According to CEO Jeff Harmening, the company is off to a good start in fiscal 2019, but its US snacks unit registered a 4% sales decline during the quarter.
“Within the US, Lärabar posted another quarter of double-digit retail sales growth, while Nature Valley retail sales were down 1%,” he said. “Fiber One, on the other hand, has underperformed our expectations with retail sales down more than 20%, driven by intense competitive pressures and distribution declines.
“We have more work to do on Fiber One… we expect improved performance in our US snack bars business in the back half of the year, leveraging media and innovation to support Nature Valley, Lärabar, EPIC as well as Fiber One,” he added.
Organic and international growth
General Mills’ snacks business benefited from the growth of its natural and organic portfolio.
“We are seeing strong performance on our core products [in our natural and organic segment], including mid-single-digit growth on Annie’s organic fruit snacks and graham crackers in the first quarter,” said Harmening.
“We are also seeing good performance [from] EPIC snack bars growing in double digits.”
Even though Nature Valley and Fiber One saw revenue drop in the US, these brands registered positive growth on international markets, particularly in Europe and Australia.
He added Pillsbury Cookie Cake bars are growing rapidly in India and the company is working to expand brand penetration and growing distribution in Mexico and other parts of Latin America.
General Mills US cereal business posted a 1% revenue growth in Q1, driven by Lucky Charms, Trix and other core brands.
Harmening said: “Trix posted more than 60% retail sales growth behind the relaunch of our classic tricks colors and marshmallow news helped Lucky Charms post 9% retail sales growth on top of last year’s 16% growth rate.
“Our new Cheerios Oat Crunch offering already captured a half a point of share in the category in August as we continue to deliver new benefits on the country’s largest cereal brand,” he said.
“And our first quarter success extended to away-from-home outlets with cereal net sales in our convenience stores and foodservice segment up low single digits, given by continued strong performance and K-12 schools and colleges and universities.”
However, Harmening added: “CPW’s [Cereal Partners Worldwide, a joint venture between General Mills and Nestlé] net sales were down 2% in constant currency due to declines in Latin America partially offset by strong performance in Asia, Middle East and Africa.”
General Mills expects a double-digit top and bottom line growth for this year.