General Mills: Yoplait Greek 100 is on track to deliver $100m in year one retail sales

General Mills’ Yoplait Greek 100 yogurt is on track to deliver $100m in retail sales in its first year on the market, revealed CEO Ken Powell on the firm’s third quarter earnings call yesterday.

He said: “This product is expanding the buy rate of current yogurt consumers and bringing new users into the category.”

And while Chobani and Dannon initially stole a march on Yoplait in the Greek segment, it has since regained the initiative, said Powell.

And for our Greek yogurt business in total, sales are significantly outpacing the growth of the segment. We picked up three points of segment market share year-to-date.”

Meanwhile, US year-to-date sales of new launch Liberté have “increased at a robust double-digit rate, and we still have significant distribution growth ahead of us”, he said, while distribution of the Mountain High brand is spreading from the west coast to the rest of the country.

The US operating environment is getting better

Overall, he added, “the US operating environment is getting better”, with pricing trends moderating and volume trends improving.

“As we have worked price and merchandizing over the last year, we've seen baselines in US retail across all channels improve very nicely and sequentially. We were down 5 or 6% in Q1, down 3% in Q2 and flat in the most recent quarter.

“So as we get our pricing in the zone, which has been our goal, the response that we are seeing is actually an improvement overall in the business and improvement in un-promoted sales. “

While General Mills has lost some market share in cereals in recent months, a new marketing campaign for Lucky Charms has boosted sales, while consumer response to new launch Honey Nut Cheerios Medley Crunch has been “terrific”, he said.

Meanwhile, US year-to-date retail sales of Progresso rose 7%, while Lärabar posted double-digit growth.

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New launch Honey Nut Cheerios Medley Crunch has generated "terrific" consumer feedback, says General Mills

Will General Mills spin off its mills?

Asked by an analyst whether General Mills had considered spinning off its flour milling operations - following moves by ConAgra, Cargill and CHS to create a new JV called Ardent Mills - senior VP Dave Dudick said:

"Obviously, we're always looking for moves that would improve shareholder value, so we're open to several things and we're discussing those on an ongoing basis."

However, chief financial officer Don Mulligan said: "Like many parts of our portfolio, we look at them from time to time, to see if there's a different way to structure them, to extract more shareholder value. And quite honestly, we've never seen the play."

The Minneapolis-based firm, which makes Cheerios cereal, Progresso soups and Haagen-Dazs ice cream, said volumes excluding recent acquisitions of Yoki Alimentos in Brazil and Yoplait Canada, rose 1% in the third quarter.

Net income rose 1.8% to $398.4m in the quarter, while net sales rose 7.5% to $4.43bn. Excluding the acquisitions, net sales grew 2%.