General Mills CEO: Sustained sales must be earned with solutions to ‘real problems’ in the kitchen & society

17-Jul-2020 - Last updated on 17-Jul-2020 at 15:48 GMT

Ongoing social distancing requirements, the resulting recession and a rediscovery of the joy of cooking and baking will help sustain some, but “certainly not all,” of the surging sales enjoyed by many CPG food and beverage brands since the coronavirus pandemic began, predicts General Mills CEO Jeff Harmening.

But, he added, brands cannot take this business for granted and must continue to meet consumer demands for innovative, high quality products as well as their rising standards for social values, including sustainability and racial equality.

Speaking during the inaugural session of the Consumer Brands Association’s new leadership education series, CPG Speaks, Harmening explained that while General Mills’ 21% sales growth during its most recent quarter is in part because its category grew, but also “fundamentally because we are doing things differently.”

Sustaining elevated sales

The surge in grocery sales across categories that many CPG companies have experienced since the coronavirus pandemic began, likely will continue to “be elevated for a period of time … even after the pandemic has run its course, which I think is going to be a little while from now, [because] we are still going to be faced with an economy that is going to be really challenged in a time of recession, and people tend to eat more food at home during a recessionary period,” Harmening said.

He also said people will continue to cook at home not just because they have to due to social distancing requirements or economic constraints, but because “people have really found that the kitchen is the heart of the home,” and in particular baking as given consumers “something, in some cases, that wasn’t there before.”

As consumers return to the kitchen, many also are returning to iconic brands that “they can count on,” because “so much around them is unknowable and so much is changing – whether it is the landscape on race or the whether it is the global health pandemic – people yearn for some certainty and yearn for something they can count on, and for a lot of people … it is our brands that they count on,” he said.

Brands must address ‘real consumer problems’

But for General Mills and others to make the current heightened demand “stick,” they need to support consumers, which includes maintaining and evolving marketing so that is solves “real consumer problems, and not ones that are made up on our own or that we think would be interesting, but what are consumers really interested in.”

For example, he said, many consumers likely have flour in their cupboards for the first time “and they kind of don’t know what to do with it, and so making sure that we are helping solve some of the basic needs of things they have in their pantry” through back-to-basics marketing.

Consumer are responding positively to this strategy with traffic up 100% on bettycrocker.com and pilsbury.com as they search for baking solutions, he said.

At the same time that companies meet the basics, they “must keep innovating and keep meeting the demands of our consumers,” which for General Mills means being “able to chew gum at the same as walking, [where] walking is the day-to-day execution of the pandemic and the chewing gum piece is all the other things, including innovation and sustainability.”

He added this also means doing things “to make sure we leave the world a better place and to make sure we take care of all of our stakeholders,” even if “they are not what gets the press clippings.”

‘We need to be a part of the solution’

For Harmening and General Mills this means taking a leadership position in responding to the death of George Floyd, a Black man killed by a white police officer, in the city where the company is headquartered.

“It has been tough to watch the city you love be torn apart by this, but the fact of it is, what we see with George Floyd is not a new problem. It is a problem that has existed for awhile, and frankly, it is not just a Minnesota problem as demonstrated by the demonstrations around the US and around the world,” Harmening said.

“When you talk about systemic racism, it has existed here in the US for 400 years,” and Floyd’s death and the demonstrations it sparked “has really …opened my eyes to the challenges before us and … to the systemic changes we have to make in policing, education, and health care. And there is a lot of work ahead of us, and as proud as I am of what General Mills has done over the last few decades, it is very clear there is more we need to do and we need to be a part of the solution, not only General Mills, but business in general.”

A 5-part strategy to fight racial injustice

For General Mills, Harmening laid out a five-part strategy to push against injustice. The first step, he said, is to realize the answers are not going to be all be immediate, they are going to be longer term, but that you also need to have some immediate progress.

In the short term, he said, General Mills has provided “immediate relief … specifically in the area of food pop-up pantries here in the Twin Cities,” and by donating time, money and energy to help rebuild damaged buildings in its hometown.

Longer term, the company wants to convene and engage with other businesses to find solutions together. Harmening explained that General Mills’ inclusivity efforts are not proprietary and it wants to share and learn from others.

“This partnering piece is important because businesses can’t solve racism alone. Neither can government. Neither can community leaders. It has to be a combined effort,” he said.

Finally, Harmening said, General Mills wants to lend its voice to policy support.

“General Mills is not going to recreate police policy, but we can lend our voice along with others in the Twin Cities to make sure we see policy reform. We have done that and we have done the same thing with education reform,” he said, adding, “we are in it for the long haul.”

Not only is the company committed to long-term support, but it already has a track-record of inclusivity, which Harmening said provides a platform for trusted, authentic and sustained change.

For example, the company’s Wheaties brand has a long history of celebrating Black and white champions, and Cheerios has been an “inclusive brand for a long time,” which make them good platforms to discuss racial injustice.

Beyond brands, General Mills also has a history of advocating for increased diversity among its suppliers – not just of ingredients, but marketing and other services as well, Harmening said, adding this is a core company value, because “nothing gets people out of a current system of injustice like economic justice.”