In keeping with a very long-standing tradition that has lasted over 40 years, we turn to General Mills for the first presentation of the conference. Implicit within the word tradition is the idea that conditions remain constant or unchanged, and that certainly pertains to General Mills in relation to the quality of its products and the values behind its brands, and even in the consistency of results, which are evidenced in this morning's press release. At the same time, it has been said that the only constant in life is change, something that General Mills has embraced in the most positive sense of the phrase.
The company continues to grow its investment in brand building and innovation, and more recently, has invested significantly to build its digital and technological capabilities, all informed by consumer insights and funded by a strong track record of cost savings through a robust supply chain and Holistic Margin Management productivity program. This is complemented by an always-on M&A strategy that has resulted in a steady stream of portfolio reshaping activity over the past several years. With us here today to update us on the strategic progress behind those efforts are Chairman and CEO, Jeff Harmening, and CFO, Kofi Bruce. Please join me once again in thanking General Mills for a delicious breakfast and welcoming Jeff Harmening to the podium to kick us off.
Thanks for that introduction, Tim. I really appreciate it, and greetings to everyone here and listening on the webcast. It is a pleasure to be here, and on behalf of the full General Mills organization, we are honored to kick off the CAGNY Conference once again. I'm joined on stage by our Chief Financial Officer, Kofi Bruce, and our Vice President of Investor Relations and Treasurer, Jeff Siemon. I'd also like to thank Mike Siemienas, Haseeb Saddique, and Chelcy Walker, as well as Sue Rhodes, who did a terrific, terrific job supporting our presentation and pulling together this morning's delicious breakfast. Before we get started, I'll remind you that our remarks today include forward-looking statements that reflect our current views and assumptions. This slide and the supporting presentation on our investor relations website list factors that could cause our future results to be different than our current estimates.
I'll begin by sharing three messages I hope you take away from today's presentation. First, our Accelerate strategy has driven strong results and return for our shareholders. Second, while we are navigating short-term headwinds, we are continuing to invest in our leading brands and capabilities to deliver long-term, sustainable growth. Third, General Mills is very well-positioned to translate that growth into top-tier value creation for our shareholders. During our remarks this morning, I'll review our Accelerate strategy, the strategic choices we've made on where we play and how we compete, and how we've driven strong results in recent years despite a volatile operating environment. We'll then take a deeper dive into the current business landscape, our beliefs about the future, and how we expect to continue to drive long-term growth in a more stable consumer environment.
Finally, Kofi will explain how executing our strategy is driving strong shareholder returns and how we will continue this momentum going forward. General Mills' purpose is to make food the world loves, and we have been fulfilling this purpose for more than 150 years. We've grown to a $20 billion company with nine iconic billion-dollar brands. We are the number one provider of natural and organic packaged foods in the United States, and we are an employer of choice, attracting great talent and recognized by external rankings, and more importantly, by our employees, as a great place to work, grow, and belong. I am tremendously proud to lead this company and to do so with a strong team of leaders across our segments, our global functions, and our capabilities.
With a commitment to developing our leaders, we have made some recent changes to strengthen our team and our business. Jon Nudi will leverage his experience and success in North America Retail and bring it to a new role as Group President, leading our Pet, International, and North America Foodservice business segments. Dana McNabb has had great success in running our U.S. Cereal and Snacks operating units, leading our Europe and Australia segment, and most recently, as our Chief Strategy and Growth Officer. Dana is now taking over as Group President, leading North America Retail, where she'll look to continue driving growth in our largest and most profitable business segment. With these changes, we've elevated Ricardo Fernandez and Pankaj Sharma to segment president roles on my leadership team.
These changes reflect the strength of our senior talent across General Mills and position our leaders in key businesses to advance the next chapter of our Accelerate strategy. Grounded in our purpose to make food the world loves, our Accelerate strategy is centered on choices we've made about where to prioritize our resources to drive top-tier shareholder returns. We expect these choices, including where we play and how we create competitive advantages and win, to result in long-term value creation with consistent sales growth, margin expansion, cash conversion, and cash return to shareholders. Our choice- choices on where to play center on product platforms and geographies, where we have unique advantages and a right to win. From a product platform standpoint, our portfolio of more than 100 brands delivers against a wide variety of consumer needs across multiple occasions.
We are focused on driving growth on our strategically advantaged global platforms of cereal, pet food, snack bars, Mexican food, and ice cream. These platforms make up roughly 50% of our worldwide net sales base and offer attractive global growth potential and strong margins. Outside of these five platforms, we also have several local gem brands like Pillsbury, Totino's, and Wan Chai Ferry, that make up another 30% of our net sales and have attractive growth potential in a more limited geographic scope. From a geographic standpoint, we're focused on eight core markets, with our number one priority being North America, which represents nearly, roughly 85% of our fiscal 2023 net sales and an even higher proportion of operating profit. Beyond North America, we prioritize China, Brazil, the UK, France, Australia, and India, where we have the scale and infrastructure to drive profitable growth.
