Good morning. I'm Tom Palmer, the Food Analyst at J.P. Morgan. With me today is the CEO of General Mills, Jeff Harmening. General Mills is a leading packaged food company in the U.S. It produces and markets a wide range of products, including General Mills Cereal, Pillsbury Doughs, and Blue Buffalo Pet Food. Jeff has been with General Mills since 1994 and CEO since 2017. Jeff, thanks for joining us today.
Yeah, thanks for having me.
It's been a dynamic environment in the food space over the past few years, including over the past month or so. Maybe we could just start off with an update on trends and expectations as you see them for General Mills.
Yeah, thanks. I've been CEO for eight and a half years. I think it's been dynamic for the last eight and a half years or so. As you say, the last month or so is no different. You know, as I think about the current environment, I reflect back a couple of years before the current environment. You know, and I think, as I think about it, we started with kind of record levels of inflation and to the extent of more than 30% over two years. With consumer wages not keeping up with that inflation, and not only for food, for a whole number of industries. I think that's the backdrop for what we're seeing today, which is consumers that have struggled over the past few years on a whole variety of fronts to keep their wage growth growing with prices.
Consumers are price sensitive now, especially if you're making less than $200,000 a year, and especially if you don't have money in the stock market. If you're making more money and you have money in the stock market, which has been growing, that may be a different factor. For everybody else, which is the vast majority, it has been a challenging economic environment. We'll see if that gets better. Certainly, a shutdown of the federal government recently and everything with the SNAP program hasn't helped with that. I think those are going to be relatively short-term effects relative to what we see macro. Importantly, what I would say is that as we saw the turn just about a year ago in our business, we had some really good marketing on our Pillsbury business, but it wasn't working the way we thought it would.
It really caused us to reevaluate our approach and going to market and what we needed to do. One of the things we decided on Pillsbury was that we needed to kind of get pricing back to within a certain zone. Not that it would be equal to our competition, but just kind of within a range where consumers would consider Pillsbury again and let our marketing work. We made the decision to take some prices down on Pillsbury and Totino's as well, literally about a year ago. We saw that start to work. We decided, hey, look, it's working on these businesses. Maybe we ought to be a little bit more broad with this approach.
We have been over the last year looking at our whole Remarkable Experience Framework, what consumers value, and getting our prices in line has been important. The other thing we know is that that's only part of the story. The rest of the story is making sure the rest of your marketing mix works. We have increased our level of new product innovation. We have increased the news we have on our core brands. As we sit here today relative to a year ago in North America retail, we're growing our volume share in eight out of our top 10 categories. A ninth category, we're 0.07 points away from share growth, but I'm not allowed to count that. It is eight out of 10. That is working as we anticipate it, but that's only the first step to getting back to dollar share growth.
We're holding share in pet food. We're growing share in international. We're growing share in food service. I would say we are certainly cautiously optimistic. We feel as if we're increasingly convicted, I would say, that the steps that we have taken are the right steps for us to take. We've executed them quite well. I'm quite pleased with the way that our team has executed. Yet our dollars are still down for the time being because we've made these investments in price. The next step then over the coming few quarters will be seeing a narrowing of that price gap so that we can eventually get back to dollar growth.
Thanks for that. Maybe sticking to some of the actions you've taken. If we go back a couple of years ago, it seemed like private label was the bigger source of market share pressure broadly for larger brands. More recently, in certain categories, we've seen more share gains from maybe perceived better-for-you brands. Do you think the response needs to be different when you consider the potential pressure from kind of the, I guess, the private label side tends to be maybe a more value-oriented response, better-for-you brands, perhaps a bit different of a decision-making process for consumers?
Yeah, really insightful question. It really depends on the category you're talking about and the brands you're talking about. We compete in 26 different categories. You're right in saying that we have felt pressure on the value side, and private label is a part of that pressure because consumers are feeling stressed, as well as some smaller brands. You say health and wellness, I would say protein. I mean, it's actually not health; it's protein. That's what consumers are wanting. Yes, that's part of health and wellness, but it really is protein. That's why we have our Remarkable Experience Framework, because what you do in cereal, for example, might be different than what you do in Pillsbury. I'll give you a couple of examples.
