Greek yogurt takes a bite out of Yoplait sales
The growing popularity of Greek yogurt is putting a damper on General Mills Inc.’s Yoplait brand, helping to push the company’s third-quarter sales volume down in the U.S.
Although General Mills’ Peanut Butter Cheerios made a strong debut at the beginning of the year and its natural and organic foods sector enjoyed a double-digit increase in sales volume, domestic volume for the food giant fell in the fiscal quarter that ended Feb. 26.
Yoplait’s unit sales slipped 3% as Greek yogurt brands such as Chobani and Fage grew by leaps and bounds past General Mills’ own Yoplait Greek brand, which came relatively late to the field.
The company’s profit for the quarter slipped to $391.5 million, or 58 cents a share, from $392.1 million, or 59 cents a share, a year earlier.
Kendall J. Powell, General Mills’ chief executive, blamed “a particularly challenging operating environment with commodity inflation the highest we’ve seen in 20 years” for the company’s decrease in profit. He also pointed to a “slow economic recovery [that] has kept many consumer budgets under pressure.”
Overall revenue was up a healthy 13% to $4.1 billion, mostly from gains in Canada, the U.S. and the Asia-Pacific region.
In the U.S., sales rose 4% to $2.61 billion on strength in General Mills’ cereals, snacks and baking-goods businesses.
Executives said they expect commodity prices to stabilize soon, with margins shrinking less than they did in the third quarter.
