General Mills Anticipates Higher Demand Beyond Pandemic
By Annie Gasparro
General Mills Inc. on Thursday said the initial surge in sales
at the start of the pandemic is moderating but expects to benefit
from consumers choosing to eat more at home for years as they
continue to grapple with financial strain and work remotely.
"What we have learned from past recessions is that the first way
consumers economize in their food budgets is by eating more at
home," said Chief Executive Jeff Harmening.
Sales at General Mills' North America retail division, which
includes U.S. groceries, rose 9% in the latest quarter from a year
ago, after jumping 14% in the quarter that ended in August.
Campbell Soup Co. last week reported a similar trend, with sales
Still, General Mills and Campbells are among the companies
continuing to bet on expectations that people will continue eating
at home more than they used to long term.
Mr. Harmening said the company's research also shows that many
consumers are enjoying the benefits of working from home and having
more time with their families. "We expect more time at home to be
an ongoing part of consumer routines," he said.
The pandemic has provided big food makers with an unprecedented
opportunity to attract millions of new consumers who filled their
pantries and refrigerators in the early months of the pandemic as
dining rooms closed and they hunkered down at home. The companies
said they want to capitalize on the momentum by investing in
marketing and production capacity.
In the latest quarter, General Mills' sales rose 7% to $4.72
billion, topping analysts' expectation of $4.65 billion. Its
adjusted earnings per share of $1.06 also beat Wall Street's
estimate of 97 cents per share.
General Mills, which makes Cheerios, Yoplait yogurt, Progresso
soup and more, said many of its brands have gained market share
Mr. Harmening said improvements the company made to its
ingredients and recipes before the pandemic have attracted
consumers. For instance, General Mills had made changes to reduce
sugar in its yogurt and add protein in its cereals.
Distributions of coronavirus vaccines in the U.S. began this
week, injecting optimism that the end of the pandemic is in sight.
However, case counts, hospitalizations and deaths from the virus
continue to rise----a grim reminder of the virus' grip on the U.S.
General Mills said it expects demand for its food to remain higher
than normal until at least the spring, when its fiscal year
"The widespread impact of vaccination will likely take time,"
Mr. Harmening said.
Write to Annie Gasparro at email@example.com
(END) Dow Jones Newswires
December 17, 2020 09:48 ET (14:48 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.