CEO Jeff Harmening outlined his vision for the food giant to investors at its annual Investor Day at the New York Stock Exchangeon Wednesday.
“We’re writing the next chapter of the book that tells the General Mills story,” said Harmening, who took over the helm from Ken Powell on June 1.“And, like any good book, it relies on the chapters that come before but it can’t be exactly the same.”
Breaking the spell
Last month, General Mills posted a 3% decrease in Q4 sales, continuing the two-year trend since it last enjoyed a quarter of growth.
Full-year 2017 sales also fell by 6% to $15.62bn, with decline driven by volume reductions in developed markets like North America, Europe and Australia.
Harmening’s vision includes four key areas around cereal, yogurt, investment and growth.
He has pledged to concentrate on growing its Cereal Partners Worldwide (CPW) 50% joint venture with Nestlé.
Cereal growth: FY2017 figures from General Mills
- RTE cereal is a $23bn category, according to Euromonitor.
- US cereal revenues for General Mills were $2.3bn, making it the second-largest market share holder.
- CPW sales were $1.6bn.
He said the company was seeing benefits from both wellness and taste improvements in cereal, including creating gluten-free products, removing artificial colors and flavors and adding whole grains.
It will also concentrate on innovation for its yogurt brands and increase investment for brands such as Nature Valley, Fiber One, LÄRABAR, Old El Paso and Häagen Dazs.
The company’s Natural & Organic business in North America, too, will also be given a boost.
General Mills has been expanding this area since it acquired the Cascadian Farm and Muir Glen brands in 2000 and expects the nine brands it has in its portfolio to generate $1.5bn by 2020.
Not to be left out of the mix, the company’s foundation businesses – including refrigerated dough, soup and baking mixes – will largely see the same type of changes.
The Minneapolis-based food manufacturer earlier this week unveiled its line-up of new product launches for summer 2017.
What will impact the next five years
"I believe the most significant change that will impact the next five years will be in how consumers get their food, driven by the rapid acceleration of e-commerce."
Harmening noted General Mills will remain “laser-focused” on knowing its consumer and what's driving them.
“While the biggest shift in our industry in the last five years was driven by changing consumer food values, I believe the most significant change that will impact the next five years will be in how consumers get their food, driven by the rapid acceleration of e-commerce,” he said.
E-commerce currently represents about 1.5% of General Mills’ total sales in the US, and Harmening wants to push this to 5% by FY2020.
The global e-commerce platform is also seeing strong double-digit growth.
“We see this as an exciting opportunity for General Mills,” he added.