General Mills expects lower organic net sales in fiscal 2026 despite “meaningful progress” enhancing its brand “remarkability” as cash-strapped consumers spend less on snacks and cereal, company executives told investment analysts gathered at the Consumer Analyst of New York annual conference on Feb. 17.
The announcement caused General Mills’ share price to slip from $46.51 at the opening bell on Tuesday to $43.72 by mid-day, and yet, the maker of Cheerios, Pillsbury and Nature Valley packaged foods will not change course. Rather, it is doubling-down on its strategy to deliver more value through its five-prong “Remarkability Framework.”
CEO Jeff Harmening explained investments in the framework, which includes product, packaging, brand communication, omnichannel execution and compelling value, has “resulted in encouraging improvement in our competitiveness through fiscal 2026.”
For example, in North American Retail, the company is gaining or holding pound share in eight of its top 10 categories year to date, and its retail volume has improved from down 4% in the first half of fiscal 2025 to down just 0.5% so far in Q3 of fiscal 2026, he said.
Despite these gains, General Mills expects organic net sales to fall between 1.5% and 2% for the fiscal year – even lower than previous expectations that full year sales would be down 1% to up 1%, Harmening said.
What’s behind falling sales?
Harmening explained, the company’s “improved competitiveness has come against a challenging operating backdrop, characterized by historically low consumer sentiment, heightened uncertainty and significant volatility.”
This stems from the cumulative impact of inflation, reduced government-funded food assistance, geopolitical uncertainty and other factors that “have led to significant consumer stress, especially for the middle and lower-income groups,” he said.
“We are seeing financially stressed consumers buying more of their products on promotion and less at everyday prices, despite the fact our frequency and depth of promotion are broadly in line with a year go,” which has “led to a more costly mix of volume this year,” he added.
“These factors have translated to year-to-date category growth that has been below our initial expectations, most notably in cereal, snacks and dog feeding, though we have seen some improvement in each of these categories in our Q3,” he said.
These setbacks are why Harmening said General Mills will stay the course.
“The prevalence of financially stressed consumers only reinforces our view that working to bring consumers more value is the right approach. It is important to reinforce that price is just one aspect of how consumers define value. Our approach is more holistic, delivering value through all five elements of our Remarkability Framework,” he explained.
How General Mills will leverage AI to accelerate innovation
Within the guardrails of the Remarkability Framework, General Mills plans to drive sales through innovation – not just of products but also key processes, thanks in part to new AI applications.
“One of the most significant ways we’re driving remarkability for consumers this year is through innovation,” including “innovating how we innovate, by investing in our capabilities to deliver bigger, more impactful ideas that resonate with consumers,” Harmening said.
“For example,” he said, “we’re now leveraging artificial intelligence to support new product development, from using digital personals to better understand consumers and customer problems, to image generation that creates prototypes in seconds, to conversation tools that can get real human consumer feedback faster than ever,” he said.
3 consumer trends General Mills bets will drive sales
The company will focus these tools on innovations in three trends that Harmening said are driving growth in food today, and which he said will help net sales from new products climb roughly 25% in fiscal 2026.
The first is bolder flavor.
“With more than 60% of US consumers being more likely to buy food with spice or heat,” General Mills is amping up flavors across its Totino’s, Old El Paso and Chex Mix brands, he said.
In 2026, the company plans to launch spicy dill flavored Chex Mix, Old El Paso Birria Taco Kits and Tabasco co-branded taco shells as well as an Old El Paso Taco Sauce. It also plans to reboot production of La Tiara taco shells and taco spice seasoning.
The second consumer trend General Mills is banking on to deliver growth in 2026 is better-for-you products with added functional benefits, Harmening said.
“We saw great results in the first half of 2026 with new items like Cheerios Protein,” which laid the foundation for the company to lean into “ better for you benefits and GLP-1-friendly products, with innovation focused on protein and fiber, including Honey Nut Cheerios Protein, Ghost Performance nutrition bars, Annie’s Nature Pals with fiber, and multiple new lines of granola,” said Dana McNabb, group president for North America Retail and North America Pet at General Mills.
She added, “we’re not just launching new products, we’re also stepping up our product superiority with a broad slate of renovations across our portfolio. We’re improving taste, nutrition, ingredients and packaging in ways consumers can see and feel, like Protein One and Fiber One GLP-1 renovation.”
The third consumer trend General Mills will innovate to meet in 2026 is “familiar and fun,” according to Harmening.
“We are seeing increased demand for familiar and fun food experiences that help consumers find joy and comfort amid ongoing uncertainty,” he explained.
To that end, the company is launching innovation in Pillsbury, Haagen-Dazs, Gushers and Mott’s.
Innovations will be complemented by renovations, including “progress against our commitment to remove certified colors from our portfolio by the end of 2027,” McNabb added.
‘Packaging is one of the most powerful levers we have’
To help more consumers tap into that fun, the company also is investing in additional pack sizes.
“Packaging is one of the most powerful levers we have to strategically drive volume growth and price mix appreciation,” explained McNabb.
To that end, she said, the company will offer a range of packs to “give consumers genuine choice, from entry price points when wallets are stretched, to small sizes that deliver for GLP-1 diets, to more premium trade-up formats for consumers seeking value beyond just price.”
It’s Chex Mix tubs have been more than 60% incremental to the salty snacks category, or new Gushers packaging is driving new occasions and high-single-digit volume growth this year.
