General Mills Inc. F3Q09 (Qtr End 02/22/09) Earnings Call Transcript

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2009-03-18 08:20:39.0

Tags: Category, Brand, General Mills Inc., Call Transcript, Earnings, Citigroup Inc., Branding, Corporate Governance, Network Technology, Marketing, Business Operations, Corporate Law, Networking, Seeking Alpha

Question-and-Answer Session

Operator

Thank you. (Operator Instructions) and our first question comes from the line of David Driscoll with Citi Investments Research. Please proceed with your question.

David Driscoll - Citi Investments Research

Thank you. Good morning everyone.

Ken Powell

Hi, David. Good morning.

David Driscoll - Citi Investments Research

Well certainly, I think these results in context of what we are seeing out there in the environment do look good and that U.S. retail segment, I would call it somewhat amazing. Big G cereals sales up 13%, Ken can you talk to us about really the kind of, if we could peel the onion a little about the factors within Big G, between the category competition, your new products and your promotion? These are, again some of the best numbers that you’ve produced in that particular segment within U.S. retail in quite some time and I think a lot of people are quite interested in how you attribute the success?

Ken Powell

Well, thanks David for the question. I mean the category, I think as you know has been pretty solid all throughout the year, a little over 2% year-to-date for us. Recent month, the category trend was a little better than that and that’s in measured channels only. So we think clearly when you include all of our channels, the growth is even better than that.

So the categories are very solid I think in this economic climate. People are probably choosing to eat breakfast a little bit more at home, so that’s good, but I think the big, big factor for us is that our execution right now is so strong across the board. We have very solid messages across the Cheerios franchise and I commented on that in our remarks.

We had a very, very solid initiative behind Multi-Grain Cheerios this year, which has that brand growing now in the high double digits and so the Banana Nut Cheerios adding almost a full share point. So Cheerios, which is the largest franchise in category, is also one of the fastest growing brands in the category. So that’s a great story.

Fiber One continues to perform very well for us and we just launched a shredded version of Fiber One and that’s going to help that franchise. Total cereal now is growing at strong rates. Our kid brand, very good execution there, so it’s really a story of excellent marketing fundamentals with as I said earlier, all eight of our core franchise is growing on a baseline basis, which I think is the best indicator of that good execution across the board.

 

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