An investor asked General Mills CEO Jeff Harmening to rank what brands will be driving the company's growth in the coming years.
He did not hesitate. Blue Buffalo, the pet food brand General Mills acquired for $8 billion five years ago, is No. 1 on that list.
"Without question, the growth as we look at the next couple of years is going to be led by our Blue Buffalo pet food business," Harmening said at an investor conference on Wednesday. "It's been a gem of a business. We've doubled it in size. We've increased the distribution by four times ... and we ran out of capacity this last year."
The Golden Valley-based food maker has been on a run of growth in recent years but is tempering expectations for the post-pandemic era ahead.
"Our whole enterprise will grow 2 percent to 3 percent in a more normal environment, which we have not reached yet," Harmening said. The company expects sales to grow 10% for the recently completed fiscal year and just saw quarterly sales rise 13% in its winter quarter — staggering growth compared to its pre-pandemic levels.
The CEO told the crowd at the Deutsche Bank dbAccess Global Consumer Conference there are five areas that have growth potential and "competitive advantages" in the slower-growth years ahead.
After pet food comes Häagen-Dazs, the ice cream brand that General Mills owns and operates outside of North America.
"We had a tough year this year because we had a product recall that kind of stunted that growth, but we've got really good new product innovation on Häagen-Dazs," Harmening said.
Häagen-Dazs unveiled a line of yogurt this week and plans to bring six flavors of Cultured Crème to stores this summer.
Harmening then called out Old El Paso, the Tex-Mex brand that has seen "nice double-digit growth" and has a following in Europe — and a partnership with the LeBron James Foundation.
The snack bars business, including Nature Valley and Larabar, has more potential than recent success.
"We need to innovate better on bars. We need to execute better, and we need to have more capacity," Harmening said. "We feel good about our ability to compete."
Cereal is the fifth pillar of growth for General Mills.
"It won't grow as fast as those other four platforms," Harmening said. "But if we gain a little bit of market share and grow and make a little bit more money in cereal every year, we'll like the outcome of that."
He took a shot at Kellogg as the rival cereal maker prepares to spin off its cereal business into a standalone company.
"It's not clear to me that competition in the cereal category is going to change really that much at all depending on what Kellogg's does," Harmening said. "And in that sense, the most important thing for us to do is to stay on our game."