Would a coupon persuade you to buy more Cheerios? How about: "The right coupons to the right consumers at the right time."
That — CEO Jeff Harmening said in an interview Wednesday — is General Mills' planned antidote for consumer hesitancy.
"General Mills has a lot of first-party data," Harmening said. "And for that reason, we're able to offer consumers the kinds of things that they really want."
More coupons, more advertising, more flavor: General Mills is "pulling all the levers" to entice people to buy more Nature Valley bars, Totino's pizza rolls and cereal amid stalling sales as inflation reins in consumer spending.
"When consumers are feeling stressed, they want to get back to something that they know, honestly something that's a little fun," Harmening said. "Creating value for consumers is a lot more than just price."
To bring that fun, General Mills recently enlisted NFL players, and brothers, Travis and Jason Kelce for a Lucky Charms commercial, and the Pillsbury Doughboy will even be making a return to talk up some flakier biscuits.
The Golden Valley-based food giant is planning a "meaningful increase" in advertising over the next year to boost its biggest brands. After years of price increases in food, and continuing inflation elsewhere, consumers increasingly need to be convinced they are getting their money's worth on branded packaged food.
The company is so focused on marketing that it recently rechristened chief brand and disruptive growth officer Doug Martin as chief marketing officer.
While Harmening didn't share specifics of how much the ad budget will grow, the company expects to increase spending on coupons 20% over the next six months.
Some of that money will come from productivity savings General Mills and other food companies are finding as supply chains return to normal and as digital investments pay off.
"Right product, right place, shorter time to the customer," said Chief Financial Officer Kofi Bruce. "Having the right levels of inventory in our system means less exposure to waste."
Any cost savings will be crucial; General Mills expects sales to be flat or rise 1% over the next year and for earnings to potentially fall 1% or tick up slightly. Analysts expected slightly better for the next fiscal year, and the forecast falls short of the company's long-term target of 2% to 3% sales growth.
As a result of the lackluster outlook, investors sent the stock down 4.5% Wednesday to $64.17, the lowest close since March, even as the company beat quarterly profit expectations.
"This likely remains a show-me story, where investors will need to see sequential volume improvement throughout the year and a return to the long-term algorithm before we begin to see the stock price improve," Bernstein analyst Alexia Howard wrote.
Edward Jones analyst Brittany Quatrochi said the company is "often conservative with its guidance, and we think increased brand investments should support improving sales trends."
For the fiscal fourth quarter that ended in May, the company's profit fell 9% to $557 million while sales dipped 6% to $4.7 billion.
Over the past year, General Mills took in a profit of nearly $2.5 billion on $19.8 billion in sales — both lower than the year before.
Harmening said that "our job during the year ahead is to make sure that we're creating value for consumers."
"Whether it's the Doughboy talking about flakier biscuits or whether it's Pete Davidson talking about Totino's or Annie's mac and cheese getting cheesier," he said, "that's the number one job to do, as we look at the year ahead, is satisfy consumer needs."
