General Mills plans to grow its Oui brand, which was launched in fiscal 2017 and will reach $100 million in sales during its first year. New product initiatives will include extending the line into snacking with the introduction of Oui petite pots.
“In addition to expanding Oui, we're introducing YQ, a new yogurt brand made with ultra-filtered milk that delivers what modern consumers are looking for today: high-protein, less sugar, simple ingredients and great taste,” Nudi said. “YQ launched just a few weeks ago with a unique approach targeting key health influencers. The initial response has been terrific …”
In snack bars, the company will feature a spate of new products during fiscal 2019. In the first half of the year General Mills will launch granola bites under its Nature Valley brand. Under the Larabar brand new products will target the children’s market.
“Beyond Larabar, we're expanding our presence in the nutrition bar space with the launch of two new brands,” Nudi said. “First, we're launching Epic Performance Bar, a whole-food protein bar made with five to six simple, non-G.M.O. ingredients. Every bar contains 12 grams of protein, which comes from cage-free egg whites and nuts without any added sugar.
“We're also expanding our GoodBelly bar, the first snack bar to offer probiotic benefits. We saw great results at the launch of this product in the natural channel last year, and we're excited to expand distribution on this terrific product in fiscal '19.”
New innovation efforts in Europe include Liberte branded pots in the United Kingdom.
“This is drafting off of Oui by Yoplait platform and bringing it to the UK consumer,” said Bethany C. Quam, group president of Europe and Australia. “And we'll invest to remind French consumers about the simple indulgence of Perle de Lait. We're also expanding into the fast-growing organic yogurt segment with new launches on Petits Filous as well as Panier. We think these efforts will help to position our yogurt business for growth in a dynamic and evolving category.”
Quam added that the company is working to share new product ideas across geographies quickly.
“In Europe, our Nature Valley innovation pipeline continues to draw more products that have proven successful in North America,” she said. “In fiscal '17, we launched Nature Valley protein bars. In fiscal '18, we launched nut butter biscuits. In fiscal '19, we'll introduce nut butter cups, which has been a top performer in the US. We're also continuing to expand our Fiber One brand in fiscal '19 with the launch of Fiber One popcorn bars and cake bars, further showcasing our ability to deliver remarkable tasting products with only 90 calories.”
While General Mills is seeking to accelerate top-line growth through innovation, management also committed to divesting businesses that make up 5 percent of sales during the investor day presentation. The company did not offer a timeline, and Donal Leo Mulligan, chief financial officer, said there is nothing in the company’s plan or guidance related to divestitures this year.
“We haven't put a timeline on it, and I'm not looking to put a timeline on it,” said Jeffrey L. Harmening, chairman and CEO. “We'll divest to the extent it's going to benefit shareholders. We're not going to do it because it's strategically interesting, but it doesn't benefit shareholders.”