General Mills at 2025 dbAccess Global Consumer Conference: Strategic Moves Amidst Challenges

On Thursday, 05 June 2025, General Mills (NYSE:GIS) presented at the 2025 dbAccess Global Consumer Conference, outlining its strategic initiatives amidst a challenging consumer landscape in the US and China. CEO Jeff Harmening emphasized the company’s "Accelerate" strategy aimed at driving organic growth through value, innovation, and strategic revenue management. While acknowledging pressures from rising consumer debt and low sentiment, General Mills is focusing on reinvesting in value and enhancing marketing efforts.

Key Takeaways

• General Mills is committed to organic growth, prioritizing value and innovation as part of its "Accelerate" strategy.
• Pricing adjustments and increased marketing for brands like Pillsbury and Totino’s have led to improved volume in key categories.
• The company is navigating consumer stress in the US and China, while European markets show more resilience.
• General Mills’ food service business is a strong performer, contributing to top-line revenue and profitability growth.
• Efforts to stabilize and grow the North American Pet segment focus on innovation and marketing enhancements.

Financial Results

General Mills reported improvements in pound volume across approximately 65% of its categories in the US during the fourth quarter. However, dollar sales were down 4%, a decline that was anticipated. The company plans to increase new product innovation by 30% and enhance marketing spending in fiscal year 2026 to drive future growth.

Operational Updates

The North American Retail segment saw a positive turnaround with strategic pricing adjustments and marketing investments. Pillsbury and Totino’s brands, specifically, benefitted from these efforts, including a high-profile Super Bowl advertisement for Totino’s.

In the North American Pet segment, General Mills has stabilized its market share and aims to accelerate growth through new product innovation and enhanced marketing. The recent acquisition of Tiki Cat is part of this strategy.

Future Outlook

For fiscal year 2026, General Mills plans to focus on organic growth, with key investments in value and innovation. The company anticipates continued improvements in pound volume and household penetration, supported by a transformation initiative aimed at saving an additional $100 million beyond the annual 5% productivity savings.

Q&A Highlights

During the conference call, CEO Jeff Harmening addressed the potential impact of tariffs, noting that most of the company’s products and raw materials are sourced from the US or North America. He also discussed the importance of engaging with food regulation to advocate for consistent federal standards, particularly concerning artificial colors.

For a detailed account of the conference call, readers are encouraged to refer to the full transcript below.

Full transcript - 2025 dbAccess Global Consumer Conference:

Unidentified speaker: Okay. Welcome, everybody. Thanks for joining us. For our next session, I’m thrilled to welcome back General Mills to the conference and equally thrilled to welcome back Jeff Harmening, chairman and chief executive officer. So, Jeff, thanks for being with us.

Jeff Harmening, chairman and chief executive officer, General Mills: Great to be here. Thank you.

Unidentified speaker: I’ll let you pour your water.

Jeff Harmening, chairman and chief executive officer, General Mills: Yeah. Pour my water here. Yeah. That’s right.

Unidentified speaker: I guess we’re gonna use the entirety of our time for q and a, so I’ll just I’ll just jump right in. And I’ll start, Jeff, with the way that I’ve started with a lot of a lot of teams here. It’s just obviously been a very eventful start to ’25. Lots of different crosscurrents and pressures on the on the consumer. So maybe just start there, talk about your assessment of consumer health broadly, and how those dynamics have impacted your category specifically.

Jeff Harmening, chairman and chief executive officer, General Mills: Yeah, sure. Thank you, and appreciate everyone being here in person and those listening online. I’ll start with The US. Yep. You know?

Maybe because 85% of our business is in is in The US, and then we can we can expand later on from from there. But, you know, it it it has been an eventful start to to our 2025 year. And in in The US, consumer sentiment is is really tough right now. The University of Michigan puts out a poll, you know, what they would say is that it’s the second lowest reading they’ve they’ve ever had. And the lowest reading was right after the pandemic began in 2020.

So so consumer sentiment is tough. The US consumer is stressed financially. They’re still buying, but they are they are stressed. You can see US consumer debt has has risen. And, you know, as a result, consumers are looking for value.

And and that’s not a that’s not exactly a shocker, I think. But, you I’ll give you some perspective on that. And it’s not all bad for us. I mean, 87% of eating occasions in The US are now at home rather than away from home, and that’s that’s a benefit to our category. So our categories are actually growing a little bit.

And consumers are looking for different places to shop, so they’re changing their habits about where they shop and how they shop and when they shop right after a paycheck, for example. So there are a lot of things that come into the play looking for value. But also, equally, I think it’s also important to remember that we can the consumer is stressed, value isn’t the only thing that they’re looking for. The US consumer is looking for more protein. They seemingly can’t get enough protein.

