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Can quinoa Cheerios save cereal sales at General Mills?

By Svati Kirsten Narula
Published Last updated This article is more than 2 years old.

Six months after announcing a massive cost-cutting effort, which includes shutting down two factories in the US and laying off at least 700 other employees, executives at General Mills are surely looking forward to the end of 2014. The company just endured another disappointing quarter, reporting this week that sales were down 3% from last year and quarterly net profit had dropped by 37%.

Hoping for a turnaround in 2015, the maker of Lucky Charms and Cinnamon Toast Crunch isn’t giving up on cereal, but will introduce new varieties targeting current health trends—meaning less sugar, less gluten, and more protein.

“Our first priority for US retail this year is investing in cereal for growth,” chief operating officer Jeff Harmening said on the company’s Dec. 17 earnings call.

General Mills
Could Corn Flakes with kale be far behind?

General Mills introduced protein-enhanced Cheerios (in two flavors) in May, and early next year will sell Cheerios made with quinoa, kamut, and spelt—a blend it has dubbed “Ancient Grains.” This is likely to appeal to the many US consumers who perceive these grains as healthier than wheat. However, these grains are added to the cereal as clusters and standalone pieces, not incorporated in the actual O-shaped Cheerios, which may deter fans of regular Cheerios.

The American affinity for ancient grains, while it may inspire curiosity in other countries, is getting stronger. Also gaining traction is the market for gluten-free packaged foods. Accordingly, another of the 50 new General Mills products coming soon is a Chex brand “gluten-free granola mix.”

The company’s commitment to keeping cereal on breakfast tables is so strong that it’s willing to stray from the health-food focus a bit by bringing back French Toast Crunch, which was discontinued in 2006 but clearly beloved by some cereal eaters. A General Mills spokeswoman told CNN Money that the news of French Toast Crunch’s return generated enough excitement that the server hosting the company’s product blog crashed after the announcement was made.

General Mills

Cereal aside, General Mills plans to further capitalize on Greek yogurt’s health halo by selling Yoplait “Greek 100 Whips!,” a 100-calorie Greek yogurt mousse that bears little resemblance to traditional Greek or Greek-style yogurt. A Yoplait marketing manager told ABC News that this product is “for the many consumers who want the benefits of Greek yogurt, like protein, but don’t necessarily love the texture or the taste.”

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