We also continue to evolve our portfolio. We've turned over almost 20% of our net sales base since fiscal 2018, including the acquisitions of Blue Buffalo, Tyson Pet Treats, and TNT Crust, as well as the divestitures of European Yogurt and Dough and the North America Helper and Suddenly Salad businesses. This portfolio reshaping work has increased our enterprise growth exposure by more than a full point, so that in a stabilized demand environment, holding share across our mix of categories and geographies would generate organic net sales growth that is squarely in the middle of our 2%-3% long-term target. Our strong track record of competing effectively, reshaping the portfolio, and driving efficiency in our operations in recent years enabled us to deliver results that were in line with, or in certain cases, exceeding our long-term growth expectations.
Between fiscal 2018 and fiscal 2023, we generated compound annual growth of 5% in organic net sales, 6% in constant currency adjusted operating profit growth, and 7% in constant currency adjusted diluted EPS. As we've moved into fiscal 2024, industry volumes have been slow to rebound as pricing moderates, reflecting a normalization of elasticities as consumers adjust to the impact of significant inflation over the past two years. Additionally, rapid improvement in the supply chain environment has enabled smaller competitors to get back on shelf more regularly, which has been a competitive headwind in many of our categories. As we shared on our most recent earnings call, these short-term challenges are driving a more subdued top-line outlook for our business in fiscal 2024.
At the same time, we're generating increased levels of Holistic Margin Management cost savings this year, now at 5% of cost of goods sold, enabling us to maintain strong levels of investment in the business while still driving healthy margin expansion. As you saw in our press release this morning, we reaffirmed our expectations for fiscal 2024 financial results, including organic net sales ranging between -1% and flat, and adjusted operating profit and adjusted diluted earnings per share growth, both growing 4%-5% in Constant Currency. As we continue to navigate this dynamic environment, we are paying close attention to the factors influencing consumer demand and the health of our supply chain. For example, global inflation has given rise to increased value-seeking behaviors by consumers, including a shift toward value-oriented channels, smaller basket sizes, and increased consumption of leftovers.
Additionally, geopolitical uncertainty and the increasing frequency of climate events are creating incremental headwinds for our consumers and in our supply chain. At the same time, we are starting to see some positive indicators in certain areas. Inflation is moderating across many global economies. Supply chain disruptions are down significantly, driving improvement in service and efficiency. And here in the U.S., consumer confidence reached a two-year high in January, supported by wage growth and a strong labor market. As I think back over the past five years, one of the things I'm most proud of is how we've changed our portfolio, our capabilities, and our structure to better adapt to an ever-changing business context.
While we're not immune to changes in the operating environment, I am confident that we're better positioned than ever to respond more quickly and more effectively to those changes and to deliver strong results. In a world of ongoing volatility, it is critical that we maintain focus on the things we can control to drive long-term sustainable growth. We'll do that by executing on the four key pillars of our Accelerate strategy, boldly building brands, relentlessly innovating, unleashing our scale, and continuing to stand for good. We are putting our strategy into action with an eye toward the trends that we believe will define the consumer environment going forward. First, we see a continued demographic shift toward increasingly diverse, smaller, and older households. Second, we believe that the humanization of pets will remain the largest driver of growth in the pet food category.
Third, technology advancements, including digitization and AI, will continue to permeate both how we work and how we interact with consumers. Fourth, climate impacts and change will continue to grow in importance on the agendas of our consumers, our customers, our employees, and our investors. With this in mind, let me take you through the pillars of our Accelerate strategy and how we are addressing these macro trends today to drive sustainable, profitable growth over the long term. We're proud to have a portfolio that includes nine iconic brands that each generate more than $1 billion in retail sales. We've been boldly building brands throughout our company's long history, and we're continuing to grow our investment behind strong campaigns, like Cheerios Heart Health, Making Memories with Pillsbury, and Winning on Game Day with Totino's.
In fact, we increased our media investment by 41% from fiscal 2018 to fiscal 2023, and it was up high single digits through the first half of fiscal 2024. We feel good about the support we have in place to continuing to deliver bold, relevant, and modern messages that resonate with today's consumers. Let me share a quick video that features some of our recent brand-building campaigns. Can you please go ahead and roll the video?
Oh, yeah! Who wants what?
