MINNEAPOLIS: General Mills, the US food giant, is placing a heightened emphasis on digital media and multicultural marketing as it seeks to drive growth during the downturn.
In the last reporting quarter, the company's net sales climbed 2%, with US retail figures up by 4%, and international totals by 7%, while profits rose by almost 50%, to $565.5 million (€394.5m; £349.8m).
Ken Powell, its ceo, said "we continue to reinvest in our businesses at increasing levels. Advertising spending was already planned to be up by double digits and we're adding more."
"For the full year, we'll maintain our strategy of focusing on our branded products and the customer segments with the best potential for growth."
Forthcoming initiatives include teaming up with the reality television series The Biggest Loser on the "Pound For Pound Challenge", when the Minneapolis-based firm will donate a pound of food to Feeding America for every pound in weight consumers lose.
Products like Wheaties Fuel and Chocolate Cheerios will go on sale in January, while a new line of Yoplait Greek Style Yoghurt and a dark chocolate Granola bar are set to hit store shelves in early 2010.
According to the company, many of its recent launches, such as Yoplait Delights Yogurt and Wanchai Ferry Frozen Entrees, are performing well, but it has also held certain innovations back due to the continuing pressures of the downturn.
In the current climate, communications were credited with having played a crucial role in ensuring that General Mills' brands in various categories remained top-of-mind among shoppers.
Jeff Rotsch, evp, worldwide sales organisation and channel development, said "we need to invest behind our established and new products with strong levels of advertising support."
"Advertising increases brand awareness and communicates news on our products which ultimately drives traffic into our stores."
Speaking on a conference call with analysts, Don Mulligan, General Mills' chief financial officer, added that its expenditure in this area climbed by more than a third over the last three months.
"Our media spending was up 37% in the second [fiscal] quarter and we continued to target a double-digit increase for the year in total," he said.
"We're focusing our spending on high ROI-ideas with particular emphasis on multicultural consumers and digital marketing. We're investing strong in international markets to build our global brands."
Among its recent digital activities are Tablespoon.com, a web portal which draws together content from a range of blogs, and the development of applications for the iPhone and Windows 7 promoting its Betty Crocker range.
The owner of Pillsbury and Old El Paso has also built a "Virtual Store" simulating the shopping experience, and a "Shopper 360" survey system to regularly gather feedback from its customers, and it provides leading retailers with access to both of these tools.
Data sourced from Seeking Alpha/AdAge; additional content by Warc staff