General Mills is desperate to keep up its growth, so it's making up new foods

Thursday, September 24, 2020 by Robinhood Snacks | Disclosures

Having a bowl... General Mills. The maker of Cheerios, Lucky Charms, and Cocoa Puffs saw its sales pop 10% last quarter. Cereal sales have fallen every year for the last decade, so... that's great. Instead of grabbing a Starbucks sammie on your way to work, you were eating cereal from a hoarded 10-pack as you WFH'd. That was great for processed food giant GM. But now, it has a problem...

"Increase the Stickiness"... GM's term for keeping demand up, according to slide 11 of its earnings deck. Now that the pandemic has lured customers back to Cinnamon Toast Crunch, GM needs to keep them. It's trying to do that in 2 ways:

  • "Meaningful Renovation": Improving existing products (eg: Yoplait yogurt, now with "real fruit").
  • "Relevant Innovation": Apparently, this involves bizarrely combining existing products (eg: Starburst-flavored Yoplait, Go-Gurt Slushie).

GM is incredibly un-confident that you'll stick with it... and we know that because of 1 expense: marketing. Like General Mills, Netflix saw its sales surge during pandemic. Netflix is confident that you're in for the long-term, so it's spending less on marketing than it did last year. Meanwhile, General Mills is jacking up marketing spend to prevent you from returning to your pre-pandemic brunch habits.