General Mills to expand its international unit

General Mills looks to brands such as Haagen-Daz and Old El Paso for growth.

MILWAUKEE (AP) — Cheerios and Betty Crocker maker General Mills Inc. said Monday it plans to keep expanding its international business, the company’s fastest-growing segment, and increase its marketing to offset the soft economy.

Chief Executive Ken Powell told shareholders that the international growth strategy will focus on premium ice cream Haagen-Dazs, found in 60-some countries around the world, as well as cuisines such as Mexican food brand Old El Paso and healthy snacking such as Cheerios snacks.

“We believe our greatest opportunities still lie ahead,” he said at General Mills’ annual meeting in Minneapolis.

International sales doubled to $2.6 billion in the 2008 fiscal year from $1.3 billion five years earlier, Powell said. They grew 21 percent from last year, outpacing domestic retail sales growth of 7 percent to $9.1 billion.

The international growth comes as General Mills faces a slumping domestic economy. Costs are up for all food producers, since the price of key ingredients such as grain and fuel are high. So foodmakers are passing along those costs to customers.

But the silver lining, food companies and analysts say, is that more consumers are abandoning pricier restaurants and instead buying their food at grocery stores. That means more business for General Mills and other food companies.

Powell said the company plans to drive growth by increasing its marketing — with ads on TV and through Web sites targeting consumers — and by coming up with new products.