Consumers have been moving away from granola and snack bars, once a staple breakfast food, as they become more conscious of high sugar content in them.

To counter slowing demand for packaged food, companies have been revamping and tweaking flavors and recipes to offer consumers healthier options.

General Mills, which makes Cheerios and Chex Mix, unveiled versions of its yogurt brands in sea salt caramel and dark chocolate raspberry flavors. It also refreshed store displays.

Still, sales of cereal and yogurt were flat in the quarter and that of snacks declined.

"We are very focused and frankly not satisfied with the performance on both Nature Valley and Fiber One, and that's really what we need to turn around in the coming year," Chief Executive Officer Jeff Harmening said.

Last month, Harmening noted that Fiber One, which used to be a part of the diet of half the U.S. population, is now only 2%.

The company said it would now focus on new variations of granola and snack bars, a strategy that has worked for yogurts.

"Last year our new product innovation (for Nature Valley) wasn't what we wanted it to be and we look to correct that this year," Harmening said in an interview with Reuters.

Organic net sales, which excludes revenue from acquisitions, fell 2% to $2.34 billion in the quarter for its North America retail segment - its lowest in nearly three years.


For interactive graphic click link:https://tmsnrt.rs/2X7eHYt

Net sales rose 7% to $4.16 billion, but missed the average analyst estimate of $4.24 billion, according to Refinitiv IBES data. The rise was largely fueled by a 38% increase in sales of Blue Buffalo pet foods.

The company bought Blue Buffalo last year to diversify its portfolio and reduce its dependence on snack, cereal and yogurt businesses. It now expects Blue Buffalo's net sales to grow between 8% and 10% in fiscal 2020.

General Mills earned 83 cents per share, excluding one-time items, above the estimate of 77 cents.

(Reporting by Nivedita Balu in Bengaluru; Editing by Shinjini Ganguli)