General Mills posts record result

Posted by Isobel Drake on 2nd July 2009

Grocery manufacturing giant General Mills has posted 8 per cent sales growth for the year to May 31 as core brands like Cheerios, Yoplait and Betty Crocker drove a volume increase of 2 per cent.

The maker of Latina and Old El Paso continued to show the resilience of food manufacturers, and their ability to increase volumes highlighted their strength given the amount of destocking undertaken by supermarkets. The company performed particularly well in the Asia Pacific region, with a 16 per cent sales rise on constant currency terms.

“In today’s very challenging economic environment, our leading food brands offer the quality, convenience and value that consumers are looking for and, as a result, our businesses are showing strong growth,” Chairman and Chief Executive Officer Ken Powell said. “In 2009, we held our margins in the face of sharply higher input costs, and we significantly increased the level of consumer marketing support for our brands. ”

General Mills, the 33rd largest supplier in the Australian grocery sector, is anticipating further growth in 2010 as new products drive solid volumes.

“Our product categories are on-trend with consumer needs, and we’ve got a good line-up of product news and innovation planned for the new year, so we expect our business to generate good growth again in fiscal 2010,” Mr Powell advised. “Our plans assume that world economic conditions remain challenging, and that foreign currency translation and transaction effects will reduce our reported sales and earnings growth rates. However, we expect the rate of input cost inflation to moderate, and we believe savings from our holistic margin management initiatives will exceed cost increases.”