In cereal, what we realized is that we needed to have some protein offerings to compete with some of the people who are growing in the marketplace. We introduced Cheerios Protein, which is now a $100 million business and bigger than any of the small competitors. We introduced some granola varieties, including granola varieties with protein. Now we are the number one producer of granola in the cereal category. We did that. At the same time, we realized that our advertising was not as good as it needed to be on Cinnamon Toast Crunch. We improved that advertising. Actually, that business has started growing. By the way, same as Lucky Charms. As we look at that category, that is what we needed to do.
Whereas in Pillsbury, our marketing was really good, our new products were really good, but the price point was not where we needed. Those are two different categories where we have done slightly different things because what we needed to do to respond to consumer trends were different in those categories. That is one of the reasons why you will hear us talk about our Remarkable Experience Framework, because it allows us to attack the right problems in the right place at the right time. That will vary across different brands and different categories.
I think one way that you've noted product changes is on an ingredients basis.
Yeah.
We have seen, and you showed a lot of this at your recent investor day. In some areas, such as artificial dyes, it is taking maybe the core of the portfolio and changing some ingredients. In other areas, such as adding protein content, it seems to be a bit more of introducing a new version of a product. How do you kind of make that decision of what needs to change at the core of the portfolio versus introducing new products that might have these attributes?
Yeah. As we think about how to grow, I mean, we think about the whole spectrum to innovating on our core to new products to licensing products to making acquisitions. I mean, we think about all those things. There are different pathways depending upon our right to win in a category for the right to the brand to take ownership of certain benefits. We are willing to play all the keys of the piano. We have over time, obviously, we got into pet food with Blue Buffalo because we did not have any pet foods. We needed to buy our way into that category with a leading brand. You see us doing Cheerios Protein, where we launched a whole new variety of Cheerios with the health benefit that people are looking for in protein. In other cases, we will make Cinnamon Toast Crunch taste better.
That is just on the Cinnamon Toast Crunch brand itself. We recently just launched Ghost Bars, which is into the high protein bars category, which we think is going to be really well received. As we think about it, we really think about across the whole spectrum of how we innovate. We call it innovation with a big I. How do you innovate? It takes into account our right to win as well as what the brand can and cannot do. We are open to all those different alternatives, and they work in different ways.
Thanks. Maybe tying in with this, there is a bit of a question with some of the shifts we're seeing, right? Secular or cyclical?
I've heard that question, yeah.
Right. GLP-1, maybe some of the preferences towards protein and others, more scratch cooking, more price-sensitive consumers following such high inflation, especially. You've seen a lot over the years. I mean, I guess your view of what portions of this might be more cyclical in nature and which more enduring?
Yeah, sure. I mean, there might be a little bit of a mix of each. I mean, as you think about fads and points of time versus trends, I mean, that's how we think about these things. The humanization of pet food, for example, is a trend. I mean, it's like a 20-year trend. Snacking is a trend. It's not a fad. Demographics are trends. I mean, they're kind of knowable. It's just mostly just math. You see things like the economy and consumers feeling really pinched. That's clearly cyclical. I mean, you go through periods where consumers feel more stressed and they go through periods where they're more robust and stressed. I mean, that's, honestly, that's clearly cyclical. I mean, if it's not cyclical, then there's a whole different number of questions that one must ask oneself. That's clearly cyclical.
You get into something like GLP-1s, but I think it's actually more interesting. What I would say is that the idea of weight loss has been around since the beginning of time. People wanted to lose weight since the beginning of time. GLP-1s is a, but however, GLP-1s is a completely new phenomenon within that. And consumers are reacting to that in a way that's differential to what they had before. Will there be a structural change due to GLP-1s? Probably. But we've already seen some of that pass already. About 12% of adults are using GLP-1s. Now, about 50%-60% of those get off of GLP-1s within the first six months. So there's a rotation through that. It's pretty clear that GLP-1 usage will grow. And it may double. And it may go by two and a half points. And that will increase the need for protein.
