General Mills Inc. (GIS), which owns popular food products like Cheerios, Progresso, Pillsbury, Yoplait, reported a dip in profits on Wednesday. The Minneapolis-based company has had recent struggles appealing to Americans' changing tastes and lifestyles.
General Mills' revenue dropped 7 percent to $3.91 billion in the latest quarter, and quarterly net sales fell for the fifth-straight quarter.
Products like their Betty Crocker cake mix have taken a plunge due to customers' preferences of ingredients, while the company’s yogurt products are also being overlooked by customers who have opted for Greek-style items. Yoplait Light sales have plummeted by 30 percent.
Chief executive officer Ken Powell said the company's "net sales performance did not meet our expectations due to the challenging macro environment, a difficult year-over-year comparison, and a slower start to the year on certain businesses."
General Mills might be affected by growing consumer interest in healthy eating and more emphasis on ingredients. The company attempted to please customers by changing out the aspartame in Yoplait light for popular sweetener Splenda. The company determined that the switch did not help profits but it did not hurt them either.
However, the company’s decision to sell gluten-free products proved successful with customers, prompting a sales surge, according to recent reports. But president and chief operating officer Jeff Harmening admitted that following the healthy trend when it comes to producing products isn’t always a smart idea. He noted that making something more appealing depends on the specific product.
The company experienced a rise in sales when they added more cinnamon to Cinnamon Toast Crunch cereal and made Cocoa Puffs “more chocolatey.” Progresso soups also switched to antibiotic-free chicken, while Yoplait bolstered its protein.
Powell maintains that they will continue to monitor the “shifting values” of customers to make sure they are satisfied with their products. "These changes in attitude are not elusive," Powell said.