We have got a real treat for you. This TikTok hack, ice cream and Fruit Roll-Ups.
As you can see, we continue to deliver brand-building ideas that connect with consumers today. For example, with more than 100 million Americans having some form of heart disease, Cheerios is sparking meaningful conversations around the topic of heart health with loved ones and the role whole grain foods can play in helping to lower cholesterol. The brand's Hearts campaign is bringing back its popular heart shapes with limited edition offerings and personalized boxes for the whole family. We are also focused on building platforms, messaging, and activations that connect our brands with the passions and preferences of key consumer segments. For example, we're using our Qué Rica Vida online recipe platform to uncover, celebrate, and share the best of Latino food culture for U.S. consumers.
Our Mott's team launched a bilingual Snacks and Storybook campaign with the help of actor and producer Eva Longoria, to encourage reading and advance access to books across the country. Our Totino's brand aired a Spanish-language ad during Univision's inaugural broadcast of the Super Bowl earlier this month. Blue Buffalo is a brand built around the idea that if you love your pet like family, you should feed your pet like family. The humanization trend and emphasis on quality ingredients has made Blue Buffalo the most loved, trusted, and recommended natural pet food brand in the category. The Blue Buffalo brand remains strong, and our refreshed ad campaign is capitalizing on the opportunity to more effectively communicate with pet parents on the benefits of superior ingredients found in our Life Protection Formula line. Let me show you what that looks like.
Let's go ahead and run the spot.
Blue Buffalo, huh?
Yeah, Purina ONE.
Yeah.
I used to feed Purina ONE, but then I read the ingredients.
Oh, yeah?
Yeah, it's right there. Chicken, rice flour, corn gluten meal, whole grain corn, chicken by-product meal.
What's in Blue?
Deboned chicken, chicken meal, brown rice, barley, oatmeal.
Yeah, but those ingredients cost a lot more.
Blue is only about $0.50 more a day. That's not too much for my Chester.
These ingredient superiority messages are resonating with pet parents, reinforcing the benefits of our True Blue Promise. With the benefit of this renewed messaging, we're seeing improved volume momentum on our Life Protection Formula sub-line, with retail pounds having grown at a high single-digit rate for much of the past quarter. In addition to boldly building our brands, we are focused on relentlessly innovating to bring joy and solve consumer problems. At General Mills, we think of innovation on a spectrum, from developing new products and platforms within our established brands, to an expansion of our core to new segments and geographies, to portfolio reshaping through scaled M&A, as well as creating new vectors of disruptive growth through Gold Medal Ventures.
Supply chain disruptions over the past few years have had a broad impact, from the ability to service customers, to driving cost productivity, as well as our ability to deliver meaningful scale in our innovation. In fiscal 2024, we have increased our level of innovation versus last year, and we expect it to be a larger contributor to our growth as we move forward. Our category-leading innovation in U.S. cereal is a great example of the success we're having. Our Minis platform continues to deliver incremental growth for our brands. In fact, Reese's Puffs Minis, Cinnamon Toast Crunch Minis, Trix Minis, along with Kit Kat Cereal, make up four of the top five new products in the U.S. cereal category this fiscal year.
We are adding to the success with recent new launches, including a new loaded platform, which delivers a new way to enjoy consumer favorite brands like Cinnamon Toast Crunch, Cocoa Puffs, and Trix, but loaded with delicious vanilla cream. New varieties of Cheerios, like Veggie Blends and Heart Healthy Medley, and a new Reese's Peanut Butter Lovers Cereal with a double dose of fan-favorite peanut butter puffs. At more than 20% of our global net sales, snacks is our single largest product category, and we continue to bring exciting innovation to a variety of snacking occasions. On snack bars, we launched a new Nature Valley protein smoothie line with 10 g of protein per serving, and we're bringing new sizes and formats to our Treat Bars lineup. On hot snacks, we've added new mealtime favorite offering, orange chicken, to our Totino's Pizza Roll portfolio.
On Go-Gurt, we partnered with Crayola to enhance the fun of the on-the-go yogurt with the bright new yogurt colors and creative activities for kids. On ice cream, Häagen-Dazs has entered the snackable ice cream occasion with the launch of Bites, delivering super premium indulgence in an irresistible snack-size format. We're also innovating across meal occasions in our U.S. Meals and Baking operating unit. We're driving awareness for Old El Paso brand by partnering with NFL stars J.J. Watt and Justin Jefferson to launch limited edition dessert tacos blasted with Cinnamon Toast Crunch's iconic Cinnadust. We're innovating to meet evolving consumer weight management and nutrition needs by packing more protein into our Annie's Mac and Cheese through a new Super Mac offering, launching a protein-forward Progresso soup line, and bringing lower sugar offerings to our Betty Crocker cakes, cookies, and brownies.