That will increase the need for fiber and macronutrients and different pack sizes and all of that sort of thing. The question is, at the end of the day, how much does it impact growth? It has not impacted food growth by multiple percentage points so far, probably fractions of a percentage point. Even if that doubles, okay, you say it is a structural change, but maybe it is a point. Maybe it is a point and a half. That is not nothing, but it is not five points. It is not three points. I would suggest that GLP-1 usage will continue, but we will also adapt. We are adapting. That is why we have been around for 160 years, because we will adapt. If we stood still and did nothing, that would probably be problematic. We are not going to do that.
I dare say that in some cases, people, even if the impact that GLP-1s will have on society is not overblown, the impact it will have on us, it's overblown because assuming we don't react.
You noted high protein being maybe one of the key food trends we're seeing right now. Are there other health trends that you're watching or perhaps starting to see emerge?
Yeah. Yeah. Yes and yes. Let me talk about protein for a second. Protein's been a, I mean, it's a trend. People have been wanting more protein for like the last 10 to 15 years. Even that trend in itself is starting to change, has been changing, which is really interesting. It follows a path where you start with, we saw this kind of with organic, where people at the tip of the spear wanting protein, they'll eat more protein no matter how bad it tastes and no matter how much it costs. They just want more, and they'll do anything to get it. Over time, the more it gets into the mainstream, the more people go, "Hang on a minute. I want more protein, but I actually want it to taste good.
If it were affordable, that would be even better. We're starting to see that shift right now. You see that on like Cheerios Protein. It costs a lot less than some alternatives. It has eight grams of protein versus 20, but people are okay with that. It tastes a lot better than alternatives. It is a lot less expensive. One of the things that we think will happen, we see happening with protein, we do not think, we know what is happening with protein, is that people will be increasingly unwilling to make trade-offs between how something tastes, the price, and the efficacy. That is our sweet spot. I mean, we made Fiber One taste good. I mean, we can make anything taste good. We see that trend. Americans get one and a half times more protein than they actually need.
That does not mean they do not want more, because people want more. You cannot tell consumers they are wrong. You just keep giving them, you make sure that they are getting what they want. Nine out of ten Americans do not get enough fiber. Nine out of ten. We know that with GLP-1 usage and as populations age, 55 plus in that category myself now, people need more fiber to make sure everything works its way through the system the way that it should. We are starting to see an increase in interest in fiber. I think that will continue. People want it to not taste bad. They want it to do what it is supposed to do. Also macronutrients. Again, if you are going to be consuming fewer calories, you still need the same number of macronutrients.
We think that those two trends will actually start to pick up as well.
Thanks for that detail. Last one before moving on from North American retail. I wanted to ask on cereal. It has been a category that seems to be facing, and this is a category level, I think more so than General Mills specific, a bit more pressure on the volume side than maybe we're used to seeing. What's happening specifically in cereal that maybe is contributing to that? It does seem like you're taking some action to address share trends. Is there something that can be done at a category level to help shore up some of these trends too?
Yeah. As you say, we've done well on the share front and are doing pretty well now because we've taken some action. Let's back up a little bit to the category itself. We saw for a few years, the household penetration of cereal was declining, which is never a positive indicator for the health of a category. We've actually seen that stabilize. Household penetration has stabilized, which actually is positive. The category is still declining in terms of pounds by a little bit. That is all by rate. You ask yourself, okay, why would that be the case? People are going, they're finding alternatives to what they have in cereal. A lot of those are like protein drinks. You're going to sense a trend here. Protein drinks, yogurt with protein, other things with protein.
