General Mills Anticipates Higher Demand Beyond Pandemic -- Update
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 or work remotely.
"What we have learned from past recessions is that one of the
first ways consumers look to save money is by eating at home more
than at restaurants," Chief Executive Jeff Harmening said in an
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 Campbell are among the companies
continuing to bet on expectations that people will keep eating at
home more than they used to long term.
Mr. Harmening said many consumers are enjoying the benefits of
working from home and having more time with their families. "I am
highly confident people won't be going into the office as much as
they used to; they won't be going on as many business trips," Mr.
Harmening said. "That means eating more at home."
The coronavirus pandemic has provided big food makers with an
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.
"This is really about ensuring that we have a shot at holding on
to some of the gains that we're seeing in this environment," Mr.
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. General Mills shares rose slightly Thursday,
in line with the broader stock market.
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.
General Mills said it has largely rebuilt inventories of its
food that were depleted in the early months of the pandemic, but it
still has significant capacity issues with soup, dessert mixes and
Old El Paso taco shells.
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 reminder of the virus' toll on the U.S.
"We're still very much in the midst of a pandemic," Mr.
Harmening said. "The widespread impact of vaccination will likely
Write to Annie Gasparro at firstname.lastname@example.org
(END) Dow Jones Newswires
December 17, 2020 11:57 ET (16:57 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.