We're solving problems and saving time for consumers and food service operators through a Pillsbury line of cut-and-squeeze bread batters and a freezer-to-oven chocolate croissant offering, which I hope many of you were able to sample at this morning's breakfast. In the pet food category, humanization was historically driven, has historically driven category growth and premiumization. As we emerge from more challenging near-term consumer dynamics, we are confident that humanization will be at the forefront as pet parents continue to love their pets like family and look to feed them like family.
With our premium portfolio of dry feeding, wet feeding, and treats, Blue Buffalo is positioned to win with pet parents over the long term, and we are continuing to drive the humanization trend this fiscal year with new product offerings, including seasonal treat offerings, so pet parents can share the joy of holiday gift-giving with their furry family members. A convenient singles pouch with new Tastefuls Purées to serve as snacks, toppers, or treats. And the acquisition of Fera Pet Organics, which gives us access to the fast-growing $2 billion pet supplement category. Outside of North America, we recently expanded the Blue Buffalo brand into China, the world's second-largest pet food market, with approximately $8 billion in retail sales in 2023.
It's a category that's been growing at a double-digit rate over the past five years, and we believe Blue Buffalo is well positioned to accelerate the emerging humanization trend in this market. Continuing on the spectrum of innovation, we see always-on portfolio reshaping as a critical part of our ability to innovate, and we have a strong track record due to our disciplined approach to scaled M&A. We are vigilant in our assessment of where acquisitions can create value for shareholders and improve our growth exposure, and we remain focused on new areas where we feel we have a unique and durable competitive advantage, with an emphasis on our global platforms and local gems in our core markets.
Our portfolio reshaping activity over the past five years has increased our enterprise growth exposure by about one point, and we would like to drive another 50 basis points of growth accretion to further expand through further acquisitions and/or divestitures. We are also unlocking new audience and solving new consumer challenges through our disruptive growth organization, which we call Gold Medal Ventures. This group takes a build, invest, and acquire approach to entering new growth spaces. In G-Works, we are focused on building new businesses from within our organization using small co-founder teams to rapidly test and scale white space innovation. In 301 INC , we make minority investments in early-stage food businesses to fuel their growth. Through Gold Medal Ventures growth equity fund, we are acquiring and scaling smaller-scale businesses that could have the potential for future integration into our core portfolio.
Over the past five years, we've made significant investments to build a world-class digital and technology infrastructure that positions General Mills to unleash our scale for growth and profitability. Since 2018, our team of data scientists has increased 40-fold, and we've grown from running 2,000 models per month to running more than 6 million models that generate more than 500 million individual predictions on a monthly basis. Let me take a moment to share a few examples of how our investment in technology has unlocked opportunities in the areas of e-commerce, data-driven marketing, and supply chain, supply chain digitization. General Mills is winning online with superior execution at the digital shelf. For example, with the launch of Cheerios Veggie Blends, we focused our efforts on search, content, and reviews to boost awareness and encourage trial.
First, we optimized search to ensure Veggie Blends appeared as top results for consumers looking for cereal or Cheerios. We also optimized our visual real estate to communicate key product benefits, including one-fourth cup fruit and veggies per serving, gluten-free, and 100% recyclable packaging. And we worked with external partners to drive trial that would generate early ratings and reviews. As a result, Cheerios Veggie Blends is now turning in the top third of U.S. cereal category where it's on shelf. Applying a consistent, structured approach to winning online across our portfolio has enabled us to rapidly grow our e-commerce business. In fact, excluding pet food, only 4% of our U.S. retail sales came from e-commerce channels prior to the pandemic. Today, that figure is in the mid-teens, and it's double the level of the broader food and beverage industry.
Our market shares online continue to outpace our shares in brick-and-mortar outlets, and with a disproportionate amount of food industry growth projected to come from e-commerce over the next five years, we are well positioned to capture outsized growth in this important consumer space. We are also winning online through deepening our personalized connections and engagement with consumers. Through platforms like BettyCrocker.com, Pillsbury.com, Good Rewards, and Box Tops for Education, we engage directly with more than 16 million consumers each month, and we expect to see that number grow as we've recently begun to integrate Blue Buffalo into our Good Rewards program. With these first-party capabilities, we are able to narrowly define specific target audiences, deliver personalized content, and use incentives to drive purchase behavior, therefore, improving our overall marketing effectiveness. Let me share an example that illustrates the effectiveness of our data-driven marketing.