We talk about functional benefits, but that kinda starts with protein. Increasingly, The US consumer is looking for bold flavors. And, you know, no matter what the category, looking for bold flavors. And then also, because the environment is tough, and we see this in recessions kind of I’ve been doing this for thirty years. We unfortunately have seen a few of these that consumers really look for nostalgia as well.

They look they look for things that are gonna make them feel good. And so whether that is Pillsbury and the Doughboy, you know, which we’ve gotten back to growth, or whether that’s Lucky Charms, which is growing again, consumers are looking for things that remind them of something comfortable. And so those are some of the trends we see in consumer sentiment as they currently stand.

Unidentified speaker: Okay. What about so that was The US. What about what you’re seeing in Europe and China and elsewhere?

Jeff Harmening, chairman and chief executive officer, General Mills: Yeah. In Europe, the consumer sentiment is not quite as stressed as it is in The US right now. And as a result, we see our categories growing. And here in France, we’re seeing growth in the ice cream category, we’re growing share, and the same with Nature Valley. And as well, we see growth at Old El Paso.

So the consumer environment in Europe is not nearly as stressed as it is in The US right now, and we’re seeing more growth here. China, I would say, a sentiment not too dissimilar from The US. Consumers are pulling back. They feel the economic challenges. We’ve seen that in our Haagen Dazs shops.

Traffic is down double digits in our Haagen Dazs shops because people aren’t eating away from home as much, similar to The US. On the other hand, we do see growth in our retail business in Haagen Dazs in China. So China is a little bit stressed. We’re seeing growth in Brazil. So the Brazilian economy is doing pretty well.

We see growth in Brazil, and we’re doing we’re doing quite a bit better in Brazil. So a little bit of a trip around the world. But I would say that for us, China and The US are kind of the two places where we see most consumer stress. Yeah.

Unidentified speaker: I will tell you that Haagen Dazs ice cream is up here at the conference year over year.

Jeff Harmening, chairman and chief executive officer, General Mills: So It’s up here at the conference. That’s good. We have we aim to please. Yeah. And pleased to hear that the sea salt caramel is my favorite.

Our investor relations said Jeff Seaman likes the cookies and cream, but I think you can’t go wrong really with either one.

Unidentified speaker: Well, we thank you for both.

Jeff Harmening, chairman and chief executive officer, General Mills: Yes.

Unidentified speaker: We step back, you know, we’ll talk about some of the things you’re doing in the moment in a second. But just, I guess, how do you feel that your broader accelerate strategy has equipped the company to navigate and identify course corrections through this volatile time?

Jeff Harmening, chairman and chief executive officer, General Mills: Yeah. We I appreciate that. We set our Accelerate strategy. I mean, timing is everything. And we set it about two weeks before we sent people home for the pandemic in 02/2020.

Having said that, you know, the the strategy itself has really stood the test of time. And we’ve reshaped our portfolio 30%, you know, over the last seven years, both through acquisitions, a lot of that in pet food, a little bit in food service, and through divestitures. And we we just, you know, got regulatory approval to divest yogurt in The US just this last week. And so, you know, kind of from where we play, our accelerated strategy really has stood the test of time. And over the last five year period, we’ve we’ve outperformed our long term algorithm on sales growth and on on profitability growth.

And, of course, there have been swings up and down during that period, but but that has served us well. In addition to that, we’ve taken this time over the last five years to really invest in in leveraging our scale, particularly in data and technology. And we spent a lot of time developing the foundation for data and technology, and that has allowed us to accelerate significantly our investment in things like strategic revenue management management and e commerce and more recently in our supply chain digitization, which has allowed us to go from our productivity savings from average of 4% a year over the last decade to now 5%. So some real tangible benefits, and we think it’s gonna continue to pay dividends into the future as we change how we do marketing content, the way we create value. And so we’re really pleased with the investments we’ve made in our infrastructure in addition to a lot of the portfolio shaping that we have done.

Unidentified speaker: Good. Okay. So if we go into the here and now in terms of what you’re doing more tactically to address some of the pressures you talked about, we’ll start with North American retail, you know, where you’re adding a lot of incremental investment. I think there’s some perceptions it’s just price. I know it’s not, so you can you can kinda help us with that.

You know, so a lot of lot of investment there. Can you just, I guess, give us your scorecard on the effectiveness of that spending so far, the progress you’ve made, and your expectations for further returns as we go forward?

Jeff Harmening, chairman and chief executive officer, General Mills: Alright. That’s a lot of good questions right in a row. I’ll try to answer all those. And if I miss one, come back because I’m not I’m not trying to dodge it. But, you know, I said, look.

For the the the first question is, like, what are we trying to accomplish? And when what we are trying to accomplish is getting back to organic growth, That is the most important thing that we can do because if you’re not doing that, then you’re just spending money. You’re actually not investing. You’re just spending money. And so then the question becomes, okay, if that’s your objective, how do you what are the levers that you pull in order to achieve that objective?

