BOCA RATON, FLA. — Three years ago, General Mills, Inc. unveiled its Accelerate strategy, an initiative focused on building brands, innovating, adding scale and standing for good. Today, that effort continues with an eye toward trends that General Mills believes will define the consumer environment going forward, said Jeffrey L. Harmening, chairman and chief executive officer of Minneapolis-based General Mills.
“First, we see a continued demographic shift toward increasingly diverse, smaller and older households,” Harmening said during a Feb. 20 presentation at the Consumer Analyst Group of New York (CAGNY) conference in Boca Raton. “Second, we believe that the humanization of pets will remain the largest driver of growth in the pet food category. Third, technology advancements, including digitization and AI (artificial intelligence) will continue to permeate both 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 the trends are critical as General Mills continues to focus on the things it can control in a world of ongoing volatility in order to drive long-term sustainable growth.
Harmening also spoke to some of the specifics of the company’s Accelerate strategy, and where progress has been made.
In brand building, he said General Mills has increased its media investment by 41% from fiscal 2018 to fiscal 2023, with investment up high single digits through the first half of fiscal 2024.
“We feel good about the support we have in place to continue to deliver bold, relevant and modern messages that resonate with today’s consumers,” he said.
Innovation is another area General Mills expects to take a significant step forward in during fiscal 2024, Harmening said, noting he expects innovation to be a larger contributor to the company’s growth as it moves forward. He described General Mills’ innovation strategy as much more than just new products.
“We think of innovation on a spectrum from developing new products and platforms within our established brands to an expansion of our core to new segments and geographies to portfolio reshaping through scaled M&A as well as creating new vectors of disruptive growth through Gold Medal Ventures,” he said. “Supply chain disruptions over the past few years have had a broad impact from the ability to service customers to driving cost productivity as well as our ability to deliver meaningful 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 that generate 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 across customer orders, supply disruptions and inventory levels to ensure it has the right product in the right place at the right time.
“This integration of AI has resulted in higher levels of customer service, reduced warehouse and transportation costs and fewer trucks on the road each year,” he said.
Looking to pets
Regarding its pet food business, Harmening detailed General Mills’ efforts to reshape its portfolio, which has benefited from previous acquisitions of Blue Buffalo and Tyson Pet Treats. He also noted that the humanization of pets is anticipated to be the company’s largest driver of growth within pet food.
“The humanization trends and emphasis on quality ingredients has made Blue Buffalo the most loved, trusted and recommended natural pet food brand in the category,” Harmening shared. “The Blue Buffalo brand remains strong and our refreshed ad campaign is capitalizing on the opportunity to more effectively communicate with pet parents on the benefits of superior ingredients found in our Life Protection Formula line.”
Blue Buffalo has restored volume growth of its premium Life Protection Formula, as detailed by Harmening, with retail pounds growing at a high single-digit rate for the past quarter. Harmening attributed this to ingredient superiority messaging throughout Blue Buffalo’s campaigns that have 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 touched on 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 new product offerings, Harmening shared the success of Blue Buffalo’s recent launch into China.
“It’s a category that has been growing at a double-digit rate for the past five years, and we believe Blue Buffalo is well-positioned to accelerate the emerging humanization trend in this market,” he said.
General Mills is also leveraging its Gold Medal Ventures arm to enter new spaces, like the pet supplement market brought on by Fera Pet Organics and the cat-centric category brought on by Smalls. The company aims to leverage 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 entire business, Harmening shared that the company plans to enhance its commitments toward sustainability, including sustainable sourcing, reducing greenhouse gas emissions, advancing regenerative agriculture, introducing eco-friendly packaging, reducing water use, ensuring zero waste to landfills, utilizing renewable energy, and furthering its human rights and animal welfare initiatives.
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