BOCA RATON, FLA. — Three years ago, General Mills, Inc. announced its Accelerate strategy, an initiative focused on building brands, innovation, scaling and standing for good. Now, that effort continues to focus on trends that General Mills believes will define the consumer environment of the future, said Jeffrey L. Harmening, chairman and chief executive officer of Minneapolis-based General Mills.
“First, we’re seeing a continued demographic shift toward increasingly diverse, smaller and older households,” Harmening said in a Feb. 20 presentation at the Consumer Analyst Group of New York (CAGNY) conference in Boca Raton. “Second, we believe the humanization of pets will remain the biggest growth driver in the pet food category. Third, technological advances, including digitization and AI (artificial intelligence) will continue to how we work and how we interact with consumers.And fourth, climate impacts and change will continue to grow in importance on the agendas of our consumers, our customers, our employees and our investors.”
Harmening said all trends are critical as General Mills continues to focus on the things it can control in a world of constant volatility to drive long-term sustainable growth.
Harmening also talked about some of the details of the company’s Accelerate strategy, and where progress has been made.
On brand development, he said General Mills has increased its investment in media by 41% from fiscal 2018 to fiscal 2023, with investment in the high single digits in the first half of fiscal 2024.
“We feel good about the support we have to continue to deliver bold, relevant and modern messages that resonate with today’s consumers,” he said.
Innovation is another area where General Mills hopes to take a significant step forward during fiscal 2024, Harmening said, noting that he expects innovation to be a bigger contributor to the company’s growth as it moves forward. He describes General Mills’ innovation strategy as going beyond new products.
“We envision innovation across a spectrum from developing new products and platforms within our established brands to expanding our core into new segments and geographies to reshaping the portfolio through scaled back M&A as well also creating new vectors of disruptive growth through Gold Medal Ventures,” he said. “Supply chain disruptions over the past several years have had a wide-ranging impact from the ability to service customers to driving cost productivity as well as our ability to deliver significant scale in our innovation.”
Harmening said General Mills has made significant investments over the past five years to build a world-class digital and technology infrastructure to add scale and profitability. To that end, he said the company’s team of data scientists has grown from running 2,000 models per month to running more than 6 million models generating more than 500 million individual predictions monthly.
Another area of technology that is increasing in importance is AI. Harmening said General Mills is using AI to connect data on customer orders, provide disruptions and inventory levels to ensure it has the right product in the right place at the right time.
“This AI integration has resulted in higher levels of customer service, reduced warehousing and transportation costs and fewer trucks on the road each year,” he said.
Looking for pets
Regarding its pet food business, Harmening detailed General Mills’ efforts to reshape its portfolio, benefiting from previous acquisitions of Blue Buffalo and Tyson Pet Treats. He also noted that the humanization of pets is expected to be the company’s biggest driver of growth within pet food.
“Humanization trends and emphasis on quality ingredients have made Blue Buffalo the most loved, trusted and recommended natural pet food brand in the category,” shares Harmening. “The Blue Buffalo brand remains strong and our refreshed ad campaign seizes the opportunity to more effectively communicate with pet parents about the benefits of the great ingredients found in our Life Protection Formula line.”
Blue Buffalo reversed its Life Protection Formula premium volume growth, as detailed by Harmening, with retail pounds growing at a high single-digit rate for the past quarter. Harmening attributed this to the ingredient superiority messaging in Blue Buffalo’s campaigns that reportedly resonated with consumers.
Additionally, Harmening teased additional product offerings for General Mill’s pet food portfolio. Under Blue Buffalo, the company plans to introduce seasonal treats and convenient single-serve pouches of its Tastefuls Purees line that can be served as a snack, topper or treat. Harmening also mentioned the company’s recent acquisition of Fera Pet Organics.
“The acquisition gives us access to the fast-growing, $2 billion pet supplement category,” he shared.
In addition to the new product offerings, Harmening shared the success of the recent launch of Blue Buffalo in China.
“This is a category that has been growing at a double-digit rate for the past five years, and we believe that Blue Buffalo is well positioned to accelerate the emerging trend of humanization in this market,” he said.
General Mills is also using its Gold Medal Ventures arm to enter new spaces, such as the pet supplement market led by Fera Pet Organics and the cat-centric category carried by Smalls. The company intends to use these businesses to rapidly test and scale new product innovations, with the potential for these brands to become fully integrated under the General Mills portfolio.
Looking to the future across its business, Harmening shared that the company plans to enhance its commitments towards sustainability, including sustainable sourcing, reducing greenhouse gas emissions, promoting regenerative agriculture, introducing eco-friendly packaging, reducing water use, ensuring zero waste in landfills, using renewable energy, and promoting human rights and animal welfare initiatives.
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