And, of course, they differ by category. We compete in 25 categories in The US alone, and so we’ve developed what we call a remarkable experience framework. And that framework’s really important because it allows us to understand where we put that investment. And so it could be in value. It could be in packaging.

It could be in advertising, in omnichannel availability. So we’re a very disciplined approach to how we approach this. And where we invest actually differs quite a bit by category. And right now in The US, with a lot of value seeking behavior, we are putting a lot of investment back into value, but value is the only starting point. And we started doing this really kind of in January.

And because we have a very good Pillsbury business, we came into our fiscal year in ’twenty five knowing that our advertising was really good. We had really good new product, good product news. But about four or five months into the year, it wasn’t working the way we thought it would work. And so when we took a look at the using this experience framework, we took a look at why that was, and the value equation just wasn’t right for consumers on where they were. And so as a result, we changed our pricing on Pillsbury kinda throughout the category.

We maintained the marketing investment. Mhmm. We maintained the innovation investment, and so we saw that business return to growth. And and and so we’re we’re able to not only do we have this framework in place, a remarkability Framework, but we also have the mechanisms to to understand our marketing mix. So we can make the end we can we can diagnose the problem.

We’re able to look at, okay, how is that investment working and then understand what changes we need to make? And so we modeled out the changes we saw, we thought we would saw in Pillsbury, and it performed almost exactly as we had predicted. And so we applied then what we learned in Pillsbury to our Totino’s business. And we changed the pricing there, but we also added marketing spend. We had a Super Bowl ad for the first time in a decade, and it was the most viewed socially of any Super Bowl ad.

And so we increased the marketing. We changed the pricing, and we saw the results we expected on Totino’s. And so then we looked across our portfolio and said, what do we need to do? And so kind of category by category, we analyzed what needed to take place. So we’ve made investments across many categories.

And what I am pleased to be able to say is that we said in the third quarter during our earnings call that we would improve several businesses in the fourth quarter. And if you just look at Nielsen data in the fourth quarter, what you would find is that we improved our pound volume at about 65% of our categories in The US. Our pounds were down 3% in the first half of the year. They’re down 2% in the third quarter, and now they were only down 1% in the fourth quarter. Dollars have lagged that.

Unidentified speaker: Yep.

Jeff Harmening, chairman and chief executive officer, General Mills: So our dollars in our US business are down 4%, but we expected that. In fact, we modeled that. Yep. And so we feel very good about all the investments we’re doing in our value equation are getting that right. And so as we look ahead, now the job to do is to make sure we continue those investments into our fiscal twenty six, but then I add on top of that more new product innovation.

In fact, we have about 30% more new product innovation in fiscal ’twenty six than we had in fiscal ’twenty five. We’re not launching 30% more new products. We actually have some better products across a lot of our lines. We’ve launched a couple of those things in our fourth quarter already. So Cheerios Protein, for example.

I told you consumers want more protein. Cheerios Protein is off to a great start. We’ve launched something called Pitmaster Soup for Progresso. It’s also 20 grams of protein, off to a great start. You mentioned the Haagen Dazs stick bars we’re sampling here at the conference, but we have reformulated those.

In Europe, they’re off to a great start, and we have local manufacturing in China now, and our Haagen Dazs stick bar business in China is off to a great start. And so what we see you know, getting the value right is really important, but it’s not the only thing to do. Then we have to add the marketing on top of that. I will tell you for fiscal twenty six, without giving guidance, that marketing spending will be up in ’26 behind the new innovation. So this combination of getting the value right, then adding more new product innovation and renovation news in our core along with increased marketing spend, that is a formula for getting our organic sales back to growth.

Unidentified speaker: Got it. And without giving guidance, since ’26, what’s the a timeline for the to getting the the portfolio as a whole back to pound volume parity with the with the categories? And then ultimately, you know, if the innovation, the marketing is successful, you start to outpace compound volume and hopefully add some remarkably based premiumization to the to the mix. What’s the the path to get to that kind of more hopefully algorithmic cadence?

Jeff Harmening, chairman and chief executive officer, General Mills: Yeah. So the the the the path to getting back to pound growth really has started in our fourth quarter. Mhmm. And, you know, as I said, we we thought in q we we thought in q three coming out of q three that our that our volume would improve in in q four, and it has in many of the categories in which we made investments. And so we thought cereal category pound volume would improve.

In fact, we grew pound share in the the fourth quarter, the same with Pillsbury, the same with Totino’s, the same with Progresso Soup, the same with fruit snacks. So all the places we invested, we saw this pound growth. And so as we look, go into this next fiscal year, through the first half of the year, we would expect that our pounds would continue to improve.

