Dive Brief:
- General Mills said its net income rose 10.4% in the fourth quarter, less than analysts had expected.
- The maker of Wheaties, Green Giant,Bisquick, Progresso,and numerous other food brands said sales fell 2.9% in the quarter.
- In response to the sales decline, the company said it would look to cut some $40 million in costs across its North American manufacturing and distribution operations.
Dive Insight:
General Mills' new cost-cutting initiative comes as the company is already involved in an effort to generate some $400 million in savings by better managing its margins.
Surely those are both good ideas. But it seems that General Mills is facing large, systemic problems. In particular, Americans appear to be losing their taste for cold cereals. And that could prove disastrous for General Mills and its competitors in the cereal aisle.
Rivals such asKellogg are looking for new ways to sell the breakfast staple. But it's unclear if that approach will work. So in the meantime, cost savings appear likely for General Mills.
