General Mills’ North America Retail President Jon Nudi joins Yahoo Finance’s The First Trade with Alexis Christoforous and Brian Sozzi to chat about how the company plans to grow.

Video Transcript

BRIAN SOZZI: Shares of General Mills are in focus right now after the company beat expectations in its latest earnings report, announced last week, General Mills North America Retail President John Nudi joins us now. John, good to see you again here. So many different places we can start, but let me start with this. I've been hearing a lot of grocery stores starting to stock up products in anticipation of a second wave of COVID-19. What are you hearing from grocery stores right now?

JON NUDI: Hi, Brian, good morning. Thanks for having me. Well, it's been definitely a ride over the last six months, obviously, as we've moved through the pandemic. As we moved through the summer, we did see some of our categories slow a bit from some of the heightened trends we saw during the spring. We have seen those categories pick back up, though, over the last few weeks, I think, as families have gotten back into the back to school routine here. I think, as outdoor dining winds down in some parts of the country, we're seeing categories pick up.

At the same time, we're seeing retailers maybe bring in an extra day or two of supply or inventory into their warehouses, so we're operating full steam ahead right now. Our plants are running full out. They have really since the beginning of the pandemic, and there's actually some categories that we haven't been able to catch up. Things like soup and some of our baking mixes, we've seen such elevated demand. It's going to be quite some time, a few months before we get back into a normal routine.

ALEXIS CHRISTOFOROUS: Yeah, if it's anything like my house, we're continuing to bake here too during this pandemic. But I want to talk about the pet business, because you acquired Blue Buffalo Pet Products about two years ago. I know sales have been soaring there. You also have new pet owners. What is that demand for those products been like, and have you seen that plateau over the past couple of weeks?

JON NUDI: Yeah, hi, Alexis, so you know, with pets, it's interesting. I mean, they obviously don't change how much they eat, and consumers, you know, pet parents don't like to change the meal plan for pets either. Once they get into a pet food, it's hard to change. So we saw a spike in pet, you know, sales really through the spring, but we saw some of that, you know, wind down as we moved throughout the early part of the summer, because, again, pets really continue to eat just about the same amount regardless of whether there's a pandemic or not. So we love all Blue Buffalo. It's a great brand. It's a premium brand. It continues to grow share across almost every channel, like pizza, and it's growing nicely, you know, mid-single digits throughout our first quarter.

BRIAN SOZZI: John, my sense has been that big food has now started to dabble once again in product innovation. Certainly, it's slowed at the height of the pandemic, but now things are getting to some back to some form of new normal. What are some of the crazier products you're testing out right now?

JON NUDI: Yeah, I don't know if we have anything that's crazy. We would feel really good about our innovation. At the end of the day, you know, consumers are always looking for new things and looking for, you know, new foods that taste great. And we've continued, actually, we never backed off on our innovation. So as the pandemic went on, we continued to introduce new products, and we're seeing great success. In fact, in cereal, we have three of the top three new products introduced in the last six months, Cinnamon Cheerios and some other great products as well.

You know, we're seeing some trends continue as well. So Keto and really low carb and low sugar is a trend that we're seeing. We launched a new line called Ratio with Ratio bars as well as Ratio yogurt, very low in sugar and very much fitting into the Keto lifestyle, and that's off to a great start. So innovation we think is critically important, whether you're in a pandemic or not, and we've got to stay focused on making sure we've got a great line-up.

ALEXIS CHRISTOFOROUS: Now, this is exciting for those who can remember back to the 1980s, General Mills is going to bring back some classic cereal recipes. Tell us about that. Is there a twist on these recipes? What's going on?

JON NUDI: You know, at the end of the day, it's about giving consumers what they want, and that's a great tasting cereal. And many of these cereals, again, are kid-focused and, you know, it's really taste driven. So we've learned a lot of the last few years. We went through a phase where we actually took a lot of things out of our cereals, and in some cereals, that makes perfect sense. Obviously, if you're eating Cheerios, you want it to be, you know, low in sugar and very simple.

But if you're eating a bowl of Golden Grahams, well, you want it to taste great. So we actually went back to the way our cereals were in the 80s, which we knew were, at the time, that our cereals really delivered on taste and that we're really growing nicely. So we moved back, and it's a permanent move. We're going to keep those cereals with their original recipes, and we've seen a lot of excitement from consumers. A lot of people trying those brands for the first time or the first time in quite some while.

BRIAN SOZZI: John, before we let you go, snack bars-- is that business still under pressure?

JON NUDI: No, it is. I would say the category is under pressure. So if you think about what's a growing in grocery stores, it's the categories that, you know, are consumed at home. And if you think about snack bars, like many of those occasions are actually away from home, so the category slowed. You know, we've been really focused on our business. It's been a category that's been a little bit slow for us compared to our shared trends versus the category. We've invested in our brands like Nature Valley as well as Fiber One and actually held share through the first quarter of our year, which we feel really proud of.