For our Nature Valley brand, we leverage data to specifically target buyers of private label grain bars. Using our digital capabilities, we rapidly create, deliver, and iterate value-oriented messaging to test what resonates best with our targeted consumers. Based on this message testing, we can deliver optimized incentives to drive purchases of Nature Valley products. As a result of this personalized and iterative approach, we've seen a high single-digit lift in our Nature Valley advertising effectiveness and have now expanded this approach to nearly 70% of our Nature Valley spending. Our investments in digital and technology capabilities are also creating efficiencies in our supply chain. General Mills' superior supply chain performance, resilience, and accelerated levels of holistic margin management cost savings have been enabled by digital capabilities we've built across our supply chain.
For example, in our sourcing organization, we're using data and enhanced external monitoring linked directly to our systems to predict and manage upstream disruptions in our supply chain. In manufacturing, our line operators have access to real-time performance data that allows them to optimize throughput, reduce cost, and minimize waste. In our logistics network, we're using AI to connect data across customer orders, supply disruptions, and inventory levels to ensure that we have the right product in the right place at the right time. This integration of AI has resulted in higher levels of customer service, reduced warehouse and transportation costs, and fewer trucks on the road each year. Stepping back, we are at a transition point in our journey to in unleashing our scale for differentiated performance through digital capability.
Having spent recent years investing to build a best-in-class digital infrastructure, we're now beginning to capitalize on that investment through use cases such as e-commerce, data-driven marketing, supply chain digitization, and many others. I'm very encouraged by our progress, and I am confident that our digital capabilities will be a source of meaningful competitive advantage for General Mills over the long term. The final pillar of our Accelerate strategy and how we will win is by standing for good. Doing good and good, and good business have gone hand in hand for General Mills throughout our history, and this mentality is a central part of our company culture today. Our standing for good work is focused on improving food security, protecting our people, strengthening our communities, and regenerating our planet.
We continue to lead the industry in advancing regenerative agriculture, one of our 10 prioritized commitments, by partnering both upstream with farmers and local conservation groups, as well as downstream with our retail customers. I am proud to share that we are already halfway to our 2030 goal, with more than 500,000 acres currently engaged in regenerative agriculture programs. I hope that provides you with a clear picture of how we're leveraging brand building, innovation, scaled capabilities, and a commitment to standing for good to create competitive advantage for General Mills to drive consistent, profitable growth. I'll now hand it over to Kofi to talk about how we're translating that growth into attractive returns for our shareholders over the long term.
Thanks, Jeff, and good morning, everyone. I'm extremely proud of the progress we've made in recent years to navigate a dynamic operating environment and advance our growth agenda at the same time. Let's now spend some time walking through the shareholder return model and how we're translating our Accelerate strategy into sustainable value creation for the long term. We are focused on executing against four levers to drive top-tier shareholder returns: sustainable sales growth, margin expansion to go profit faster than sales, capital discipline to convert earnings to cash, and then returning cash to shareholders through dividends and share repurchases. We regularly measure performance on each of these four levers. More specifically, we aim to consistently generate 2%-3% organic net sales growth.
With modest margin expansion, we look to achieve mid-single-digit growth in constant currency, adjusted operating profit, and from there, we target converting 95% of adjusted after-tax earnings into free cash flow. Finally, we aim to return approximately 80%-90% of free cash flow to shareholders through dividends and share repurchases, resulting in mid- to high-single-digit constant currency, adjusted earnings per share growth and top-tier total shareholder returns. Sales growth is the foundation of our shareholder return model, and as Jeff shared earlier, guided by our Accelerate strategy and strategic choices on where to play and how to compete, we have exceeded our long-term target and generated 5% compound annual growth in organic net sales over the past five years. Shifting to margin expansion, General Mills has built an industry-leading capability in holistic margin management.
Our consumer-first cost savings program that leverages continuous improvement tools to eliminate waste in our products and our processes. The key to our continued success in HMM is that we've embedded it in our culture. HMM is not simply a supply chain productivity exercise. It's driven by brand teams with strong cross-functional ownership that engages marketing, finance, R&D, sales, and of course, supply chain. These teams develop multi-year cost savings pipelines informed by consumer insights and enhanced by our digital capabilities. The result has been an enviable track record. General Mills has leveraged our HMM capability to consistently generate savings of 4% of cost of goods sold for more than a decade through fiscal 2021.
The pandemic and subsequent supply disruptions were a headwind to our HMM delivery over the past two years, but as global supply chains have stabilized, we've made good progress in increasing the efficiency of our supply chain and accelerating our HMM pipeline creation. As a result, we now expect HMM cost savings of approximately 5% of cost of goods sold in fiscal 2024, and we're seeing a strong pipeline of opportunities that gives us confidence that we'll be able to continue driving HMM cost savings of at least 4% beyond the fiscal year. Our HMM performance has been an important contributor to our margin recovery story.