Unidentified speaker: K.

Jeff Harmening, chairman and chief executive officer, General Mills: And that but that our dollars our dollars and particularly dollar share would lag our pounds as it has in the fourth quarter because that’s the time in which we will be lapping the pricing from a year ago. And so but as we do that, as we do that, importantly, we’ll be in the first half of the year, we’ll be launching a lot of new product innovation, which we’ll talk about in three weeks Mhmm. At at our at our q four earnings call. And so so we would expect the business in the back half of next fiscal year to not only start to gain pound share, but also also dollar share and dollar get back to dollar growth after that. Great.

Unidentified speaker: Maybe a similar status update on improvement plans for North American Pet.

Jeff Harmening, chairman and chief executive officer, General Mills: Yeah. Well, you drink. Sorry.

Unidentified speaker: That’s a short question after a long

Jeff Harmening, chairman and chief executive officer, General Mills: No. First of all, you know, we’ve been really we’ve been really pleased over the last seven years with our pet food acquisition of Blue Buffalo and the the subsequent acquisitions we have made. And over that time, you know, we’ve done quite well from a share perspective behind the humanization trend. Importantly, that humanization trend is going to continue. It’s a trend it’s a twenty year trend, so I’m not exactly Nostradamus for predicting the humanization trend is going to continue.

And it’s also a global trend. It’s not just a US trend. People all over the world wanna feed their pets like they feed themselves, like they feed the rest of their families. And the so that will continue. What I’m pleased with this last year is we provide we use the same Remarkability experience framework in pet as we do for the rest of our business.

And so looking at that business, we saw there there wasn’t as much value work to do. In fact, we needed to improve our advertising on life protection formula, which we did, and we saw that business get back to growth. We needed to improve the advertising on our cat business, our tastefuls business, and now that’s growing at 5%. We didn’t change the value of that at all. All we did was change the advertising.

There are a couple more businesses in pet that have been more challenging for us. Our wilderness business, we probably changed about every lever on the remarkable experience framework. And while it is not back to growth yet, we have continued to see sequential improvement in that business. In fact, in many channels, it’s actually growing. And the same would be true of our treats business, which is code for snacking when it comes to pets.

And so in our treats business, it’s not all the way back to growth, but we have stemmed the declines. And so as a result, in our fiscal year that just ended, our fiscal ’twenty five, we have stabilized our share position. Now that now that now that and and probably eke out a little bit of growth for the year on our top line sales. And so now the job to do is accelerate that growth. And we’ll talk again more about how we’re gonna do that in this coming year, but I can tell you it will primarily be through new product innovation.

We’ve got a great lineup of new products in our pet food business and including our new Tiki Cat acquisition, which is, you know, which is growing double digits and and even better marketing. So so, anyway, we’ve stabilized pet. We’re we’re pleased that we’re back to at least maintaining share. Now the job to do is accelerate growth, and we’re confident we can do that. Great.

Unidentified speaker: And then, I guess, if we pivot over to food service, because this is the business that I don’t think we talk about enough. It’s been a relative bright spot for the company. So maybe talk about the just to cut maybe levels of the company’s position there and then your ambitions in building a bigger presence in some of your end markets.

Jeff Harmening, chairman and chief executive officer, General Mills: Yeah. I love to talk about our food service business. I mean, for we have a good food service business, and it’s it’s growing. So I I love to talk about it. I love to talk about that.

I mean, through the first for perspective, for those listening who don’t look at our foodservice business every day, through the first three quarters, the top line was growing 3%, and the profitability was up 15%. So it’s a really good business for us, and it’s got good margins. And the reason why it’s a good business for us and good margins, I think, starts with the fact that we have some r and d capabilities that are that are competitive advantage for us, especially when it especially when it comes to to reformulating for regulatory changes and reformulating when it when it comes to our baking business. We have competitive r and d. We also have our own sales organization, which most which most are which most food service companies don’t have.

What this allows us to do is solve operator problems. And so our direct sales force helps us understand what those operator problems are and with combine that with our R and D capabilities, helps us solve those things. And so we have some we have some capabilities that are advantaged. I’ll give you a couple examples of where that plays out. So in food service, we have a really good business in our k through 12, kindergarten through twelfth grade school business.

And our cereal business in that channel is more than double our share. That the share there is more than double what it is in US retail because we’ve been able to reformulate products over time, say, colors or sugar reductions or sodium reductions that other people simply can’t do. So we have really good shares there. The other thing about our food service business that’s a little bit different from others in addition to our competitive advantage capabilities in this current period is important. About 60% of our food service business is in what we call noncommercial channels.

So these are think of nonrestaurants. Kindergarten through twelfth grade schools, universities, hospitalities. Those channels are actually growing. So the restaurant traffic has struggled as it has become more expensive. And as but we have actually been growing through these noncommercial channels.

