General Mills rides snack boom

  • Article by: MIKE HUGHLETT , Star Tribune
  • Updated: May 26, 2013 - 7:02 AM

Foodmakers are trying to square Americans’ penchant for snacking and their desire for nutritious options.

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Grant Jacobs, a sales associate at a Holiday convenience store in Plymouth, showed off a basket of popular General Mills snacks.

Photo: Photos by ELIZABETH FLORES • eflores@startribune.com,

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The Jolly Green Giant has a new gig: hawking salty snacks.

Green Giant is synonymous with vegetables, from broccoli to beans. But General Mills is expanding its venerable brand to the burgeoning “veggie chip” market.

Sound far-fetched? Well, the Golden Valley-based packaged foods giant took its Fiber One brand from the cereal aisle to the snack bar shelves, creating a $300 million-plus business in just a few years.

Snacks have been the hot growth spot for packaged food firms worldwide, and General Mills is embracing the trend. From its ubiquitous Nature Valley bars to myriad Chex Mix offerings, snacks have been General Mills’ strongest U.S. business over the past five years.

The boom in snacks mirrors long-term changes in consumer eating habits, ­particularly the relentless trend of on-the-go eating. But researchers are wondering if all this snacking is just adding calories to an already bloated American diet.

Food firms face a paradox: People want to be healthier, but at the same time they yearn to pig out on chips and cookies. The industry supplies plenty of the latter, but generally sees healthier options as the future.

“As people snack more, they are increasingly looking for ‘better-for-you’ snacks,” said Jon Nudi, head of General Mills’ U.S. snacks business.

Mills has its indulgent treats — Nacho Cheese Bugles, anyone? — but it skews toward healthier snacks like Fiber One bars and granola-based products, food industry analysts say.

Nudi’s snack division had nearly $1.6 billion in sales last year, and has posted average annual sales growth of 8.4 percent over the past five fiscal years. The snack division’s success has helped compensate for a big downturn in General Mills’ U.S. Yoplait business, which has been hammered by its weak position in the flourishing Greek yogurt market.

The snack surge is also helping to drive financial improvements in General Mills’ food service division, a $2 billion business that sells through schools, health care facilities and, of course, convenience stores. “C-stores are the champion of snacking,” said Dave Dudick, General Mills senior vice president for bakeries and food service.

General Mills also has been building a snacking business in its natural and organic foods division through the purchase of Larabar energy bars and Food Should Taste Good salty snacks.

And snacking helped fuel one of General Mills’ biggest acquisitions in years, the nearly $1 billion deal in 2012 for Yoki Alimentos, a Brazilian food maker with a strong share of that country’s popcorn and salty snack market.

Meanwhile, Mills’ rival Kellogg last year shelled out $2.7 billion for Pringles potato chips, which are big in international markets. Over the past month, there’s been buzz about a possible epic global combination of PepsiCo’s salty snack business — Doritos, Tostitos, Lay’s, etc. — with Mondelez, home to such famous sweet brands as Cadbury, Oreo and Nabisco.

“Overall, the snack market is growing globally because of the increasing time poverty among consumers,” said Lamine Lahouasnia, Euromonitor International’s global head of ­packaged food research. Whether in India or Indiana, people are working longer hours and women are exiting traditional domestic roles. “We all have less time to ­prepare proper meals at home,” ­Lahouasnia said.

Success in snack bars

In the United States, snack growth has been strongest in healthier snacks, according to Euromonitor, and that includes snack bars — General Mills’ forte. The company led the U.S. snack bar market in 2012, gaining share on Kellogg, the solid No. 2 player and maker of Nutri-Grain and Special K bars, according to Euromonitor.

General Mills pioneered the granola bar market in 1975 with the Nature Valley brand, which today does more than $700 million in sales and comes in more than 30 varieties. “What’s really driven our success is aggressive innovation,” said General Mills’ Nudi.

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  • Robert Ball, who travels a lot for his job, makes frequent stops for snacks, including at this Holiday store in Plymouth on Wednesday. ­Convenience stores are the champions when it comes to selling snacks, said one General Mills senior vice president.

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