Yoghurt not cereals helps General Mills profits rise

Eurofood, July 6, 2000

US consumer foods giant General Mills has reported Q4 sales up 6% from US$1.6bn (2.03bn [European Dollar]) last year to US$1.69bn (1.8bn [European Dollar]), with profits up 3.9% from US$104.8m to US$108.8m. The poor performance of its cereals division was offset by healthy growth in Yoplait and Colombo yoghurt sales, which posted double-digit volume growth for the fourth year running. Its two overseas JVs also performed well, reporting favourable results for the first time. Snack Ventures Europe with compatriot drinks giant PepsiCo and Cereals Partners Worldwide with Swiss Nestle reported after-tax profits of US$2.2m (2.35m [European Dollar]) and US$3.3m (3.52m [European Dollar]) during fiscal 2000.

Analysts believe that General Mills has done well to diversify its businesses, whereby staving off the potential effects of slumps in the cereal market, as have probably been felt by companies specialising purely in cereals. "For years, General Mills wanted to be more like Kellogg," said John McMillin, an analyst at Prudential Securities, adding: I won't go so far as to say Kellogg now wants to be like General Mills, but it's funny how things change."