Again, because we’ve got great capabilities, we’re helping solving operator challenges, which are generally labor related. Mhmm. And if they’re not labor related, then they are nutrition related. And those are two things we’re really good at doing.

Unidentified speaker: Can you talk about the level of investment you’re putting behind food service? Is is it natural growth, or are you leaning in and trying to accelerate it further?

Jeff Harmening, chairman and chief executive officer, General Mills: We’ve been accelerating our growth in food service. So we we love to invest in our food service business because, again, it’s got it’s got a great margin structure to it. We have competitive advantages. We’ve made an acquisition in food service to help accelerate that growth. And so we don’t we don’t spend in advertising in food service the way we do for the rest of our business, but we’re investing in our capabilities in food service and have over time, and so that has paid dividends.

I will also say the investments we make in our branded business also flow over to food service. And so the extent that we create more remarkable experiences for consumers on our branded products, a lot of our sales in our food service business are also branded. And so when Lucky Charms is growing or doing the right thing in retail, the same things tends to happen in our food service outlets. Okay.

Unidentified speaker: You we we were talking we both used the word remarkability earlier, talked about your remarkability framework, but didn’t really define it. Maybe spend a minute on exactly kind of what what that looks like so people have a a common understanding. Then I guess the the the real question is sort of, you know, where do you think the the company got out of out of out of balance on remarkabilities? Or conversely, what other brands were doing better than you and then and then how that’s led to some of the course corrections you’ve made.

Jeff Harmening, chairman and chief executive officer, General Mills: Yeah. So the the Remarkability Experience Framework is really just a a disciplined and consistent framework that our marketers use to to diagnose challenges our business face, but also where we’re doing really well. And that’s important because then we speak the same language across the company. And that framework I mean, we’ve always been good brand builders. General Mills for for one hundred and sixty years, General Mills have been great at building brands.

This just gives us a disciplined framework to evaluate what we’re doing. And so what we do is we we measure the remarkably of our products against our biggest competition. In some cases, that’s another big branded manufacturer. In some cases, it’s against private label, and some may be a smaller manufacturer. And we look across several dimensions.

One of those is value. We look at packaging. We look at communications. We look at omnichannel presence. So we look across all these different vectors.

We kind of rate ourselves, are we better than the competition, the same, or worse? And so not surprisingly, where we find that we are worse, we want to make it better. And where we find we have advantages, we like to double down. And so use that’s why we use this framework. It’s important because when you have 25 categories, the challenge may be different on Pillsbury than it is on Blue Buffalo, than it is on Totino’s, than it is on Cheerios.

And so that’s the way we use this framework. One of the things we found that was pretty consistent was that our value equation was out of line with what consumers’ expectations were. And I’m not sure that we did anything wrong necessarily. It’s just the context changed over time. I mean, for a few years, we had been battling, we battled a global pandemic, record inflation, supply chain disruptions, and so most of our energy went into all that.

At a time when most of our competitor when many of our competitors, especially private label, didn’t have the shelf presence we did because our supply chain held up better. That was a great competitive advantage for us for about three or four years. Well, now the supply chains have stabilized quite a bit more. We’ll see what happens in the future, but they have stabilized a lot more as looks right now. So, you know, the premium we were to a lot of our competitors, gap had increased.

And so what we’re doing right now, when we talk about, you know, adding value and making investments back in in value, we’re really getting back to historical price differences between competition, which had gotten out of line. And so the context has changed. Yep. And, you know, we’re we’re changing with it. So it’s it’s no longer good enough just to be better at at, you know, pricing and supply chain and and availability.

You really need to be better across all the vectors of your marketing mix.

Unidentified speaker: Okay. I guess if we take a a step to the side and talk about, I guess, potentially how that impacts your views on portfolio construction. In pet, we’ve seen the company add Edgar and Cooper, Whitebridge to help, you know, to help bolster beyond Blue Buffalo. But we’ve seen more divestments of late in North American retail, including yogurt as you referenced. I guess looking ahead, how do you see that evolving?

Do you see yourself more explicitly priority prioritizing additions in North American retail?

Jeff Harmening, chairman and chief executive officer, General Mills: Yeah. So I’ll I’ll be glad to talk about our portfolio shaping because we’ve we’ve been successful at us. You always like to talk about things you’ve been successful at. With with the caveat that the most important thing we have to do the next year, in fact, priorities one, two, and three, are getting back to organic growth. Yep.

And so I only say that in that you can’t really portfolio shape your way to success if your core is not growing. So our number one priority over the next twelve months really organic growth. Having said that, we haven’t changed our strategy when it comes to M and A. It’s been successful, and we think it will be successful. The combination of making acquisitions over time in areas that are growing, where we think we have the capabilities necessary to win, those are places where we’ll continue to look for acquisitions.

