General Mills’ two-ingredient ad campaign for Pillsbury boosts relevance of veteran brand

Pillsbury sales made a quick rise this winter after heavily advertising two-ingredient meal ideas like chicken and dumplings with its cans of buttermilk biscuits.

That’s icing on the cinnamon roll for the General Mills brand, which has grown 60% through the past several years in part because of the success of those famed tubes of dough.

“We’ve taken a brand that’s been around for 70 years, and we kept it fresh with consumers,” General Mills CEO Jeff Harmening said. “We keep in touch with consumer needs and solve the problems they have.”

Pillsbury is one of the Golden Valley-based company’s billion-dollar brands, a roster that includes Cheerios cereal, Totino’s pizza rolls and Blue Buffalo pet food. General Mills bought its longtime Minneapolis-based competitor for $10.5 billion in 2001, its largest deal ever.

As shoppers stretch their dollars following years of breakneck inflation and try to save time in the kitchen, the Pillsbury campaign struck a chord. Sales rose 10% in the past three months, and Google searches for the brand rose 50%.

Harmening said there is an “intangible” value behind a well-known brand like Pillsbury that keeps it top of mind at the grocery store.

“When the consumer brings that home, they know their family is gong to like it,” he said. “And so they turn to us because what they really can’t afford to do is buy something and have their family not eat it.”

Overall, General Mills sales were down for the quarter that ended in February. Revenue dropped 1% to $5.1 billion while profit fell 2% to $1.9 billion.

That beat investor expectations, however, and the company’s stock price closed up 1% at $69.43 on Wednesday, a seven-month high.

Guidance for the rest of the fiscal year that ends in May remained unchanged at flat or slightly negative growth.

“With consumers continuing to exhibit value-seeking behavior and increasing on-shelf competition, our experts have indicated that continued growth could be challenging,” Third Bridge analyst John Oh wrote on Wednesday.

Edward Jones analyst Brittany Quatrochi expects the company to sell more food later this year as the company is “stepping up investments behind its brands through increased marketing and innovation” and making “investments in digital capabilities, manufacturing and the strengthening of its brands.”

Chief Financial Officer Kofi Bruce said as inflation cools, the company is able to find cost savings to fend off price increases.

“It leaves us with a very constructive way to drive our business model and offset inflation completely,” he said. “We’ve chewed through a good layer of those added costs we put on during supply chain disruptions.”