General Mills will close two plants in California, Massachusetts

GOLDEN VALLEY, Minn. - A day after General Mills said it would begin $100 million in new cost reductions due to flagging sales, it announced the closing of two manufacturing plants in California and Massachusetts.

The Golden Valley, Minn.-based company expects to close a cereal factory in Lodi, Calif., near the end of 2015. The plant employs approximately 430 employees and has been in operation since 1947.

Sales of cereal, its largest U.S. retail business, fell 9 percent in the first quarter. The category peaked in the mid-1990s, according to the consumer research firm the NPD Group, although cereal still remains the largest breakfast food category.

General Mills sells a dozen brands of cereals, with Honey Nut and regular Cheerios being the No. 1 and No. 4 best-selling cereals in the country.

General Mills also will close a yogurt manufacturing facility in Methuen, Mass. that employs 144 people. The plant has been operating since 1993.

General Mills plans to consolidate yogurt production at three other plants, including several varieties of Yoplait and Mountain High. The announcement came as the Yoplait yogurt division had experienced several quarters of decline, although it was up 1 percent in the most recent quarter.

General Mills, which operates a plant in southwest Cedar Rapids, posted net sales of $4.27 billion for the quarter that ended on Aug. 24, about 2.6 percent less than analysts' predictions, adding to several quarters of lagging sales in the packaged food industry.