We’ve made divestitures. Yes. We just divested we just divested, in process of investing, yogurt here in The US and Hamburger Helper, but we also divested yogurt in France. I’ll talk about that in a minute. K.

And so we have made some divestments outside The US. And so we’ll also look to divest businesses where we think that it’s not prudent for us to invest, all with a mind to create shareholder value. So I want you to know our capital allocation strategy and our M and A strategy really hasn’t changed because we’ve been successful in what we have done. One of the things we found and and here in France so we’re in France right now. One here in France is that when we divested our yoga business in Europe, it was a business that was lower growth for us, higher capital costs, lower margins.

It wasn’t a business that we were particularly well situated to create competitive advantage, so we divested that. And so that improved the profitability of our European business. But I think as importantly, what it allowed us to do was focus on the business that were the most important to us, In this case, Haagen Dazs and Nature Valley and Old El Paso. I do not think that is it a coincidence that for the last three years, we have actually grown all three of those businesses in France. And in fact, Nature Valley has a higher market share in France than it does anywhere else in the world, and I think grew at 43% here in France last year.

We’re gaining share in Haagen Dazs. We’re growing Old El Paso. And so it’s hard to put in a spreadsheet when you make a divestiture. People always say, like, what’s the dilutive effect or whatever or the growth impact of that divestiture you make? You can quantify that.

But what’s harder to quantify but yet still real is that it allows you to focus back on the things that matter most to you. Yes. And we saw that in we saw that in Europe. And it gets talked about in theory. I’ve heard about the theory.

I’ve never seen it in practice. Now I’ve experienced it. And I will tell you that’s one of the things we’re really pleased with what we’ve in Europe. And we also think it’ll happen with our US business that by divesting yogurt, which has been a good business for us for a long time, but one we weren’t gonna make the investments in, it allows us to invest in things that are gonna be more important to us Yep. And focus on the things that are more important to us.

Okay.

Unidentified speaker: You know, acknowledging the focus is on organic growth, % clear. In some ways, the you mentioned small brands kinda on the rebound post pandemic related disruption. Arguably, the conditions that are kinda returning are are more similar to the conditions that existed, you know, ten years ago that led to brands like Annie’s, you know, come to the fore, which then was a was a point was a successful acquisition for you guys. Do you see that market market construction maybe taking shape such that the the opportunities to be more offensive from M and A may come to be over the next few years?

Jeff Harmening, chairman and chief executive officer, General Mills: Yeah. So, yeah, and by the way, I’m glad you mentioned it, Andy. It has been successful. By the way, it’s growing really well right now. It was a $200,000,000 business when we acquired it, and we doubled it.

So it’s now a $400,000,000 business for us and really, really still nicely growing and profitable. When you look at the current environment, there has been a lot of small brand growth. A lot of that growth, not all of it, but a lot of that growth has been on the back of kind of getting back on the shelf because there was a period of time when, frankly, the small company supply chains and private label supply chains didn’t hold up as well as ours did. And a lot of our retail customers were focusing on ecommerce sales, particularly as people weren’t going to the stores as much. And so didn’t want small brands that weren’t turning kind of in the way of their broader e commerce objective.

So a lot of the growth we’ve seen in small brands over the past period of time has really been related to getting just getting back on the shelf. And so as we but there have been other brands where they provided real and meaningful benefits to consumers that are important for us to make sure we reflect in our brands. And so it’s a combination of getting back on the shelf and some real benefits. And so as we look to what consumers wanna do in the future, we have a choice to make. Are we going to are we going to launch ourselves into into benefits that consumers are looking for?

Are we gonna acquire, or are we gonna do both? And I think the answer is we’ll be very willing to do both. As you said, with regard to Annie’s, we made an acquisition. Yep. With Tiki Cat, we made an acquisition.

By the way, in Tiki Cat, it’s growing, but so is Blue Buffalo’s cat business. And so it’s kind of an and. And so as we looked at the cereal category, there have been brands like Magic Spoon has been growing for six years in low sugar and high protein. Well, we launched Cheerios Protein six months ago. It’s already bigger than Magic Spoon.

So in that case, we decided not to make an acquisition. We decided we could do something organically, the same with soup. But as we look across the landscape, we do have an always on M and A capability. And to the extent that we think it’s more attractive for us to buy into a business rather than build on our own, we’re certainly capable of not only buying it but also making it work, which is the ultimate which is the ultimate goal on what creates the share of value.

Unidentified speaker: Okay. We talked about yogurt, which the other piece of news recently was that you you released information about a transformation initiative that will include a hundred and $30,000,000 in charges going forward. Maybe just a little bit more color on that initiative and what it means to the company and what kind of savings you expect to be generated from those charges that you disclosed.

