General Mills (NYSE:GIS) gave a significant nod to prevalent healthy eating trends today, stating that all of its cereals will be now made with whole grain. That includes cereals that traditionally were perceived as a bit more fun than healthy, like Lucky Charms, Cocoa Puffs, and Trix.
Other General Mills cereals that might be in your cupboard right now include Wheaties, Rice Chex, Golden Grahams, and Cheerios, all of which will include the new whole-grain tag. (One might also wonder how General Mill's newish product, Total Protein Cereal, fared with consumers.)
With the growing attention to American obesity rates and a lot of media buzz about healthier eating, General Mills' move makes sense. The company's press release pumped whole grains' health benefits, including antioxidant content, and pointed out the fact that most Americans don't consume nearly enough whole grains.
According to government entities like the Centers for Disease Control and Prevention, 64% of American adults are overweight or obese. As for children, the essential market for cereals like Lucky Charms and Trix, 15% of those age six to 19 are considered overweight.
So, General Mills' move is not a surprising one, especially considering that the company hinted at coming innovation in cereal in its last earnings conference call. Strategizing is indeed due, as it's faced a few stumbling blocks this year, some of which were blamed on healthier eating and low-carb diet trends. General Mills' profits fell 19% in the last quarter, which the company blamed on higher costs due to food ingredient prices and promotional spending.
Investors might want to keep their eyes on archrival Kellogg (NYSE:K), home of Tony the Tiger, Snap, Crackle, and Pop, Toucan Sam, and other iconic favorites in the cereal aisle. (And of course, there is always Kraft (NYSE:KFT) and its recent woes to contemplate, as well as its own stab at addressing dietary trends.)
General Mills definitely needs to keep on its toes, especially in these days of health-conscious shoppers and whole-foods emphasis. This move is a signal that all of the companies that make processed foods need to be nimble right now. Of course, while General Mills' move may be in good taste, its cereal line is major, and success relies on the actual taste being just as good.
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Alyce Lomax does not own shares of any of the companies mentioned. She doesn't break for breakfast.
