In the food industry, a reckoning is afoot—but one of its largest companies learned a key strategy from a classic brand.
It’s no secret the rise of health-conscious eating poses a threat to General Mills (GIS), which for nearly a century has given Americans the sugary snacks they crave. In a new interview, the company’s CEO Jeffrey Harmening said an update of the classic Trix cereal taught him how to serve evolving consumers and grow his business at the same time.
“There's a lot of change with regard to consumer food values,” Harmening says. “People want fewer ingredients and ingredients that they can pronounce—no artificial colors and flavors.”
The shift in tastes is even more pronounced in the shrinking cereal market, where sales declined 17% from 2009 to 2016.
In response, General Mills released in 2016 a reformulated, natural version of Trix. But feedback was mixed, said Harmening, who made the remarks on Monday to Yahoo Finance Editor-in-chief Andy Serwer during a panel at Milken Global Conference 2019, a gathering of business and civic leaders in Beverly Hills.
“Half the people said, hey, we think you're the smartest people ever for taking artificial colors and flavors out. And some people, we think you're the dumbest guys ever for doing that,” he says.
The company came up with a simple solution: Two versions of Trix, the natural one and the classic one, which the company re-released in 2017.
‘When we give them what they want, we never lose’
“We've given people what they want,” he says. “The people who want no artificial colors and flavors—they're buying more Trix. The people who realize how much they like the original, they like it.”
“The first thing and most important thing for us is, with so much swirling around, making sure we keep our eye clearly focused on consumers,” he adds. “When we give them what they want, we never lose.”
Harmening said he discovered that the health-conscious zealot and the sweet tooth sometimes coexist within the same consumer.
“Some people want natural organic and some people want unicorn-shaped marshmallows and Lucky Charms,” he says. “Sometimes they want the organic in the morning, and they want, the unicorn marshmallows in Lucky Charms in the afternoon.”
The panel, entitled “Staying Atop—How CEOs Manage Shifting Tide,” also featured Viacom CEO Bob Bakish, Siemens US CEO Barbara Humpton, Ernst & Young CEO-elect Carmine Di Sibio, and Goldman Sachs CEO David Solomon. Watch the full panel here.
Andy Serwer is editor-in-chief of Yahoo Finance.