Jeff Harmening, chairman and chief executive officer, General Mills: All right. I have very willing to talk about that. I’m going to sound a little bit like a broken record, but there’s a theme here. And I’m not I’m not that subtle, so I mean the and the the most important thing about that restructuring is that it’s in service to organic growth. Mhmm.

That’s that’s the most important thing to to take out of this discussion. What we announced on the restructuring is something that we talked about really on our q three earnings call, which on our q three earnings call, we said we’re we plan to save an additional hundred million dollars in the coming year in addition to what we do on every year. So we generate productivity of 5% every year. We said we’d save another hundred million dollars in the coming year. This restructuring announcement is kind of the official announcement of what we talked about on our Q3 earnings call.

And the the question then is, okay, how how exactly then is that in service to organic growth? And, really, there there are two ways. First, I mean, growth is not free. I mean, we talked about the investments that we’re making. And so we have to pay for those investments.

And one of the ways is through our program, but the other is gonna be through this restructuring that we are doing. The the other is that the in this transformation, we wanna make sure that not only we saving money, but we come out of this a better company than we started. And and one of the things that we know we need to continue to do is free up time for our people and become more agile at And so through the use of technology or putting the right work in the right place, we’re actually transforming how we do a lot of our processes. And with an eye toward using our data and technology, which I talked about earlier as a competitive advantage to make our processes more streamlined and easy and free up other people’s time to do what they do best.

And so this this this it really is a transformational restructuring, and it will help us with organic growth not only in the short term fuel that it provides, but also making us more efficient and agile in the way we go about our work.

Unidentified speaker: Very good. Okay. Tariffs have been a big topic.

Jeff Harmening, chairman and chief executive officer, General Mills: I’ve heard of those.

Unidentified speaker: Yes. Yes. You know, including the backdrop is is changing, you know, frequently. How does I mean, how did tariffs as we know them today, but also but more more generally, just the the the dynamic tariff backdrop influence your business planning as you go into 2026?

Jeff Harmening, chairman and chief executive officer, General Mills: Yeah. Well, we spent a lot of time on it. Mhmm. And it’s not clear to me that we’re a steady state

Unidentified speaker: Right.

Jeff Harmening, chairman and chief executive officer, General Mills: Yet when it comes to to tariffs. And I’ll tell you how we think about it, and we’ll give some more information in three weeks on our earnings call. And I suspect we’ll give even more information after that. Yep. Probably right.

The you know, with regard with regard to tariffs, I mean, a couple couple of important pieces of context for us to probably keep in mind. The first is that we’re we’re largely a North American company.

Unidentified speaker: Mhmm.

Jeff Harmening, chairman and chief executive officer, General Mills: And about 97%, approximately, 97% of the of the products that we sell in The US are made in The US. And so we’re not shipping a lot of finished product from someplace else into The US, which kind of limits our exposure. Also, about 80%, between 8590% of the goods, the raw materials that we use in The US are actually sourced from The US or somewhere in North America. And so, you know, again, that kinda, that has some limitations on our liability. But then there’s another 15% that we source, either we source from outside The US or our suppliers source from outside The US.

An example of that would be cocoa. I mean, don’t use the same amount of cocoa as chocolate companies, but I mean, we have an embedded cracker product. So cocoa would be an example. We can’t get it in The US. We’re not going to get it in The US.

I mean, it’s going to be there. Steel and aluminum, that would be another piece. We use steel and aluminum for Progresso soup cans and for Blue Buffalo dog food. So a couple of things that we’re going to use those materials. To the extent there’s a 25% or 50% tariff or 14% or whatever it ends up being, we can’t mitigate against that.

And so what we think about, we think about tariffs really as an add to short term inflation. That’s really what it is. And so I believe that it is manageable. The the risk is not nothing. Yep.

The risk is ever changing. There are a lot there’s a lot of things that we can mitigate, and we have. There are a few things that we can’t, and then our then the question is only, do we have enough productivity to cover those costs, or do we do we need exact pricing in some other form at some time?

Unidentified speaker: Great. Very clear. You know, another evergreen topic of late is the evolving food regulation, government oversight, mostly in The US. You know, I guess, what is General Mills’ take on the direction of discourse and government action in The US? What impacts do you see potentially having either on your portfolio’s growth or just the cost to operate over the next several years?

Jeff Harmening, chairman and chief executive officer, General Mills: I’ve heard of this topic too. So the, you know, the first thing, we’re we’re we and I have been really engaged at a at a federal level with people talking with the groups, especially the head of health and human services, RFK Jr, talking about what it is that we can do collectively. So we really have had a constructive dialogue at a national level. And the primary topic of conversation among food regulation really is about colors. Yep.

