The marketer of Cheerios, Pillsbury, Yoplait and Betty Crocker has become a stalwart of the Great Recession, thanks to increased spending, but also product innovation and its ability to capitalize on the trend toward in-home eating.
For the third fiscal quarter of 2010, General Mills saw sales rise 3% to $3.6 billion, and in the U.S. sales rose 4% in the first nine months of fiscal 2010 to $7.9 billion.
The marketer posted an impressive 33% jump in advertising and media spending. Stifel Nicolaus analyst Chris Growe noted that "General Mills has quickly reached a critical mass in its marketing spending that vaults it up to the second-highest marketer within the food industry" behind only Kraft. And it might even be closing in on the leader: According to an Ad Age estimate, General Mills spent $1.2 billion on advertising alone during 2008, a 23% increase over the year before, just below the $1.3 billion Kraft spent on advertising during 2008, a 16% decrease from 2007.
"We are first and fundamentally about brands," CMO Mark Addicks said, "and I feel good about the brands and the growth ideas about each [of them]."
The real challenge in this recession, Mr. Addicks said, has been to demonstrate each brand's value and purpose as well as versatility. To wit: The company's new chocolate Cheerios, for instance, are proving popular not only as breakfasts, but as snacks and desserts.
These days, he said, consumers are asking, "What role do you play in my life, and what value do you give me? I'm proud of our business teams and the ways they're answering that question and playing more of a partnership role with our consumers in their lives."
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