Jul 15, 2015 • By

Spotlight: Convenience & Foodservice

In the U.S., consumers spend $1.4 trillion a year on food and beverages. Nearly half of that is for food eaten away from home.

As consumer confidence has improved, food away from home has captured an increasing share of food spending.

This presents a significant business opportunity for the General Mills Convenience & Foodservice operating segment, which serves away from home channels like K-12 schools, college and university campuses, corporate cafeterias, hospitals, restaurants and convenience stores.General-Mills-Convenience-and-FoodserviceThe segment had a record performance year in fiscal 2015 with segment operating profit up 15 percent. Over the last decade, this business has gone through an incredible transformation with a clear focus on prioritizing product lines and customer channels. Profit for this business segment has increased by more than 150 percent since 2005.

Bethany Quam, a vice president at General Mills and the president of Convenience & Foodservice was in Boston yesterday, along with other company executives, to give investors an overview of the segment’s plans for growth in fiscal 2016.

I talked with her about what is driving their success and to hear about what’s in store in the months ahead.

One of the key channels for this business is K-12 schools, where General Mills has been a leader in helping foodservice operators serve children a good start to their day through school breakfast programs.


“K-12 has been an outstanding growth channel for our business. It really all started with knowing what the operators and the kids wanted,” says Bethany  “We developed a Pillsbury-branded line five years ago for school foodservice operators who wanted an easy and convenient way to serve a breakfast that kids could eat in the classroom. That’s where a lot of our innovation is focused. I recently was in the Burnsville (Minnesota) school district and they had to get 400 kids hot breakfast within 30 minutes. It was absolutely eye opening to watch what their wonderful lunch ladies do to get their students off to a great start.”

Sales have grown at a strong double-digit compound rate as we’ve added new varieties of heat-and-eat breakfast baked goods, including new cream-cheese filled mini bagels, which launched this past spring.

Mini bagels

In the new fiscal year, General Mills is launching a new lunch option, Old El Paso Gorditas.

In addition, growing on the popularity of smoothies, the segment is launching Yoplait Smoothie Pro, pouches of pre-mixed smoothies that can be poured directly into a drinking cup, which can be customized for serving sizes and added ingredients.

Away from home snacking is another key growth area for the segment. Convenience stores are our largest snack food channel, with more than 150,000 outlets across the country.

“We have a great lineup of new grab and go snacks coming this year, including Nature Valley Simple Nut Bars made with whole nuts and seeds, and new Sweet and Spicy Chili and Dark Chocolate granola bar,” Bethany says.

Simple nut bars

General Mills also is expanding its line of Pillsbury mini baked goods, which launched last year in 7-Eleven with great success.

We’re also continuing our partnership with McDonald’s, which started offering Yoplait Go-Gurt as an option in their Happy Meal last year. To give you some perspective, there are around 74 million kids in the U.S. and we sold more than 200 million tubes of Go-Gurt with McDonald’s.

Go-GURT-McDonaldsThis year, we’ll include a strawberry-banana flavor featuring the Minions, from the popular movie in theaters right now.

A replay of General Mills’ Investor Day webcast in Boston yesterday is available on the Investors section of GeneralMills.com.

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