In order to address that kind of challenge, you need to introduce your own things like Cheerios Protein and Granola and Granola Protein, which we have done, which is why we're doing relatively well. What we need to keep doing, we need to keep doing those things, but also recognizing that, I mean, Lucky Charms pounds are growing and Cinnamon Toast Crunch is growing and Reese's is growing and so Reese's Puffs is growing. There is also an opportunity for stuff that tastes good and making sure you keep marketing those and keep developing those brands, even as you're going to the protein side, realizing not everybody wants all that. Sometimes people just want stuff that tastes really good. Making sure we keep marketing those well as well, that's going to be the key to our success.
Look, I think even having a new competitor in the cereal category probably helped the category. Ferrero just bought WK Kellogg, and they're known for their innovation. I think that'll help the category to the extent that they invest in the growth of the category, which I suspect that they will.
Right. Hope to spend a few minutes discussing fresh pet food. You recently rolled out Love Made Fresh, fresh pet food in retail. Could you maybe give us some update on the rollout itself, stores, SKUs available, and how this might evolve as we look out over the next couple of quarters?
Yeah. So we just launched Love Made Fresh, which is Blue Buffalo's entry into fresh pet food. We decided to go with our brand because Blue Buffalo has a right to win. Consumers are telling us they really love the idea of Blue Buffalo getting into fresh pet food. We did a test a couple of years ago. We found that out. We found out we could make good product, but it was going to be more daunting than we thought to generate awareness. Having learned that lesson, we're kind of, we're backing it now. It's not a hobby. It's not a test market. We're kind of all in and investing on the growth. I would say so far, so good. It's too early to declare victory by like a lot. So far, so good. We've executed really well.
I would start with, you asked about like where is it, refrigerators. We said we'd be in 5,000 stores in the first three months. We're about six weeks in. I just had a review with the team last week. I can tell you specifically that we're in 4,531 stores already, which is slightly more than 90% of what we said we were going to do in a month and a half. We said it would take us three months. A month and a half in, we're 90% of the way there. I think that's actually quite good. The reviews online qualitatively are very good for our pet food offering. Pet parents really like it. Jeff Seaman, our Head of IR, is here, and his dog, Teddy, will not stop standing in front of the refrigerator looking for this. We know that pet parents like it.
We know their pets like it. We have 12 SKUs right now. Some are in a tube format. Some are in a resealable tub, which is the new format to the segment, if you will. That is kind of where we are. We are executing well. We are getting good feedback from our retail customers. They are thrilled we are in this category. They think we can help build the category and grow it even faster. We think so too. That is kind of our, kind of getting through this executional phase through the beginning of the year is our focus. After that, what I would also say is that we will continue to grow the number of stores we are in. We have a line of sight to doing that. We have a lot of customers asking us to do that, retail customers. That is good.
We're bringing some more SKUs in the first quarter of next calendar year in a stand-up resealable pouch. Again, another format. That's being well received by customers and consumers. We've got an innovation pipeline, which we're really pleased with. We're going to have to invest for a couple of years. So far, so good. More coming this calendar year where we're going to look to continue to build momentum. It's too early to declare victory. We're only like six weeks into this.
What about the economics of fresh pet food? I think one concern you noted when you did the trial or one question maybe was whether there was a viable path to profitability. I think your message at the investor day last month was there is, and you do see it being more comparable to the pet segment margin over time. What's that path look like? Does that require internal manufacturing capabilities? Can you do it at current pricing levels? As it scales, would you look for driving margin through that? Just any update on that margin path.
Yeah. First, I'll confirm what you heard at investor day, which is right, which is we have a path to making this a profitable endeavor. I think our shareholders would ask us to do that. I mean, selling product is one thing, but we're really paid to make money selling it so we can reinvest back in innovation and brand building and all the things that we do. We would not have gone into this again had we not had a path. From the beginning, we told ourselves we're only going to get back into this if we feel as if we have a path to economics that makes sense for us. That's true of the income statement and also the balance sheet. As I talk about the income statement first, it really is, the key really is gaining scale.
