One of America’s best-known food companies is under scrutiny from the Texas Attorney General’s office, market analysts and consumers.
While the company recently released its fiscal 2025 third-quarter results – revealing soft sales and lowered expectations – its legal and reputational risks are mounting amid growing backlash against petroleum-based dyes in food.
Growing legal storm
On 13 May, Texas Attorney General Ken Paxton announced a formal investigation into General Mills, issuing a Civil Investigative Demand (CID) regarding its marketing of cereals like Trix and Lucky Charms.
Paxton’s office claims the Minneappolis-headquartered company is promoting these products as ‘healthy’ and a ‘good source’ of vitamins and minerals despite the inclusion of petroleum-based food dyes, which have been linked to a host of health issues, including hyperactivity disorders, endocrine disruption and obesity.
“Under my watch, big food companies should be on high alert that they will be held accountable if they put toxic ingredients in our food and engage in false marketing,” said Paxton. “I’m proud to stand with the Trump Administration and Secretary Kennedy in taking on petroleum-based synthetic dyes and will always fight to protect the health of the American people. That includes working tirelessly to ensure that food products are not illegally and deceptively marketed by corporations, which is why I’ve launched this investigation into General Mills.”
The investigation arrives just weeks after a consumer-led boycott of General Mills products began making headlines, reflecting growing dissatisfaction over the company’s alleged use of “toxic ingredients, supposed opposition to GMO labelling transparency and its contribution to the global plastic pollution crisis,“ according to People’s Union founder John Schwarz. The boycott rapidly gained traction across social media and advocacy platforms, spotlighting a broader cultural shift toward transparency, ingredient integrity and corporate ethics.
The AG’s investigation also mirrors a wider regulatory shift. The Food and Drug Administration (FDA) recently banned Red Dye No 3 due to cancer concerns and intends to phase out several other synthetic dyes – including Yellow 5, Yellow 6, Blue 1, and Blue 2 – by the end of 2026. These additives, which are common in brightly coloured cereals, are already restricted or require warning labels in regions such as Europe and Canada, where General Mills reformulates its products without artificial dyes.
Although the company pledged in 2015 to remove artificial dyes from six of its cereals and initially followed through, Paxton’s office claims it resumed using them in US products just two years later. Meanwhile, General Mills continues to offer dye-free versions of these cereals in international markets, raising questions about why American consumers are treated differently.
Weak quarter, weaker confidence
The timing of the investigation couldn’t be worse for General Mills, which is also contending with softer-than-expected financial results. The company reported third-quarter net sales of $4.8 billion, down 5% year-over-year. Organic net sales also declined 5%, dragged down by retailer inventory reductions and unfavourable timing effects.
Operating profit fell 2% to $891 million, while adjusted operating profit dropped a more sobering 13% to $801 million. The company’s adjusted diluted earnings per share came in at $1.00, down 15% from the same period last year.
“Our third-quarter organic net sales finished below our expectations, driven largely by greater-than-expected retailer inventory headwinds and a slowdown in snacking categories,” said Jeff Harmening, chairman and CEO of General Mills. “At the same time, we drove continued positive market share trends in Pet, Foodservice, and International, as well as improvement in Pillsbury refrigerated dough and Totino’s hot snacks.”
Harmening reaffirmed the company’s commitment to long-term growth through its Accelerate strategy, which emphasises innovation, brand communication, cost-efficiency and portfolio reshaping.
To regain momentum in fiscal 2026, General Mills plans to ramp up investment in product innovation, brand communication and consumer value, funded in part by cost-cutting initiatives and Holistic Margin Management (HMM) savings.
Brand equity at stake
But that message may be overshadowed by regulatory concerns and wavering consumer loyalty.
While General Mills may be focused on operational efficiencies and growth strategies, legal and reputational risks are quickly taking centre stage. The company is increasingly under pressure from a vocal and expanding consumer base demanding accountability for what goes into their food.
Paxton’s message is clear: “Food companies that continue to rely on outdated, toxic additives while claiming to promote health will be held accountable under Texas law.” The AG also pursuing a similar investigation into WK Kellogg Co over its use of synthetic dyes and ‘healthy’ product labelling. However, General Mills’ history of dye-related pledges and reversals makes it a prominent target.
On 22 April, Health and Human Services Secretary Robert F Kennedy and FDA Commissioner Marty Makary announced plans to remove these additives from the US food supply by 2026. Makary stated that removing these synthetic ingredients would “boost children’s health outcomes significantly”.
If the investigation escalates into litigation or results in a settlement that mandates reformulation or labelling changes, General Mills will face direct financial penalties, along with the cost of modifying manufacturing and supply chain processes across the US.
While the quarterly decline in net sales and profit could be attributed in part to macroeconomic pressures, including rising input costs and inventory adjustments, the reputational damage from regulatory scrutiny may be harder to quantify but potentially more enduring.
Paxton’s office was quick to point out the discrepancy between General Mills’ US and international product lines, stating, “Despite acknowledging potential health risks, General Mills has not included warnings for American consumers, while offering reformulated, dye-free cereals in other countries.”
This type of inconsistency has previously impacted consumer trust in other sectors. For General Mills, whose brand equity relies heavily on perceived wholesomeness and family-friendly messaging, even the hint of hypocrisy can alienate its core customer base.
Navigating the fallout
The boycott, growing regulatory pressure and weak quarterly performance all point to a company at a crossroads. Reformulating US products to match international standards may no longer be just a branding or compliance issue – it could become a business imperative.
For now, General Mills must navigate a complex balancing act: meeting consumer expectations, satisfying shareholders and avoiding further legal entanglements. With its reputation, regulatory standing and market performance all under the microscope, the stakes are only getting higher.
