General Mills unveils new financial strategies for 2025
The company is aiming to rework its value proposition for consumers.
USA – General Mills, Inc. is implementing cost-saving measures and reinvestment strategies to stimulate growth after experiencing a weak third quarter, which led to a significant decrease in the company’s fiscal 2025 guidance.
According to Jeffrey Harmening, the firm’s chairman and CEO, the company will begin reworking its value proposition in the fourth quarter. This will involve increased investment in pricing, brand marketing, media, and innovation, all supported by savings generated from new cost-efficiency initiatives.
“Coming into this year, we expected the consumer environment to improve as the year progressed, but that has not been the case,” Harmening stated during a March 19 conference call discussing third-quarter results.
He noted that consumers are still prioritizing value, just as they were at the beginning of the fiscal year. Additionally, recent consumer confidence indices indicate that consumer confidence is currently lower than it was three months ago, and on par with levels seen in 2008, placing the company in a challenging position.
Despite these challenges, Harmening expressed optimism about reinvestments in the upcoming year while striving to establish the correct value balance for consumers.
General Mills reported that its new cost-control initiatives are expected to yield over US$100 million in savings, on top of US$600 million in gross productivity savings from holistic margin management (HMM).
The company anticipates that HMM will reduce the cost of goods sold by at least 5% for fiscal 2026, following an estimated 5% reduction for fiscal 2025 and 6% for fiscal 2024.
“We envision the upcoming year focused on driving improved growth and competitiveness. The purpose of the additional savings exceeding US$100 million, alongside the net HMM above inflation, is to free up resources for reinvestment in growth. This efficiency will facilitate our growth objectives,” stated Chief Financial Officer Kofi Bruce.
Bruce further clarified that while they are not specifically targeting margin improvements, any additional flexibility beyond the US$100 million savings will likely be directed towards reinvesting in the business.
He concluded that the company will provide more detailed information about the specific areas of investment as they move into the fourth quarter and prepare guidance for the next fiscal year.
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