General Mills Chief Executive Ken Powell is set to retire this summer after a decade of steering the cereal giant. He will be succeeded internally by Jeffrey Harmening, who most recently served as president and chief operating officer.
The Cheerios, Yoplait and Annie’s food maker on Wednesday said that Harmening, 50, a 23-year veteran of the company, had been elected by the board to ascend to the CEO post effective June 1. He also was elected to serve on General Mills’ (GIS) board. Powell, meanwhile, will remain chairman for the transition period until his retirement, which is expected to occur within the next year. Powell is 62 years old.
Harmening most recently steered the company’s U.S. retail business, which has had to confront a major shift in consumption patterns as Americans eat more fresh foods, organics and look for “clean” labels. To confront those trends, General Mills has reformulated legacy brands like Cheerios (going gluten free) and also removed artificial ingredients from brands like Yoplait. It has also inked some critical acquisitions to get more on trend with what consumers want, scooping up natural pasta and snacks brand Annie’s and meat snack maker EPIC Provisions. General Mills also unveiled a venture capital arm in the fall of 2015 to invest in food startups, keeping an eye on further innovations in the space.
But like many Big Food makers, sales growth has been a challenge for General Mills in recent quarters as consumers increasingly favor healthier foods and buy brands crafted by startups. The U.S. business has been particularly stung by slumping, double-digit declines in the yogurt aisle. Sales have also been weaker for the company’s cereal, snacks, and meals & baking. General Mills has lamented that the grocery aisle has seen too much discounting of late while also admitting it didn’t do enough to compete on price. Sales have also been hurt by the loss of about $550 million in annual sales from the Green Giant, which was sold to B&G Foods (BG-FOODS-INC).
Harmening joined General Mills in 1994 and helped steer a variety of General Mills businesses, including the Big G cereal division. He also held a variety of marketing roles for big brands like Betty Crocker and Yoplait. He had served as president and COO since last summer. His total compensation last year was $3.6 million, while Powell was paid $11 million as CEO. General Mills hasn’t yet disclosed Harmening’s new compensation package.
The change at the top at General Mills is one of several the Big Food industry has seen in 2017. Coca-Cola (KO) and Hershey (HSY) both made changes this year, and like General Mills, each turned to insiders for their next leaders. All three of the new CEOS will need to steer their companies at a time when some have speculated mergers could be on the table as the industry confronts softening sales trends.