A lot of good things come with scale, whether it's manufacturing or logistics or sourcing. I'm not going to get into specifics, only to say that there are a lot of good things that come with scale, as well as some technology that we think that we can bring to the table, by which I mean I know that we can bring to the table. All those things on the income statement side have us feeling as if to the extent we generate awareness and trial and sales and scale, that we can make a gross margin and income statement work for us. When it comes to the balance sheet, we're all, because I get this question a lot too, what about capital expenditures?
I mean, there will be capital expenditures, but we're highly confident that we can keep capital expenditures within our current capital spending envelope, if you will, of 3%-4%. We do not anticipate coming back and telling shareholders that we need to spend more capital than we had initially anticipated for the enterprise in order to get into this endeavor. We feel good that the economics work there because if you have a great income statement, but it's eaten up by capital, that's not incredibly helpful in the long run. To the extent you can have an income statement that works with capital that is manageable, you can have a business model that works. It is just a matter of do you have the right brand and the product and the branding. We feel as if we do.
Another portion of the pet food portfolio, you're closing in on a year since the White Bridge Pet Brands acquisition, which most notably brought you the Tiki Cat brand.
Yeah.
Its growth has been impressive, but similar to Blue several years ago, the brand has, I think, clear distribution opportunities, underpenetrated as we look towards maybe more traditional retail channels. How do you view the brand's growth potential and distribution opportunity? Where do we stand in kind of integrating this business into the broader pet food portfolio?
Yeah. The White Bridge acquisition, as you said, especially Tiki Cat, which is the crown jewel, I mean, it's been growing really well. It's been going well. We have a great team, but also Tiki Cat's a really good brand and the product is differential and something cats really like. The cat population is growing. All good things. What I would say is relative to when we bought Blue Buffalo, there are similarities that are important. There's also a difference that's important. The similarities, as you noted, is that there's certainly room to grow in channels and distribution and all that kind of thing. We feel good about that. The other differential growth is when we bought Blue Buffalo, there was actually quite a bit of awareness because Blue Buffalo had done a lot of branding over time.
They had actually gotten into the food, drug, and mass channel before we acquired them. They were in four accounts already in food, drug, and mass before we acquired them. Tiki Cat's in no food, drug, and mass accounts. Their awareness, even though the brand is really good for the people, the consumers that know them, the brand awareness is a lot lower. I would submit to you that the runway for growth on Tiki Cat is actually greater than it was for Blue Buffalo in percentage terms because just generating awareness, staying where we are and just generating awareness will generate growth. The cat population is growing pretty quickly.
If you add on top of there over time distribution growth, it's very clear to me that the opportunity in front of us on Tiki Cat on a percentage basis is actually higher than it was for Blue Buffalo.
Thanks for that. Maybe just an update on kind of integrating this business into the broader portfolio. Integrating the business. I think you've got the Joplin facilities and.
Yeah. So far, so good. I mean, again, we inherited a really good team, which is always helpful when making an acquisition. We're largely through integrating our systems. We had a couple of plants in Joplin that we got with the acquisition. We already have a manufacturing plant in Joplin. We're closing a couple of the ones we bought with White Bridge, but a lot of those employees are transferring to the current plant. It's almost across the street. We anticipated that we would probably do this when we made the acquisition. It's good to have some synergies in addition to the growth. Makes the models work out better. We get to keep the vast majority of our employees employed as they go to our other facility in Joplin.
I would say on the integration, honestly, it could not have gone better so far.
We've touched on a couple of areas of the pet food portfolio, but ultimately the biggest portion is Blue Brand. It does seem like share trends have stabilized for dog food at this point. Maybe this is a bit more of an open-ended question than on the other two brands. What excites you about the pet food portfolio when you look at Blue and the opportunity that still exists within that?