Artificial colors or certified colors. That’s been the main topic, and there are about four or five that, you know, kind of in the national the national topic. And so because of that, I mean, we’re actually pretty well positioned because only about 15 of our products in The US actually have these artificial or certified colors. Yep. And in our food service business, we’ve been working through these kind of issues for literally decades.

And every time the regulation changes, we come out competitively advantaged because we have R and D capabilities that other people can’t match. We have our own we have a thousand scientists in Minneapolis alone working on things just like this. And smaller companies, know, they may have to outsource it. And so I want you to know, I think there’s probably a net opportunity for General Mills over the long term. It’s not the easiest to reformulate.

So it takes time. It takes a little bit of money, but mostly it takes time as we try to get texture right and color right and moisture transfer right and all of those things. But I want you to know, but it’s important that we have the most important thing when it comes to food regulation is that we have something at the federal level. Now what really does not work for consumers or for manufacturers like us or anybody is state by state regulation because, as you can imagine, creates consumer confusion. If something’s safe in Texas but it’s not allowed in Maine or something different in Minnesota or California, like, how does that work?

Right. The answer is it doesn’t because consumers just get confused. It also drives up cost. You can imagine trying to have to formulate, you know, 50 different times. That that just won’t work, and I’m pretty sure American consumers don’t want their cost of food going up.

Yeah. And so what we’re working with the administration on is how can we create a framework so that we can have a consistent standard? Even if it’s even if it’s not something that we all love, even if it’s something we like, but a consistent federal standard is really, really important. So that’s what we’re that’s what

Unidentified speaker: we’re working with the administration on. Great. In the couple of minutes we have left, you know, you know, fiscal twenty five is officially behind us. Yes. And we’re narrowing in, as you mentioned, on fourth quarter reporting.

You know, I guess, acknowledging we’re gonna have to wait a couple weeks for official fiscal twenty six guidance. As we stand here today, what are some of the key building blocks that investors should keep of mind as they consider the dynamics heading into next year, both in terms of financial puts and takes as well as strategic objects objectives?

Jeff Harmening, chairman and chief executive officer, General Mills: Well, you know, we always start with the objective, which I’ve talked about already, but really is getting back to our organic growth. That that’s the most important task we have at hand. We’ll be making a lot of investments to do that. We talk about some of that in value, which will carry over from the fourth quarter through the first, you know, for the first half of our next fiscal year, maybe some, in some cases, the first three quarters of our fiscal year. But the investments aren’t only in price.

The or value. The the investments are gonna be in increased marketing spending. And we’ve got great innovation, but it only innovation only works if people know about And so, you know, when you have really good innovation, you wanna make sure that you talk about that. So we’ll be making significant investments in innovation and making consumers understand that that innovation is coming to market. And so we will we will be making those investments.

We talked a little bit already. We have you know, we’re really good at productivity, which we call And so we have 5% next year, which is and we, by the way, we we know going into a fiscal year what the what the answer is gonna And so I can tell you with a high degree of confidence that we’ll generate 5% of productivity next year because we’ve already identified what all these projects are. We we will also have we will also have savings from this transformation initiative, which we talked about. There will be inflation. Yep.

We’ll talk exactly about what that is in three weeks, but it’s not extraordinary inflation. Yep. Tariffs aside, it’s not extraordinary it’s not extraordinary inflation. So that’s on the other side in addition to the brand investments. We also have a fifty third week.

Yep. The famed fifty third week, and we have that every five or six years. We’re gonna reinvest all of all of what we have in that fifty third week back into back into brand building and back into driving organic growth. And then we have the Yoplait divestiture Right. Which we, you know, which we we if we have clearance for, we think it’ll close by the June.

So pretty much a whole year of that divestiture and the dilution on earnings and EPS that comes with that. Those are kind of the I mean, I think we’re pretty those are the those are the big those are building blocks. Yeah. And so but we feel, you know, we feel good about the investments we’re gonna make, and it won’t happen you know, getting back to growth won’t happen overnight, but we’re encouraged. We’re encouraged by what we see in the fourth quarter even if, if you read in Nielsen data, the sales are dollar sales are not as robust as we would like.

When you look underlying that The pound volume. The pound volume and the household penetration that comes with that, we see quite a bit of green shoots. And importantly, the investments that we have made have worked as we thought that we have we thought they would. And so as we go into next year, we’re confident that as we continue to make investments, whether it’s in value or innovation or brand building, we are confident that they will work the way that we think they will.

Unidentified speaker: Great. Well, with that, we’re out of time. In one year, I look forward to hearing all of the returns on the investments you’re making and talk about all the growth that lies ahead in fiscal

Jeff Harmening, chairman and chief executive officer, General Mills: twenty forward to telling you about it. Alright. Thanks.

Unidentified speaker: Fantastic. Alright. Thanks, everybody. Thanks, Jeff.

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