By stepping up our HMM cost savings, removing disruption-related costs from our supply chain, and deploying our strategic revenue management capabilities, we have now almost fully closed the gap to our pre-pandemic adjusted gross margin, which is something very few of our competitors can say. We've done the hard work to restore our gross margin, and we are in a stronger position to reinvest in our brands and capabilities to drive future top-line growth. With mid-single-digit organic net sales growth and strong margin performance over the past five years, we have generated 6% annual compound growth in adjusted operating profit and constant currency, which is at the upper end of our long-term and mid-single-digit goal.
The third lever of our shareholder return model is converting earnings to cash, and we've delivered tremendous performance on core working capital management for more than a decade, including generating nearly $1 billion in additional cash since fiscal 2018 through lower core working capital balances, driven by a focus on payment terms, optimization, and inventory reduction. Going forward, we see additional opportunities to drive further core working capital optimization and maintain our top-tier cash conversion cycle. Our working capital management has contributed to our strong track record of converting earnings into free cash flow. In fact, I'd argue that General Mills' free cash flow generation is probably one of the most underappreciated aspects of our company's performance over the better part of the past decade.
We've exceeded 95% free cash flow conversion in each of the past six rolling three-year periods, including the most recent period through fiscal 2023, when we generated more than $7 billion in cumulative free cash flow at a 98% conversion rate. With strong cash generation as a foundation, our capital allocation priorities reflect our thoughtful approach to utilizing cash to drive attractive returns for shareholders. Our first priority for cash is in investing back into the business for growth and future cost savings, with capital expenditures expected to be approximately 4% of net sales over the long term. Our next cash priority is our dividend, and General Mills has paid a dividend without interruption for 125 years, and we expect to grow our dividend roughly in line with earnings over time.
After dividends, we look to deploy cash for strategic acquisitions that enhance our growth profile. We've significantly reduced our leverage since the Blue Buffalo acquisition, and we closed fiscal 2023 with a net debt to adjusted EBITDA ratio of 2.7x, providing us with ample flexibility to pursue growth and value accretive M&A. Our final capital allocation priority is share repurchases. Using excess free cash after dividends and M&A needs, we expect to drive 1%-2% annual reduction in our net share count over a multi-year timeframe. In fact, between fiscal 2018 and fiscal 2023, these capital allocation priorities allowed General Mills to return more than $10 billion to shareholders through dividends and net share repurchases, even after deploying significant cash to fund Blue Buffalo and other strategic M&A needs.
By driving strong top-line growth, operating efficiency, and cash conversion, and remaining disciplined on capital allocation, General Mills has generated 7% compound annual growth and adjusted diluted earnings per share over the past five years, in line with our mid- to high single-digit long-term goal. This strong operating performance, paired with an attractive dividend yield, has driven strong total shareholder returns for General Mills shareholders over the long term, including 12% compounded TSR over the past five years, which is ahead of the food peer benchmark. So let me close with a few thoughts. As we stand here today, we firmly believe that our consumers, our business, and our industry are in the midst of a significant transition. Moving out of a volatile and unprecedented period defined by the pandemic, by supply chain disruptions, and by historic levels of input cost inflation.
... and moving towards a new period that will continue to be dynamic, though perhaps at a less unprecedented scale. Our ability to stay focused on our Accelerate strategy while adapting to significant change in the operating environment led to our strong performance in recent years, and we're confident that with clear strategy, leading brands, and an agile mindset, and a world-class team, we're well-positioned to continue driving profitable growth and top-tier returns for General Mills shareholders in the years to come. With that, I think we have a few minutes for questions, and I will turn it over to Jeff Siemon to get us started.
Right. Good. We do have a good chunk of time for some questions that we can take on the webcast, and we've got some microphones coming. Let's start here with Ken Goldman in the, in the row here.
Hi, good morning. Thank you. With the understanding that it's too early for specifics around fiscal 2025, you talked about some emerging tailwinds that seemed fairly tangible, right? Moderating inflation, stabilizing supply chains, increasing U.S. consumer confidence. The headwinds that you mentioned, geopolitical uncertainty and climate volatility, you know, they seem a little more, I don't want to say vague, but sort of just broad-based. So with that context in mind and understanding that, you know, you do have some challenges still with parts of your pet food business, is there any reason at this point for us to think that your outlook for fiscal 2025 will be far afield from your long-term top and bottom line ranges as you see it?
