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General Mills cutting more jobs as consumer tastes turn healthier

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General Mills plans to lay off more employees by the end of the 2015 fiscal year in what's being described as a cost-cutting maneuver, prompted by more consumers turning from pre-packaged meals and frozen items to fresher, healthier foods.

The Golden Valley-based company said in a regulatory filing it will layoff 700 to 800 employees, mainly in the United States, the Pioneer Press reports. The filing didn't detail where the cuts will take place and if any will be in Minnesota, but MPR News notes most of the layoffs will involve people in marketing, finance and human resources and they're expected to be notified by February.

These layoffs are part of a cost-cutting initiative the company announced in June because of slumping cereal, cake mix and packaged food sales in the U.S. General Mills said in early September it would be closing plants in Massachusetts and California, eliminating over 600 jobs.

The latest round of layoffs is expected to save the company $125 million to $150 million annually beginning in fiscal year 2016, reports say.

Consumers veer toward healthier options

General Mills, which reported a 5 percent drop in U.S. retail sales in its latest quarter, is among a handful of processed food makers that have started to make cuts, Wall Street Journal says. Some analysts say this is because consumer tastes are changing as they seek healthier options.

A Gallup poll shows Americans are trying to eat healthier. The polls says about half of respondents say they're trying to include organic food in their diet, while 90 percent are trying to include more fruits and vegetables.

A recent Nielsen report shows that the number of consumers checking labels has increased in the last eight years, which is leading them to choose healthier options at the grocery store.

Consumers' desire to eat breakfast and other meals quickly has people grabbing yogurt, bars and frozen breakfasts, says. Health and wellness trends, along with on-the-go eating, has led to a steady increase in yogurt and protein-packed granola bar sales – the industry totals $2.4 billion annually, Nielsen says.

Also, sales of non-GMO products have increased about 67 percent in the last four years, Nielsen notes. Gluten-free and no-high-fructose-corn-syrup products have also increased in sales.

To keep up with the demand for healthier options, General Mills has tweaked some of its products – it's added protein to its Cheerios, took aspartame out of its Yoplait Light yogurt, made the cinnamon taste in Cinnamon Toast Crunch stronger and increased its gluten-free offerings.

A few weeks ago, General Mills announced it will be acquiring Annie's Homegrown, a company known for it's organic products. The company reassured consumers it will let Annie's be Annie's and do it's own thing.

Longtime executive leaving

In other General Mills news, Ad Age reported this week the company's chief marketing officer is retiring. Mark Addicks, who has been CMO for 10 years, plans to retire next year.

Addicks, who has been with the company for 26 years, was one of the longest-serving CMO's in the food industry. Ann Simonds, president of General Mills' baking products unit, will fill his shoes, Ad Age says.

General Mills said Addicks' had previously told officials of his retirement plans.

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