General Mills Banks on Innovation and Brand Building to Grow Sales
By Lynne Cooke
One of General Mills’ top priorities in fiscal '20 is to improve organic sales in North America Retail. To do so, the company will invest in innovation, brand building, strategic revenue management, and e-commerce.
“We [will] work to achieve that goal by maintaining a relentless focus on our consumer-first strategy, which is critical as we build our brands to be relevant in our consumers’ lives,” said Jonathon Nudi, the company’s Group President, North America Retail.
He outlined the company’s strategy recently in a presentation at the 2019 Barclays Global Consumer Staples Conference.
In fiscal '19, General Mills generated $10 billion in net sales in North American Retail. Its diverse portfolio of brands spans more than 25 categories.
“Our consumer-first design process is the backbone of our innovation,” Nudi said. “The process favors speed over perfection by getting products into test markets quickly, gathering consumer feedback, and iterating to improve the offering before we broaden the launch. We’re also leveraging our 301 Inc. venture capital arm to see trends earlier and address external innovation by partnering with emerging brands.”
He said General Mills relies on “modern brand building” to meet its consumers where they are and to make sure its brands remain relevant in today’s culture. For example, the company recently shifted its long-standing and popular Box Tops for Education program to a digital platform.
“This modern approach makes it easy for consumers to buy, scan and earn and it increases our connection points with these consumers,” he said.
Nudi explained that General Mills envisions its fastest growth opportunities in its pet food category and in four “accelerate platforms”: snack bars, Häagen-Dazs ice cream, Old El Paso Mexican food and natural and organic brands.
“We also have two large platforms – cereal and yogurt – where we have differential capabilities that position us to win,” he said.
Nudi provided the following specifics on the status and projections for its brands and categories they compete in:
Cereal: “Our brand-building efforts are tailored to reach consumers across many demographic groups with a particular focus on those who over index on cereal consumption, including boomers and households of kids.” For example, the new heart-healthy messaging on Honey Nut Cheerios is designed to communicate to boomers.
Yogurt: The plan is to innovate in growing segments of the category. For example, new Yoplait smoothies, new flavors of Oui, and a new product called GoodBelly probiotics for digestive health.
Snacks: “We’re getting back to innovation on the core bar [Nature Valley] in fiscal '20 with the new line of Nature Valley Wafer Bars, which are off to a promising start after launching earlier this summer.”
Mexican: Innovation, consumer messaging and in-store activation have helped drive 5% compound retail sales growth for the brand over the last three years, more than double the growth rate of the category. Plans for fiscal ’20 include “refreshing the package” to improve the shopability at shelf and launching new bowls and kits.
Soup: Three new varieties of Progresso’s Rich & Hearty line will launch soon, with more coming later in the year.
“We’re driving innovation, brand building and advantaged capabilities in North America Retail to improve our growth,” Nudi summed up. “We expect to see stronger performance in fiscal '20 in U.S. Snacks and U.S. Yogurt while we maintain our trends in U.S. Cereal. We’re set up to compete effectively across the entire portfolio.”
Editor’s Note: This story is based partially on a transcript provided by Seeking Alpha (www.seekingalpha.com).