Diversified packaged food company General Mills (GIS 0.49%) is probably most famous for its cereals. Indeed, General Mills' brands include its very popular cereal products Cheerios and Wheaties. But General Mills is a highly diversified company, with brands across several other categories. Just a few of these include Yoplait yogurt, Green Giant vegetables, and Betty Crocker.

General Mills is still looking to add to its portfolio, partly because its current brands aren't producing much growth. Investors can still count on General Mills for its reliable dividends. In fact, General Mills and its predecessor companies have paid uninterrupted dividends for 115 years. And General Mills raises its dividend on an annual basis.

But the company needs to do more to produce higher growth going forward after a disappointing fiscal 2014. Here's a rundown of what General Mills' investors need to know.

General Mills' growth comes up short
As mentioned, General Mills had a fairly unimpressive fiscal year. Net sales grew just 1% year over year, to $17.9 billion. Adjusted profits, which strip out one-time items like restructuring costs, integration costs from acquisitions, and gains on divestitures, increased 4%, to $2.82 per share. Fiscal 2015 hasn't gotten off to a good start, either. Sales and adjusted profits fell 1% and 13%, respectively, in the first quarter YOY.

Management expects a better year in fiscal 2015 overall versus the prior year. Full-year estimates call for mid-single digit sales growth and high single-digit earnings growth. Organic growth is going to be hard to come by, given the company's sluggish volumes. That's why General Mills is turning to acquisition to fuel growth.

Pursuing growth through acquisition
In response to its mediocre financial results, General Mills is looking to expand into some higher-growth areas of the food business. Earlier this year, General Mills announced it would buy natural and organic food producer Annie's, (NYSE: BNNY) for $46 per share, or $820 million.

This is a very important step for General Mills, because organics and natural foods are growing much faster than packaged and shelf-stable foods. To that end, General Mills' management states that the natural and organic foods industry has grown sales at a 12% annual rate during the past decade. This reflects consumers' increasing desire for fresher foods and more natural ingredients.

The acquisition will perfectly complement General Mills' existing portfolio, because the company already has a lineup of organic products that is performing well. General Mills' natural and organic portfolio includes the Cascadian Farm, Muir Glen, LARABAR, and Food Should Taste Good brands. Collectively, these brands generated $330 million of sales in the last fiscal year. This represents just 1% of the company's total sales, so clearly there's a lot of room for General Mills to keep growing in this business.

Annie's generated $204 million of sales in its most recent full fiscal year. Bringing in Annie's will nearly double General Mills' presence in organics. In addition to immediate top-line growth, General Mills expects the acquisition to be accretive to earnings in the first 12 months after the acquisition closes. Presumably, that is based on likely synergies between the two. Since General Mills already has an organic division up and running, it's reasonable to expect the combined company will be able to eliminate duplicative costs.

The Foolish bottom line
General Mills certainly doesn't disappoint investors with its dividend. The company increased its dividend by 8% earlier this year, and yields a nifty 3.2% at its recent stock price. From an underlying fundamentals perspective, however, growth has come up a little short in recent quarters. The last full fiscal year produced only modest growth, and the first fiscal quarter of the current year was a disappointment.

In response, General Mills is pursuing a significant acquisition that makes a lot of sense for the company. General Mills will be moving further into organic and natural foods, which is a great move because those areas of the food business are growing faster than the overall industry. This should help General Mills meet its current-year growth expectations, and keep dividend growth intact going forward.