Packaged foods giant General Mills (NYSE:GIS) has long been a favorite among dividend investors. Its popular consumer products resulted in steady growth for many years, which allowed the company to reward its shareholders with dividend growth along the way. In fact, General Mills and its predecessor companies have paid uninterrupted dividends for 115 years. And, the company has raised its dividend payout 15 times in the past 10 years.

At its current stock price, General Mills has a nifty 3.2% yield, which is probably attractive for income investors. But before you jump in and buy the stock, there are reasons to be concerned about General Mills' future dividend growth. Here's everything you need to know.

Losing the war for shoppers
General Mills is seeing weak demand for its products here in the United States and abroad. Competition from private-label brands and fresher alternatives, such as organics, are taking a bite out of demand for the company's brands. Management acknowledged these pressures recently by cutting its full-year forecast for both sales and profits.

Sales of General Mills' canned and other shelf-stable items, which include Green Giant canned fruits and vegetables and Progresso soup, are under significant pressure from changing consumer appetites. In the United States, consumers are showing an increasing desire for fresher, better-sourced ingredients. This explains the boom in organic foods. General Mills management stated in a conference call earlier this year that the organics industry has grown at a double-digit clip over the past decade. In response, General Mills bought Annie's for $820 million in September. This was a deal to supplement General Mills' existing organic brands like Cascadian Farm, Muir Glen, LARABAR, and Food Should Taste Good brands.

Unfortunately, General Mills' efforts to expand in organics haven't had a material impact. That's because its various organic brands represent a tiny fraction of its business. Collectively, its organics brands generated $330 million in sales in the last fiscal year. Even when including Annie's $204 million in sales last year, that's only about 3% of the company's total revenue. It's clear that General Mills still has a ways to go to reap meaningful growth from new categories. Annie's is expected to contribute just one penny to General Mills' earnings per share this year.

In addition, General Mills expects low single-digit sales growth this year. But it's worth noting that the company has missed sales and profit forecasts for four quarters in a row -- management has not properly anticipated the intensity of competition -- so there's reason to be skeptical as to whether all the bad news is out in the open. To try to boost profits, the company is embarking on an aggressive cost-cutting program. Management hopes to shave $260 million-$280 million off its cost structure by next fiscal year.

If the cost savings don't materialize as planned, there's reason to think General Mills will deliver a disappointing dividend increase next year.

Slowing profits threaten dividend growth potential
Not only does General Mills have a long history of paying a dividend, its growth rate in recent years is very impressive. Over the past five years, General Mills has increased its dividend by 11% per year. With that kind of growth, dividend investors have seen their income rise substantially from owning the stock. To be sure, General Mills' dividend appears well-covered by earnings.

But looking ahead, it's reasonable to question whether General Mills can sustain double-digit dividend growth going forward, based on the significant operating challenges facing its business.

General Mills expects earnings to grow only at a low-single digit percentage from last year's $2.82 per share. General Mills' current annualized dividend of $1.64 per share represents 58% of trailing earnings. Because of its fairly modest payout ratio, it's likely General Mills will be able to sustain its dividend.

But without underlying earnings growth, it's hard to imagine General Mills can keep delivering double-digit dividend raises indefinitely. With all this in mind, investors should lower their expectations for future dividend growth unless earnings growth strengthens.

Bob Ciura has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.