General Mills Bets on Innovation After Price Cuts Lift Volumes

General Mills has increased new product launches by 50% over the last two years, and new products now account for 5% of net sales as the company accelerates innovation following price cuts across much of its portfolio.

Dana McNabb, chief operating officer of the Minnesota-based food giant, said Wednesday in prepared remarks tied to the company's first-quarter fiscal 2027 earnings report that General Mills is prioritizing trends in demand with today's consumers, including protein, fiber, clean labels, bold flavors and "fun and indulgence."

"We understand what the consumer values, and we are bringing them appropriately to the categories that we play in," McNabb said. She noted retail sales in North America rose about 2 points in the first quarter compared with fiscal 2026. "We'll continue to see improved momentum going forward."

The maker of Cheerios, Chex Mix and Nature Valley posted improved market share in the majority of its priority categories, McNabb said. The gains are not universal. Cereal market share fell 0.1 during the first quarter after falling 0.9 in the same period a year ago. In soup, Progresso's share slipped 0.1 after a 0.4 decline. Totino's, one of the company's struggling brands, cut its recent declines in half.

"We're not all the way to growth yet," McNabb told analysts. "We still have work to do."

The price cuts underpinning the strategy date to late 2025, when General Mills lowered prices on nearly two-thirds of its grocery products in North America. The moves produced an uptick in product volume. PepsiCo and other companies have since followed with their own price reductions.

"We really focused on improving our base prices last year to bring more value to consumers, and we saw it worked," McNabb said.

The top line reflects a business in transition. For the quarter ended Aug. 30, sales fell 3% to $4.4 billion, hurt by the recent yogurt divestiture. Organic net sales essentially matched year-ago levels.

While other food companies prepare to raise prices in the coming months as the Iran war and other inflationary pressures accelerate headwinds, General Mills said it will take a more selective approach to increasing consumer costs.

"We operate in 25 categories, and each one requires a specific set of actions," McNabb said. "We'll assess the price value relative to the competition, and we'll continue to adapt as the environment adapts."

The company is also funding the push through cost savings. In July, General Mills said it planned to cut $3 billion in costs during the next four years, with two-thirds of the total geared toward a more targeted focus on products and trends that resonate most with consumers.

"These savings will help us fund investments in our brands, offset inflation, and accelerate our earnings and cash flow growth in fiscal '28 and beyond," McNabb said.