General Mills said it plans to keep its foot on the accelerator in yogurt, a business where the company has slowed its declines but now needs to increase sales.
Executives outlined new yogurt products at its investor day Tuesday that they hope — along with improvements in its snack bars and continued momentum in cereal — will get its largest business unit back to growth.
Jeff Harmening, the Golden Valley-based company's chief executive, told analysts at the New York Stock Exchange that its North America retail unit, which accounts for 59% of all its sales, is a key part of its fiscal 2020 plans.
General Mills aims to grow organic net sales, a measure of growth that excludes one-time benefits like acquisitions, by between 1% and 2% this year and improving yogurt is one of the main levers it needs to pull.
Piggybacking on its successful launch of Oui by Yoplait in 2017, General Mills is adding a crème dessert line to the brand. It's also launching a new yogurt product under the GoodBelly name, a Boulder, Colo.-based company whose brand General Mills licenses through its venture-capital arm, 301 Inc.
It also reformulated its YQ by Yoplait recipe, one year after launching it, and is updating its packaging to call-out the product's health attributes, such as a higher level of protein.
"With YQ," said Jon Nudi, president of North America retail, "we feel like we have something, we were just a bit off."
U.S. yogurt has been one of General Mills' most troubled businesses in recent years after it was late to the Greek yogurt craze, which now composes 45% of all U.S. yogurt sales. General Mills has slowed its own sales bleed, but the entire yogurt category is now experiencing slumping sales following several years of robust growth.
Total U.S. yogurt sales were down by 2% during the latest fiscal year, led by a 6% decline in Greek-style specifically.
As consumer interest in Greek yogurt wanes, General Mills is trying to catch whatever the next wave of consumer trends may be.
"The non-Greek segment grew low single digits in fiscal '19," Nudi said, referring to financial year that ended May 26. "We see this as an attractive opportunity, and [you] will see our plans position us to compete in this growing part of the category," Nudi added.
Last month, General Mills reported its first full-year market-share growth in yogurt since 2015.
At the investor event in New York, executives focused heavily on products the company will roll out over the coming quarters. General Mills gets nearly 5.5% of its net North America sales from new-product innovation, but the enthusiasm for those items rarely sticks.
"The reality is most innovation doesn't work," Nudi told the analysts. Only about 10% have staying power for at least three years, he said.
"In some cases, in the past, we might have brought something to market as a trend was leaving the market because it took two or three years to get there," Nudi said. "Now ... we are able to get from idea to market in less than a year, and as a result of that we think we are going to be at the front end of some of these trends."