General Mills is putting "Cinnadust" on everything — and it is working sales magic.
Sales of Cinnamon Toast Crunch are up 20% over the past year as the nation's second-best-selling cereal (behind Honey Nut Cheerios) benefits from a concerted effort to bolster its visibility by marketing and promoting the cinnamon-sugar flavor on its non-cereal products.
"We've got Cinnamon Toast Crunch churros, minis, Betty Crocker deserts and frostings, and that's all done incredibly well for us too," said Jon Nudi, president of North American Retail for General Mills. "We're also bringing our 'Cinnamojis' to life in pop culture, tying in with celebrities and showing up at professional sporting events."
The Golden Valley-based company has multiplied its marketing budget for North American retail, the largest part of General Mills' business. General Mills expects to increase its ad spending by double digits through the end of the fiscal year — a significant bump compared to its more typical increases of 5% in recent years.
"We believe healthy investment in brands, even in periods of volatility, is critical for long-term growth," CEO Jeff Harmening said at an investor conference Tuesday.
General Mills also has more money to spend on advertising thanks to several years of unusually high revenue and profit growth. On Tuesday, General Mills increased its financial outlook for the rest of the fiscal year, which ends in May. Sales are expected to grow 10% over last year, the largest annual jump in a decade and potentially putting the company over the $20 billion mark for the first time ever.
Competitors have noted the increased "advertising intensity."
"I think we need that kind of support in order to maintain interest in the overall [cereal] category," Post Holdings CEO Rob Vitale told analysts in a conference call earlier this month. "We're far more sensitive to promotional intensity than advertising intensity. And I think that's within the normal range."