The stock of General Mills (GIS) is up about 1% on Aug. 26 after the food giant announced plans to remove artificial colors from its sugary cereals that include Lucky Charms and Trix. The Minneapolis-based company said it is shifting to natural fruit- and vegetable-based dyes as well as colors derived from spices like turmeric and paprika to give its cereals their bright colors.

General Mills is responding to concerns voiced by the public and also health officials in the U.S. about the potential harms of adding artificial colors to cereals, most of which are consumed by children. "This achievement reflects how we are evolving with consumer needs while continuing to offer food that tastes great, delivers quality and provides value," said General Mills in a written statement.

Responding to Health Concerns

General Mills said 90% of its U.S. retail products are now free of artificial dyes. Products that still contain artificial colors, like some Betty Crocker cake mixes and its Fruit Roll-Up lunch snacks, will transition to natural dyes by the end of 2027, according to the company. General Mills is the second major cereal maker to announce a transition to natural dyes and colors.

WK Kellogg, which makes Froot Loops and Apple Jacks cereal, said earlier in August this year that it will remove artificial colors from all of its U.S. cereals by the end of this year. Health advocates have called for the removal of artificial dyes from all foods, citing studies indicating that they can cause neurobehavioral problems, including hyperactivity and attention issues, in some children.

GIS stock has declined 19% over the past year.

Is GIS Stock a Buy?

General Mills' stock has a consensus Hold rating among 13 Wall Street analysts. That rating is based on three Buy, five Hold, and five Sell recommendations issued in the last three months. The average GIS price target of $34.92 implies 7% downside from current levels. These ratings might change after the company's financial results.