Gains From Grains

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I dreaded report cards in elementary school. In addition to letter grades for the major subjects, we were evaluated in subcategories such as "pays attention in class" and "plays well with others" using a four-level system -- "Outstanding," "Very Satisfactory," Satisfactory," and "Unsatisfactory." Anything below "Outstanding" was the kiss of death, since lower marks left me open to merciless teasing from my brothers.

As I look back, that rating system now seems somewhat arbitrary and my turmoil way overblown. Still, not all marks are so frivolous. It's not so easy, for example, to dismiss the importance of a new type of grading being proposed by General Mills (NYSE: GIS). According to The Associated Press, the food giant has asked that the Food and Drug Administration classify items containing at least 16 grams of whole grains as "excellent" sources of whole grains, and those foods with 8 to 15 grams of whole grains as merely "good" sources.

You have to hand it to General Mills. As luck would have it, some of the company's cereals, including Cheerios, Wheaties, and Total, meet the "excellent" threshold and already carry the "excellent source of whole grains" tag on their boxes. The company's cereal sales have been lackluster lately, but the U.S. Department of Agriculture's emphasis on the importance of whole grains in its revised Food Pyramid could be a boon to the firm. To its credit, General Mills has been on top of the whole-grain trend.

Unfortunately for the company, the matter is not yet set in stone. Bread makers such as Motley Fool Income Investor recommendation Sara Lee (NYSE: SLE) are fighting the system -- because of water content, bread is likely to be relegated to the "good" level at best. The distinction between "excellent" and "good" may seem to be a fine one, but in marketing it could make a huge difference. If General Mills is able to get its standards officially sanctioned, then its cereals could see a renaissance.

Fool contributor Brian Gorman is a freelance writer in Chicago. He does not own shares of any companies mentioned in this article.