Over the past decade, Minneapolis-based General Mills, Inc. has been working to build its international business. In the past 14 months, the company made several strategic acquisitions that increased its global scale, including Yoplait International.
With one year of ownership under its belt, General Mills has been pleased with the progress of Yoplait International, Don Mulligan, executive vice-president and chief financial officer, told analysts at the Barclays Back to School Conference held Sept. 6 in Boston.
“We completed our first year integration activities as planned, including the creation of a global strategic business unit that is helping to share the yogurt R.&D. insights, new product concepts and marketing ideas around the world,” Mr. Mulligan said. “We achieved share gains in each of our key international markets. We expanded our directly operated businesses by reacquiring the Yoplait licenses in Canada and Ireland.”
In 2013, Mr. Mulligan said General Mills sees continued opportunities for growth in both France — where yogurt category sales are nearly $5 billion — and the United Kingdom — where category sales are more than $3.5 billion.
“In France, we are launching new varieties of Calin,” he said. “This is a functional yogurt high in calcium and we have launched a Greek style line extension. We have expanded these products in the U.K. market as well and we are supporting both new and established yogurt products with higher levels of advertising.
“We also reacquired the yogurt license, the Yoplait license in Ireland, where the brand’s retail sales totaled $65 million in the last 12 months. This is a nice addition to our directly operated yogurt business in Europe.”
In Canada, yogurt is a $1.4 billion category, and General Mills recently assumed the Canada Yoplait business from its previous licensee. The company’s Liberte and Yoplait businesses now hold a 35% share of the total yogurt category in Canada, Mr. Mulligan said.
In 2013, Mr. Mulligan said General Mills expects to drive growth across its expanded yogurt portfolio in Canada.
“We plan to increase household penetration for Liberte with distribution gains, new products, and television advertising for the first time in Liberte's history,” he said. “We are planning significant levels of investment behind the Yoplait business, including new product innovation, improvements on established products, and incremental advertising.
“With Yoplait added to our Canadian business, we are projecting well over $1 billion in retail sales in Canada in this fiscal year, making us the fourth largest food manufacturer in that country. We recently ranked No. 1 in a nationwide retailer survey of the top 20 packaged goods manufacturers.
“Now we will offer our customers leading brands and scale across all three temperature states: dry, frozen, and refrigerated.”
Overall, General Mills sees attractive global growth prospects for its yogurt business, Mr. Mulligan said.
“Consumption is still concentrated in a fairly small number of developed markets today,” he explained. “While Canada per capita consumption is relatively high overall it is really concentrated in Quebec. The rest of the country is a developing market for yogurt and people in Russia and China consume less than 5 kilograms per person each year so we are quite positive about the prospects to expand the global yogurt business in the years ahead.”
Closer to home, General Mills has a number of new yogurt items arriving on U.S. store shelves, including 100 calorie Yoplait Greek offerings, expanded distribution of Mountain High yogurt, and the phased U.S. roll-out of Liberte, a Canadian yogurt brand. Additionally, several established products are getting a fresh look, including the addition of more fruit to original style Yoplait yogurt and changes to Yoplait Light, which now has only 90 calories per cup and carries the Weight Watchers endorsement.
“The consumer directed marketing and advertising behind all this news is just beginning,” said Ian Friendly, executive vice-president and chief operating officer of U.S. Retail Operations. “We are excited about our innovation and marketing plans, which are designed to renew net sales growth for our U.S. yogurt business in 2013.”
