Pet foods and price increases help General Mills buck packaged food gloom

Pet foods and price increases help General Mills buck packaged food gloom

General Mills is boosting its profit outlook for 2019 as it reaps the benefits of price increases and the addition of higher margin pet food sales following its acquisition of Blue Buffalo last year.

They now expects adjusted profit growth for the fiscal 2019 year to be between flat and 1 per cent, compared to its prior forecast that ranged from no growth to 3 per cent decline. 

“Our year-to-date performance and fourth-quarter plans give us confidence that we will meet or exceed all of our key fiscal 2019 targets,” said chief executive Jeff Harmening.

Like other packaged food companies, General Mills has been wrestling with higher transport and commodity prices that have been driving up its operating costs. That has come even as growing consumer preference for fresh and healthier offerings has heaped pressure on sales at its core cereal and yoghurt businesses.

In response, General Mills has been cutting costs and raising prices. It also made a bold bet last February with a $8bn deal for Blue Buffalo — the self-described “Whole Foods of dog food.”