General Mills to increase advertising spend

25 September 2009

MINNEAPOLIS: General Mills, the US food manufacturer, posted a double-digit increase in its marketing spend during the last quarter, and plans to continue to invest in brand-building initiatives as it seeks to drive future growth.

For the quarter ending in August, the company's total sales rose by 1%, to $3.52 billion (€2.4bn; £2.2bn), with net retail sales in the US up by 6%, while international revenues fell by 4%, largely due to unfavourable exchange rates.

The owner of Cheerios and Green Giant boosted its media budget by 16% over this period, including a 19% uptick in its home market, and it intends to follow such an approach over the course of next year.

Speaking during a conference call, Donal Mulligan, its chief financial officer, said "increased media spending for both traditional media and fast-growing online media vehicles has been driving the growth in our brand spending."

"Our 2010 plan already included double-digit increases in media spending for the year. We are now planning to reinvest on our first quarter earnings growth in additional media and consumer marketing programmes."

As part of this process, the Minneapolis-based firm will pay careful attention to the return on investment delivered by its various campaigns.

"As always, we will maintain strong vigilance over the ROI associated with these initiatives and we expect our increased consumer spending to contribute to continuing sales momentum," Mulligan said.

Brands which have benefited from recent advertising support include new products like Cookie Crisp Sprinkles, a blueberry pomegranate variant of Total cereal, and Wheaties Fuel.

Similarly, every box of Big G will feature an insignia demonstrating that General Mills' cereals are a good source of wholegrain, a message that will be reinforced with commercial communications.

Five new ads also broke last week for Progresso soup – three on television and two on the web – with Pillsbury, Bisquick and Hamburger Helper also being backed by fresh campaigns.

Data sourced from General Mills/Seeking Alpha; additional content by WARC staff