Years ago, (back before COVID!), I predicted a major shakeout in the Fast Food Industry. It’s happening now, as I foresaw. But there’s an even bigger upheaval dawning in the broader processed food space. And General Mills is leading the way…
General Mills (GM), maker of such well-known brands as Cheerios, Wheaties and Cinnamon Toast Crunch cereals, Nature Valley Granola Bars, and Gushers candy, has announced a mammoth, whole-sale makeover to its business model – a response to recent plummeting consumer demand…
What’s going on?
All makers of Ultra-Processed Foods (UPFs) – but especially those who capitalize on sugary cereals, fizzy beverages and snacks – are experiencing never-before-seen challenges these days. It’s all part and parcel of the onslaught by healthy eating advocates, nutritionists and physicians to raise con-sumer awareness about the dangers of processed foods.
And the first mega-player to admit the need for a business model revolution is General Mills. The company calls the overall plan a ‘global transformation initiative’.
GM has announced it will cut $3 billion in costs over the next four years as part of its plan to get back into the profit column and restore a growth profile that will please its investors. The program will start in fiscal 2027, with a projected $750 million in cost savings.
What they’re doing
“We finished fiscal 2026 on a positive note, delivering fourth-quarter adjusted results that met our expectations while continuing to strengthen our foundation to position General Mills for long-term success,” GM Chairman and CEO Jeff Harmening told the recent quarterly conference call. “Our focus in fiscal 2027 is to improve our top-line growth by driving a step change in the remarkability of our brands. This includes a significant increase in innovation and renovation centered on the benefits that matter most to today’s consumers.”
‘A step change in remarkability’? Really? I’m not sure I understand what that means. I wonder if the shareholders and financial community types in on the conference call did…
Nevertheless…
But the reference to brand ‘restoration and renovation’ focused on what consumers want is self-explanatory.
The company has already embarked on a restructuring program aimed at improving product-ivity. Starting now, expect GM to begin streamlining itself by selling off or just discontinuing money-losing or stagnant brands and products.
And look for a barrage of new advertising and promotion activity focusing on GM’s ‘healthier’ brands.
Sounds familiar
On its surface, it sounds a lot like the new business initiatives launched recently by Coca-Cola and PepsiCo. But there’s much more to GM’s plan. It’s a wholesale corporate upgrade that will touch all elements of its business model.
In fact, it’s the most disruptive, most ‘courageous’ renovation plan the company has ever committed to. And much deeper- and wide-reaching than any other UPF maker has yet attempted.
My take
It will be interesting to see how effective GM’s resurrection and fortificatioin plan will be. But I expect competitors, and other UPF makers to follow suit soon – before the results of the GM experiment are clear.
~ Maggie J.
https://www.fooddive.com/news/general-mills-3b-cost-cuts-consumer-inflation/824321/?utm_source=Sailthru&utm_medium=email&utm_campaign=Issue:%202026-07-02%20Food%20Dive%20Newsletter%20%5Bissue:86637%5D&utm_term=Food%20Dive