Yeah. I am very excited about our growth potential in Blue. As you said, we have stabilized the business. That is not the ultimate goal. The ultimate goal is to get back to really strong growth, which we are confident we can do. I think across Blue, we have more things working for us than working against us. If you look at Tastefuls, our cat brand, that is growing. Life Protection Formula, we have gotten back to growth. We have obviously fresh pet food, which we are very bullish about. Wilderness has been more of a challenge, but that is kind of our biggest challenge. The other things, we have gotten our pricing right on treats, and we are seeing net rebound in terms of volume. Now what it takes is going from having stabilized the core into growing the core. That is kind of where we are. I am really bullish.
We have a good pipeline of innovation. We brought one of our big customers in just really recently here. You always think you do, but you test yourself whether you are in front of retail customers. If they feel the same way, then you are probably on the right track. I think they were, I would say, pleasantly surprised by the level of innovation we have on the way for a Blue Buffalo brand. That gives us even more confidence. I would say, yeah, we have stabilized it for now, but that is not the goal. The goal is getting the core brand and all of our pet food back to strong growth. We can see a path to do it. Now we need to do it.
I wanted to ask on the international segment, thinking through the growth opportunity both from a sales and margin standpoint, it seems like you've addressed some of the challenges in ice cream with both innovation and rationalizing your store footprint. As we look out, what becomes kind of the key growth drivers here? I think the margin opportunity has been discussed for several years. When do we maybe see a broader inflection there?
Yeah. On our international, we've been on quite a journey over time. We've said, look, the key to our growth is going to be growing our big global brands. That is still the key. In the process, we have divested a number of smaller brands, La Saltina in Argentina, yogurt in China and in Brazil and in Europe, a dough business in Europe. We've kind of gotten rid of things that have been, frankly, a distraction and have been not helpful when it comes to margin. Having said that, one of the things we've done is, as you've seen over the last couple of quarters, and long may this continue, we've strung together a couple of quarters of really nice growth on the top line with outsized profit growth in the bottom line.
That is because we are really putting all of our focus back on our core brands. There are three brands that will drive the majority of our growth in international. You are seeing that today. You mentioned Häagen-Dazs. I am really pleased with what the team has done on Häagen-Dazs introducing stick bars in a new format, but even more importantly, growing our core, whether that is in Europe or whether that is in China in particular, growing our core alongside the stick bars and through product renovation and really good advertising. Again, using the Remarkable Experience Framework in that brand, we have seen great growth on Nature Valley. I think it is up double digits so far year to date. The Nature Valley bar outside the U.S., we kind of got back to the basics on focusing on Nature Valley and the original bar, but also protein.
Protein's big outside the U.S. as well. Nature Valley is growing nicely. The third pillar of that growth will be Old El Paso, which is also a high margin brand and a good brand for us outside the U.S. Growing those three brands will account for the majority of our growth. We have seen some last couple of quarters progress being made toward that and more progress to do, but I'm highly confident that we'll increase the profitability of international, and that will outstrip the sales growth that we see, which we think will also improve.
All right. On food service, it's been more attractive sales and profit growth within the broader Mills portfolio. When you look out, maybe just an update on the key growth drivers and secondarily, if we are heading into maybe a more challenging economic period, maybe discuss how exposed or perhaps insulated this business might be to those machinations.
Yeah. Yeah. Yeah. So machinations. That's good. Our food service, we have a really good, as you know, we have a really good food service business. It's got good margins. It's got good growth, and it's been sustained over time, and we compete effectively. It's because we're kind of structurally advantaged in a couple of really important ways. One is that we have good brands, which we sell through K through 12 schools. Think about cereal or bars or that kind of thing. We have really strong shares in that. That is a growth sector. Actually, as the economy gets tougher, more kids tend to eat at school. That is a growth business for us, and we've got really good shares, which is one of the reasons we have been growing. The second reason is we have a dedicated sales organization.
