Gen. Mills Ups Prices on Cereals, Baking Products
General Mills, Inc., will soon raise prices on select cereal brands and baking products in response to higher commodity costs, a company representative confirmed Thursday.
Golden Valley-based General Mills will implement “low-single-digit” percent increases on some types of cereals and slightly higher percent increases on selected baking products, including flour and baking mixes, spokeswoman Kirstie Foster told Twin Cities Business. She described the baking products increases as “mid-single-digit, on average.”
The move is in response to recent surges in commodity costs, which have hit food manufacturers hard in recent years.
“Costs have increased on a number of inputs,” including key grains, Foster explained. “We have stalled the price increase on our brands for several years.”
Food manufacturers nationwide are being forced to choose between passing along costs to retailers or seeing their profits dwindle.
Supermarket operators who buy General Mills' products for their shelves will ultimately determine how much, if any, of the price increases will be passed along to consumers. Those retailers-which have struggled to get customers through their doors amid tightened consumer spending-will need to make a similar decision about whether to raise shelf prices or sacrifice profits in order to maintain low prices.
Foster estimates that General Mills has about 60 cereal brands. Some of the most well-known brands include Cheerios, Kix, Chex, Fiber One, Lucky Charms, Total, Wheaties, and Trix. She wouldn't reveal which brands will see price hikes but said that the cereal-price increases “represent about one-fourth of our cereal volume.”
The cereal-brand price increases will go into effect November 15, and the baking-product price bumps will take effect January 3.
Foster said that General Mills has been working to improve its productivity and cut costs in order to offset increases in commodity prices-and the company will continue on that path going forward.
General Mills is Minnesota's seventh-largest public company based on its fiscal-year 2009 revenue, which totaled $14.7 billion. The company reported $14.8 billion in revenue for its 2010 fiscal year.