General Mills reported a 5% drop in net sales for fiscal 2026, falling to $18.42 billion, as it shifts its strategy toward protein, fiber, and clean-label products.
Sales decline and strategic pivot
The company’s organic sales decreased by 2%, driven by lower volume and weaker price and mix performance. North America Retail saw the steepest decline, with net sales down 11% to $10.57 billion. Two brands—Totino’s and Blue Wilderness—accounted for nearly half of the retail pound declines in that segment.
General Mills is now focusing on benefit-led product innovation. The effort prioritizes protein, fiber, clean ingredients, and bold flavors. Early results indicate progress. Cheerios Protein is nearing $100 million in retail sales, while Annie’s Super Mac, which delivers 15 grams of protein and 6 grams of fiber per serving, saw sales grow by over 80% in fiscal 2026.
Chief Operating Officer Dana McNabb stated the company is adapting to changing consumer habits, particularly among users of GLP-1 weight-loss drugs. A study from OC&C Strategy Consultants estimates GLP-1 drug use at 12% today, with projections reaching 15% to 18% by 2031. These medications are already altering grocery choices, as users favor protein and nutrient-dense foods while reducing alcohol, sweet bakery items, and snacks.
The shift aligns with where consumer spending is headed. Most manufacturers have yet to adjust their product pipelines, but if the trend continues, others may soon follow General Mills’ lead.
Related: Factors to keep in mind before purchasing mass gainer supplements
UPF lawsuits dismissed, but regulatory risks remain
A federal court permanently dismissed a lawsuit against Kraft-Heinz, PepsiCo, and other food manufacturers over ultra-processed foods. The case had claimed a link between UPF consumption and childhood health issues, but the court ruled the plaintiff failed to prove causation—even after listing 179 specific products consumed over his childhood.
The dismissal doesn’t end the issue. California has already defined “ultra-processed foods of concern” for school meals, with full implementation set for 2035. At least 17 states have proposed or passed similar measures. The FDA is expected to release a federal definition of UPF soon, which could lead to new labeling rules, procurement policies, and lawsuits.
HHS Secretary Robert F. Kennedy Jr. said in June the definition is under White House review and could arrive “over the next couple of months.” Once finalized, it will serve as a benchmark for future regulations. A separate lawsuit in San Francisco against major food manufacturers remains active.
McCormick’s $28 million tariff refund and rising costs
McCormick received $28 million in tariff refunds in the second quarter, with another $3 million expected later this year. The funds are being used to offset inflation driven by the Iran conflict, which is pushing costs up by about 6% for the fiscal year.