We have a lot of dough business and flour business and that sort of thing, but we have our own sales organization, and we can really cover a lot of ground. The third is that we have a lot of culinary expertise, which we showed off during our investor day, which you got a chance to see, particularly as it relates to all kinds of dough. If it's dough, we do it really well. Because of those things and because of all those factors, we've seen consistent growth over time and good margins over time because we do have some structural advantages. A lot of times when people think of food service, they automatically go to a quick service restaurant. For good reason. That's the biggest part of away from home eating. That is probably the smallest part of our away from home eating.
The biggest part for us is in what they call non-commercial channels. Think K through 12 schools and universities, and that part has been the growth part. Then we sell to a lot of smaller restaurants, and that business has been doing well for us.
Thank you. I wanted to ask on cost controls. It has really been impressive, the level of productivity savings we have seen over the past few years. For this year, you have announced $100 million in planned savings on top of that. Maybe this was part of the $100 million, but there was a recent restructuring announcement and a plant closure. How much more is there to go on the cost savings side relative to what we have seen so far?
Yeah. We pride ourselves on not only driving innovation, but being efficient with how we do it. The more efficient we are, the more money we can put back into innovating and sales growth. As I think about, you mentioned three things, and I'll put them in three different buckets in order of magnitude of importance over time. So, productivity. The second would be this transformation. The third would be the manufacturing restructuring. By far, that is the order of importance. You mentioned the $100 million we'll save in transformation. I'll get back to that. Just by order of magnitude, this year we'll generate $500 million in, and by the way, we've kept at a level of roughly 4%, now 5% over the last 15 years. That is the main engine of our productivity. It's well-grooved.
We have a line of sight into keeping our productivity efforts where it has been historically. It may not be five. It may be four. It will be industry-leading for the foreseeable future. The more we look at it, the more we see opportunities. Now we're doing a lot of digitization and using artificial intelligence and that sort of thing to reduce waste. We talked about that during our investor day. That is by far the most important. When it comes to transformation, yes, we're going to save money, but I would tell you we're just changing the way we do work. We talk about the fact we're having machines do a lot more of our forecasting now than we did before. That will save a little bit of money.
The big unlock is that it helps our marketers focus on growth because it's hard to focus on, okay, what's the forecast for next month and try to generate new ideas for a brand. To the extent the machines do it, by the way, they're doing it as well as people. They're not nearly as biased. Our people are good, but we all bring our biases to the table. What we've found is that we're taking the time it takes for forecasting down by like 75%. That leaves us more time to generate ideas, to generate growth.
As we look at our transformation, it really is using technologies and processes to make the work we do more efficient, yes, to save costs, but I think even more importantly, particularly as it relates to marketing, is it will allow our marketers time and energy to do what they need to do to generate growth. That's the real unlock is growth. I just got excited about that. The plants, I mean, we closed three plants, and all three of those plants came with acquisitions. There is not something broader at foot here, really. It really is in Joplin, as I said, we saw an opportunity with White Bridge to move capacity into our current facility. The acquisition we made in food service will outsource some of that to a third party while keeping one of our manufacturing plants.
It really was kind of a, it's a tactic. It's a nice tactic. It'll generate a little bit of savings, but it's not going to be nearly as much as the other things we talked about.
Thanks. Historically, General Mills has been acquisitive, had some pretty successful acquisitions, looking at Blue Buffalo and White Bridge more recently. Maybe an update on current appetite for M&A and areas perhaps where you might see more opportunity from a category standpoint.
Yeah. I'll start the M&A discussion where there's nothing more important that we can do right now than generate organic growth. That's where the M&A comes in. By the way, it starts internally that way. It's not just something I say to you. Anybody you run into, any member of our leadership team, they will tell you the same thing without prompting or hesitation because no amount of M&A can make up for a lack of organic growth itself. I know that's obvious, but sometimes we can tend to get ahead of ourselves. It's also important as we look at M&A, we won't do any acquisitions or divestitures which will prohibit us from growing organically.
