Cereal: General Mills

JULIE GALLAGHER

CEREAL SALES have increased $1 billion over the past four years thanks in part to General Mills. Net sales for Big G cereals grew 4% in the first quarter, building on year-earlier sales, up 9%.

Recent growth reflects an increase in sales from established brands like Multigrain Cheerios, Fiber One and Cinnamon Toast Crunch. But brand extensions are also giving sales an early-morning boost.

Chocolate Cheerios is on track to deliver between $65 million and $70 million in revenue during its first year. While the first cereal created especially for men: Wheaties Fuel, is also flexing its muscle, according to spokeswoman Maerenn Jepsen.

General Mills is supporting these and other cereal brands in a number of ways.

Members of its National Retail Organization work directly with retailers to ensure they have the right selection on shelves and products on display. Insights extend beyond the cereal aisle.

“General Mills partnered with retailers over the past year to help them implement strategies to capture growth in the cereal category by providing thought leadership around the store, aisle and category,” Jepsen said.

Consumers are eating breakfast more often, and although cereal is the most common breakfast item it's only eaten during one in three breakfast occasions.

To help capture some of the other two-thirds General Mills has adopted an aggressive marketing strategy.

In 2010, its total media investment crossed the $900 million mark, making it one of the largest advertisers in the industry.

Although a large portion is allocated toward television, funds earmarked for new media are also on the rise.

“We're sending coupons to consumers on their smart phones,” said Jepsen.

Media geared to the growing number of multicultural consumers is another focus.

Instead of passing the cost of these investments on to retailers, funds are made available through General Mills' Holistic Margin Management model.

“We have hundreds of initiatives underway to drive value by focusing on things that matter to our consumers and reducing waste across our operation,” said Jepsen. “This savings allows us to keep our brands affordable for consumers, and invest in brand building and innovation.”

HMM savings are targeted at $1 billion over the next three years, and $4 billion over the next 10 years.

COMPANY TO WATCH

KELLOGG: The Healthy Weight Commitment Foundation isn't the only extra-curricular activity that the Kellogg Co. is dedicating significant time and effort to. Now it's also taking part in a new collaborative effort involving the Food Marketing Institute and its members, a handful of manufacturers and others who will demonstrate the significance of Center Store sales to total store performance. Nestlé Purina PetCare Co., Kimberly-Clark, Anheuser-Busch, Campbell Soup Co., the Nielsen Co., Willard Bishop and Accenture are members of a task force that will study shopper attitudes toward the role of Center Store and test new merchandising treatments, layouts and approaches. The group will also demonstrate for retailers and wholesalers how the sales and profits of Center Store can increase grocery trips.