General Mills posts increased Q2 net sales posts increased Q2 net sales
MINNEAPOLIS General Mills on Wednesday reported results for the second quarter of fiscal 2008. Net sales for the 13 weeks ended Nov. 25, 2007, rose 7 percent to $3.70 billion. Segment operating profits essentially matched last year’s second quarter at $716 million, including higher input costs, a 10 percent increase in consumer marketing investment and $20 million pre-tax expense associated with a product recall of frozen pepperoni pizza. Net earnings totaled $391 million including restructuring and associated costs of $20 million pre-tax, $13 million after tax. Diluted earnings per share totaled $1.14, up 6 percent from $1.08 a year ago.
Through the first six months of 2008, General Mills’ net sales increased 7 percent to $6.78 billion. Second-quarter net sales for General Mills’ U.S. retail operations grew 3 percent to $2.52 billion. Second-quarter net sales for General Mills’ consolidated international businesses grew 22 percent to $666 million.
The company’s snacks division net sales grew 12 percent, fueled by strong sales for Nature Valley grain snacks, Fiber One bars and fruit snacks. The Yoplait division net sales increased 11 percent and Big G cereals grew 3 percent, following 5 percent growth in the first quarter of 2008. Net sales for baking products also increased 3 percent while the meals division net sales grew 1 percent, led by Progresso ready-to-serve soups. Pillsbury USA division sales declined 2 percent, including the impact of the frozen pizza recall. Net sales for the company’s Small Planet Foods organic business rose 14 percent.
Looking ahead to the second half of fiscal 2008, Chief Executive Officer Ken Powell said, “We expect our good sales momentum to continue, with contributions from additional new product introductions, selected pricing actions and ongoing investment in brand-building activities. For the year in total, we now estimate that our net sales will grow at a mid-single digit rate, exceeding our long-term goal of low single-digit sales growth.”
Kraft scraps Diet in favor of South Beach Living
CHICAGO Kraft Foods this month is rechristening its South Beach Diet line of foods to South Beach Living because the company believes “diet” carries negative connotations about a product’s taste and brings to mind older consumers struggling to loose weight. Additionally, “diet” seemed to limit Kraft’s South Beach line to those who wanted to lose weight, instead of appealing to a growing demographic that simply wants to eat healthy.
“Living,” on the other hand, suggests more youthful consumers pursuing a health natural lifestyle.
“We think [the name change] is going to broaden the appeal of the brand and fuel its growth trajectory,” Howard Brandeisky, Kraft’s vice president for strategic marketing initiatives, told the Chicago Tribune.
By swapping out “diet” for “living,” Kraft is striving to make South Beach more of a lifestyle brand, according to John Palumbo, founder of BigHeads Network, a marketing consulting firm. For a brand like South Beach, the goal is to position the product as part of a healthy, natural lifestyle, and the word “living” helps accomplish that better than “diet,” he added.
Kraft first rolled out its South Beach line in 2005 and currently features 70 products ranging from frozen entrees to snack bars and salad dressings. The line has been successful for Kraft, this year having been named by Information Resources Inc. as one of the “Product Pacesetters” for 2006.
Doritos narrows its search for its ‘cheesy’ love song
DALLAS Doritos has narrowed its cheesy love song search for its “Crash the Super Bowl” promotion to a field of 10 unsigned musicians.
The 10 semi-finalists’ bios and music are listed on a microsite, crashthesuperbowl.com, where consumers are invited this week to cast their votes as to which should run during the Super Bowl. Online balloting is open from now until Dec. 31 to vote for one of the top 10 and voting on the three remaining finalists selected form the initial vote will resume Jan. 7 through Jan. 31, when a winner will be announced. The winner receives a record deal with Interscope Geffen A&M Records, in addition to a 60-second music montage that will air during the Super Bowl, as well as during some NFL playoff games.
The PepsiCo-owned brand asked for unknown artists to create music videos. Doritos launched a similar campaign last year that allowed consumers to create their own spots.