As we think about what we might do, it has to be with an eye toward making sure that we have not only the financial bandwidth, but also the organizational bandwidth to make an acquisition. I do not need to come tell you and all of our investors that we cannot grow organically because our attention has been diverted to acquisitions. We really have not changed our stance about how we view acquisitions. Over time, a number of studies have shown that companies that do both acquisitions and divestitures, both over time and kind of in a fair amount of sequencing, do have a better total shareholder return. That is certainly the way that we feel. We have changed 30% of our portfolio. So far, we have made some big acquisitions, as you say, Blue Buffalo and White Bridge and so forth, but we have also made some big divestitures.
Think about yogurt. As we look into the future, our stance toward M&A really hasn't changed. We have an always-on capability. We'll look for assets that are growthy in nature, things where we are competitively advantaged, where we think that we can create value. If it comes with some synergies, all the better. We'll also look for chances to divest. We think that somebody else might be a better shareholder than we are, and we can focus our attention on the things that we are growing. Again, it's probably a boring answer, but it's the same as we've thought about it for the past few years. Only you may hear more of an emphasis on organic growth because during the pandemic, we were basically selling as much as we could make. Inflation, we're just kind of keeping our supply chain and pricing in line.
Now we need to generate the growth ourselves. Our stance toward M&A and capital allocation in general has not changed because making money is important, but what you do with that money is as important. We are really good at making, we are really good with free cash flow conversion, like really good. We will continue to pay our dividend and grow our dividend in line with earnings and do M&A. If not, we will give money back to shareholders in the form of share repurchases and pay down some debt in the process.
Great. We are getting late in the quarter. Maybe just an update both on anything quarter-to-date related you want to provide, but also as we think about moving through the duration of this fiscal year, what do you see as kind of the key swing items that might send your reported results maybe to the high or low end of your current guidance ranges?
Yeah. I mean, let me start with the year, and I can back into the near term a little bit, although there's only so much I can say about that. As the year progresses, we said, look, we made a lot of price investments. We were lapping that in the first half of the year, and that our profitability would be challenged in the first half, but it would get better in the second half, as would our sales as we start to lap those price investments. That is exactly the way I look at it and think about it exactly the same today as we did when we gave guidance at the very beginning of the year. Because we're seeing things play out roughly in line with how they would.
We're growing pound share in eight of our top 10 categories in NAR, and we're maintaining or growing share on our other three segments. That is not to say there's not more work to do. Pound share is one thing. Dollar growth is another. If you looked at our dollars in North America retail, you'd see those are down, but we think those will get better, and the gap between pounds and sales will decrease over the course of the year. That is still the way we feel with the biggest impact in the fourth quarter. Again, gradual improvement as we move throughout the year. That is what we saw at the beginning of the year, and we thought we knew that's still what we see, which is why we reiterated guidance at the end of the first quarter.
As we look at the quarter today, there's not really much, there's really not much commentary. You all can read Nielsen data as much as I can. You can see that North America retail has gotten a little bit better over the course of the last little while. We're holding share, and Pet Food International is holding share as well. There's not really much to report. In the short term, I get asked about SNAP and federal shutdowns and all that. I mean, look, your guess is as good as mine. No. Where I think, what I would say about all that is there you may see a week or two of data because of SNAP being restricted. That's not as robust as it was before.
We believe, and by the way, our retailers who we talk to believe that the minute the funds are reinstated, that that'll come roaring back. There is certainly no long-term dislocation. There is no medium-term dislocation. I'm not positive there'll be a short-term dislocation. We'll see. The key is that because some spending has been restricted to make sure you have enough inventory with your retailers so that when the funding gets restored, that you're actually on the shelf and that you're there. We're in a great place to do that and have well alignment with our retailers. That's probably as much in the short term that I can talk about.
Thanks for that. We have a couple of minutes. If anyone in the room would like to ask, there's a mic right at the front. If not.
We stunned them into silence.
Thanks for your time today, Jeff.
Yeah, thank you.
All right.
Appreciate it.
Yeah, appreciate it.