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General Mills raised the prices of cereals and yogurt. It seems



The company, which also owns Wheaties, Lucky Charms and Annie, said the actual sales volume of its products fell in North America and Europe in the quarter, even though they are rising in Asia.

But thanks to the price increases – in addition to a boost from buying the Blue Buffalo pet store last year, total sales continued to grow 8% compared to a year ago.

General Mills needed to raise prices to protect their profit margins, which were threatened by rising milk inflation, said Finance Director Donal Mulligan to analysts Wednesday. The company owns Yoplait, the yogurt maker.

It also helps to get someone to notice that people are willing to pay higher prices. Although the total sales volume fell in the US, General Mills still has several well-known brands that are very popular with consumers. 1

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CEO Jeffrey Harmening said during the conference call that there was a great demand for Pillsbury baked goods, El Paso taco kits, Annie's fruit snacks and Fiber One bars, for example.

The food industry has been tough for many companies. Discount dealers Walmart ( WMT ) and Target ( TGT ) along with stock king Costco ] ( COST ) everyone has put pressure on food companies to keep prices low.

At the same time, consumers are increasingly consuming processed and packaged foods for the benefit of fresher and organic products.

Kraft Heinz ( KHC ) for example, has dragged more than 25% this year due to slumping demand for his Oscar Mayer cold meats, Jell-O and Kraft Macaroni & cheese. The company had been so focused on cutting costs that it hasn't done as much as rivals, including General Mills, to continue tearing out new and upgraded brands.
Stocks of grain company Kellogg ( K ) is also down about 4% this year as well.

General Mills are not immune to problems. The shares are down at around 5% since spring 2014.

But the company has found ways to settle for a better place than its competitors. For example, General Mills has taken steps to cash in on the organic trend, especially with the acquisition of Annie in 2014. It also owns the organic brands Cascadian Farm and Muir Glen as well as Liberté yogurt.

The increasing shift towards organic food has helped keep prices stable despite the advent of Amazon, ( AMZN ) who now owns Whole Foods and has its own brand store.
Shares of General Mills ( GIS ) rose 4% Wednesday on the solid results. The shares are now up 26% this year.

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