Yeah, so thanks for that question, Ken. You know, I can't really comment too much on fiscal 2025, but the things you point out are true. I mean, as we look, I think these next three or four months will be really instructive as we look at our fiscal 2025, which begins in June. Because in addition to the environment where we see continued inflation, but a decelerating rate, driven mostly by labor, and where we see supply disruptions kind of coming down, we're also gonna be lapping SNAP benefits from a year ago, as well as pricing, and then finally, the on-shelf availability of private label and smaller players. All those things will happen in the next three or four months.
All those things would portend to more stability, you know, in the operating environment, and I certainly hope that's the case. I think when you combine that with our HMM goals, which will be 4%+, I think it puts us in a good position to do what we've always tried to do, which is to drive growth through investment in our brands, as well as delivering a good return for shareholders, and that's what we'll try to do. Whether that's on algorithm or not for the long term, we'll see when we get there. But I think what we're hoping, that this environment sets up well for us and that it's relatively low inflation and at a place where we can drive productivity and reinvest for growth.
That's kind of the plan.
Great. Let's come right here to the front, Rob Moskow.
Hi, thank you. Jeff, some of your competitors have talked more about efforts to expand into value channels like dollar stores. I didn't see much of that in the presentation today, and I want to know, are you evaluating bigger pushes into those chains in a value-seeking environment? And what do you think the pros and cons of that are?
Yeah, so, you know, one of the, one of the great strengths of General Mills has, has been our, you know, our sales organization, you know, both, both in retail, but also food service. And, you know, one of the great things, whether it's, whether it's in pet food or whether it's in one of our categories in North America Retail, we're, we already exist in, in all the channels available. So whether they're dollar stores or whether they are, wholesale clubs, or whether they're mass merchants or grocers, you know, we do pretty well across that spectrum. And so the key for us will be, as it has been, to make sure that we're looking for opportunities across our categories in each of those channels and making sure that we have consumer offerings and pack sizes.
I mean, you see, you see something like Gushers or fruit snacks, and, you know, if you, if you go into a club store, you're gonna, you're gonna see a box of, like, 500 of them, you know? If you go into a dollar store, if you see 500 of them, we've done something wrong. What you need to see is something somebody can carry away out the door. And so one of the strengths of our team is the ability to do that. And so one of the things I feel good about as we look ahead is that, you know, we'll compete effectively in all those outlets. There's, there's nothing... We just need to be at our best. There's nothing we need to do fundamentally differently than we've already done.
Great. Go here to Bryan Spillane, right up front.
Thanks. Bryan Spillane, Bank of America. So, just wanted to ask a question about investing back in the business and maybe capital allocation. You know, the last five years, there's been a pretty significant investment in digitization, kind of up and down the organization. So I guess it kind of gets me thinking about two questions. One, there's been so much change and improvement. How do you think about the incremental dollar of investment, right? Like, how much more improvement, you know, do you get from that next dollar invested? And also, how does that begin to inform the way maybe you think about acquisitions, right? You've got more capabilities, theoretically, maybe the ability to integrate a wider spectrum of businesses.
So just as we're kind of thinking about leveraging all that investment over the last few years, you know, could you just give us a sense of how you're thinking about those two things?
So let me, let me take the first part of that, and I'll touch on the second, then Kofi, if you want to add anything on, feel free. But I, you know, I would say when it comes to the, the capabilities, especially, especially digital, I'm really proud of what we've built and the foundation we've built. And, and one of the things, if you look back over the five years, you'll see that our admin costs have gone up less than sales. So we've made this transition by making trade-offs, and we're really proud of that, and we've been really effective in building our digital core. Over the next few years, there's—we've done a lot of that heavy lifting.
You know, now what you're gonna see is investment in our building out of capabilities, whether it's data-driven marketing or across our supply chain or through e-commerce or strategic revenue management. And so, I'm not sure it will have to be the same lift as it has been the last few years in terms of the amount, but the nature of it will change. I'm really excited about it. And so as much value as we've added, and we have added value over the last few years, I think we can see a step change in value add while our costs are not growing at the same rate, which is, you know, from an investment point of view, really, I think, really good. As we look at M&A, our stance on M&A hasn't really changed.
I'm hoping this environment is a good one for us in the sense that, you, you know, it's been difficult. We've looked at a lot of acquisitions, you know, potential acquisitions over the past few years, and, you know, one of the challenges has been is that, you know, buyer expectations and seller expectations on pricing have been pretty far apart. If you're a buyer, you wanted everybody to buy based on what just happened during a pandemic, and if you're a seller, you're thinking, Okay, I look ahead, and it may not be the same. As the environment evens out a little bit, and we get farther away from the disruption of the past few years, I think it sets up for a pretty good environment for, for somebody like us. We'll remain disciplined, but I think it'll remain good for us. In addition, a lot...
