Spotlight: International first-half highlights
“There is a lot to like in our International business,” said Chris O’Leary, executive vice president and chief operating officer of General Mills International, on the company’s second quarter of fiscal 2016 earnings call earlier today.
The International segment posted strong growth in the first half of the fiscal year with constant-currency net sales up 4 percent and segment operating profit up 8 percent overall. Chris attributed this success to a robust lineup of consumer-first innovation in both developed and emerging markets.
I sat down with him to hear more about the top highlights in International through the first half of our fiscal year and what’s coming in the months ahead.
He pointed first to strength in developed markets, including Canada and Europe.
“Just over 60 percent of our sales are in developed markets and we’ve posted strong growth here in recent quarters,” Chris said.
For example, snack sales in Canada are growing at a double-digit pace on the strength of new products like Nature Valley Nut and Seed bars and FiberOne Crumble Bars.
In Europe, constant currency net sales are up 2 percent for the first six months.
“Consumer-first innovation and getting back to what the consumer wants is really driving growth in this market and around the world,” said Chris. “For example, last year we launched super-premium Häagen-Dazs stick bars that emphasize taste and texture, allowing consumers to enjoy Häagen-Dazs one-handed, on-the-go.”
One of our largest markets for Old El Paso, Chris attributes growth in Europe to the recent launch of Old El Paso Restaurante dinner kits.
“These high-quality kits give consumers an easy way to make a restaurant-quality Mexican meal at home,” he added.
New products from Häagen-Dazs and Old El Paso are coming in the back half including whole wheat tortillas and crispy chicken dinner kits from Old El Paso and two new Häagen-Dazs stick bar flavors.
While developed markets account for the greatest share of our International sales, Chris said he is especially excited about the significant growth certain emerging markets posted in the first half, especially in the Middle East, Mexico and India.
New innovations from sweet snack brands like Häagen-Dazs, Betty Crocker and Pillsbury in Asia, the Middle East and Africa (AMEA) region are driving strong, double-digit growth so far this year.
“Sweet snacking is a $30 billion category in the AMEA market and we see a lot of great opportunities to expand our snacking business here,” said Chris.
In this video, he explains how snacking trends, especially sweet snacks, are great growth opportunities for us in the Middle East.
Chris also noted we are seeing strong growth in Latin America with sales up 17 percent in the second quarter. This growth is driven by Mexico and Argentina as a result of excellent performance on Nature Valley bars and newly launched Fiber One grain snacks in these markets.
And in China, the launch of Yoplait is off to a good start where consumers have responded positively to our premium Perle de Lait line. Yoplait’s market share in Shanghai reached 8 percent last month.
Looking ahead, Chris expects we’ll continue to see strong performance from International.
“We are pleased with our overall performance in our International regions so far, and we have more innovation and product news coming in the back half of fiscal 2016,” he said.
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