General Mills execs outline growth plans to 2015
February 17, 2010
by Eric Schroeder
BOCA RATON, FLA. — Executives with General Mills, Inc. said they plan to focus on baby boomers, millennial families and the rising middle class in emerging markets around the world to grow sales. The executives, participating in the Consumer Analyst Group of New York (CAGNY) meeting in Boca Raton on Feb. 16, looked specifically at the company’s growth plans through 2015.
“Our product innovation will feature new health and convenience benefits and new flavor varieties,” said Ken Powell, chairman and chief executive officer. “Our margin expansion will be fueled by broader H.M.M. initiatives with supply chain savings alone targeted at $1 billion over the next three years and $4 billion over the next decade.
“Our international operations will continue to grow at a rapid pace with increasing contributions from China and other emerging markets.”
The growing population of older adults is expected to play a role in General Mills’ efforts as well. According to Euromonitor, by the year 2015 adults ages 55 and older will represent more than 1 billion consumers worldwide.
“This consumer group is intensely focused on the links between diet, health and wellness,” Mr. Powell said. “We are targeting product innovation, packaging innovation, and marketing efforts designed to meet their needs.”
Ian Friendly, executive vice-president and chief operating officer, U.S. Retail, said General Mills also is tapping into the market of 75 million millennials through the on-line marketplace. Whether it is through blogs on bettycrocker.com or downloading recipes through an iPhone application, he said General Mills is using technology to talk to the demographic.
“When it comes to making dinner, millennials often have limited time and limited cooking skills, so they want products that are easy to prepare,” Mr. Friendly said. “They also appreciate ethnic flavors and we have got some great options.”
Products developed for the millennial market include Macaroni Grill dinner kits, Simply Cookies, Simply GoGurt and Yoplait Greek style yogurt.
Providing perspective on the international market, Chris O’Leary, executive vice-president and chief operating officer, International, said General Mills expects international operations to lead the company’s growth to 2015.
Emerging markets such as China, India and Brazil will pave the way. The markets are expected to represent approximately 20% of global food sales growth over the next five years, he said.
Sales in China tripled over the past six years to $300 million in 2009, and Mr. O’Leary said General Mills expects to triple sales again to $900 million by 2015. To do so, the company will rely on the strength of four key brands: Haagen-Dazs, Wanchai Ferry, Bugles and Trix fruit snacks.
“Bugles is a strong player in salty snacks in China,” he said. “We have built a great distribution system to reach customers from large retailers to thousands of small stores and kiosks throughout China. We are now leveraging this distribution network for Trix fruit snacks, and we believe it will work well for Nature Valley snack bars, too. We expect to more than double snacks sales in China by 2015.”
Mr. O’Leary said the company recently brought Haagen-Dazs to India with the opening of its first flagship shop in New Delhi, and it has restructured its Brazilian business to focus on Nature Valley and Haagen-Dazs.
In total, Mr. O’Leary said General Mills plans to grow international sales by more than $1 billion by 2015, to a total of at least $3.7 billion. Half of the growth is expected to come from China.