We, you know, we were going against—we had a lot of PE firms and things like that, looking at acquisitions the last few years, but as interest rates have risen, it's been relatively unattractive for them. But we haven't—we never lowered our standards for our investment rates because—our hurdle rates, because we're looking to buy assets for the long term. And so we've kept that the same. And so I think, I think, I think it should set up well for us, and certainly, the capabilities we've added through our digital capabilities can apply to any business that we acquire, and we're at or near the top of the food industry in most of those digital capabilities.
I think the only thing I would add is that that gives us extra space and maybe has opened the seam for greater value creation as a strategic buyer on acquisitions. So to Jeff's point, once the price expectations between sellers and buyers move closer together, I think we're advantaged to play, and-
On [uncertain] , do you think more things now than you were earlier?
Well, I think to Jeff's point, I don't know that our posture has changed, and we frankly have continued to look throughout the whole cycle. So we're gonna continue to look, I think, even as we're trying to stay disciplined on value.
Okay, maybe one behind you there, Tom Palmer.
Thanks. Tom Palmer, Citi. Wanted to ask on the slide you had with the volume inflection for Life Protection Formula and maybe some of the changes that you've instituted in terms of messaging for that brand, 'cause it is pretty dramatic inflection. And I know, you know, that maybe there was a little weather there, although I don't know how much it affects pet. But the marketing campaign, is that a new push from a dollar spend? Is it mostly a change in messaging, where they're kind of new on-shelf availability or prominence of the product on shelf that helped drive that? Just trying to understand, because it is a pretty dramatic inflection.
Yeah, so, really pleased with the results we've seen from that campaign. I don't think it's weather-related. I mean, I think this one's pretty straight-up messaging. And it hasn't been a significant increase in the amount of advertising. It really is the messaging. And, you know, we had, we had, you know, some nice advertising, but there were a lot of happy dogs running around, and that didn't really, didn't really help. You know, consumers, especially in this value-seeking environment, if they're gonna pay for a premium product like, like Life Protection Formula, they want to know they're getting something differentiated. And, you know, this advertising shows that. It's a... And this is a great example of a good idea, well executed.
A lot of times at conferences like these, we talk about innovation, we talk about new product innovation, which I think is great, but it's like 5% of our business, the 95% is what pays the bills. And the things like you saw on that slide, that's a slide that pays the bills. And, because it's innovation, but it's innovation in the way we talk to consumers. And so, that really is straight-up marketing. And so when we talk about, you know, some of our pet food business that we need to make sure that we continue to evolve and get better, Wilderness is at the top of that list. So the Life Protection Formula are doing really well, really pleased with that. A lot of work to do left on Wilderness.
You know, I'm hoping a year from now, we can show a chart on Wilderness that looks something like this, you know, with all the changes that we have made, whether it's, you know, how we distribute it or packaging sizes or marketing messaging, because we know that's a really good brand. These things usually take a little bit of time. I mean, this advertising campaign on Life Protection Formula, yeah, it's been great the last, you know, quarter or so, but we, we came up with the idea a few quarters ago. It takes a while to get it from idea to execution. And so we're really proud of that. If we can see the same kind of inflection on Wilderness over the next year sometime, we'll be even happier with our pet food business.
Maybe we'll go to Max there, just behind. Thanks.
Hey, Max Gumport with BNP. So this is for Kofi. You, you highlighted how your HMM cost savings are working, cash conversion working. It's really the top line that we're all still waiting to see come back. I'm wondering, you know, as you look at these emerging tailwinds that you highlighted, how does that inform your view of when we might start to see your own volumes or industry volumes start to get back to maybe a flat or even, even better than that, going forward?
Yeah, thanks, thanks for the question. And I'm pretty certain that is the question that everybody is plying us with these days. I think we're watching a couple things. I think to Jeff's point, we're kind of coming out of a period where we're gonna be lapping the SNAP benefits falling away, on-shelf availability trends picking up for private label and smaller manufacturers here as we get into our fourth quarter. And then, you know, really sort of fully annualizing all the pricing benefits or pricing impact. So the combination of those factors will give us at least a clearer read. It is hard to say.
I think that we certainly started the year with an expectation that we would see a different volume response as we started to lap pricing, and that has been slower to come. So I think we'll remain cautious on exactly when, but those are the things that'll probably be the early tells.
I'm gonna suggest we pause the conversation there-
Sure.
Take it over to the breakout room. Jeff and Kofi, thank you again so much for being here. A wonderful presentation, and let's thank General Mills for a fantastic breakfast this morning.