Need to Know
- General Mills is using machine learning, data analytics, and enterprise solutions to boost its bottom line, improve customer service, and digitize its marketing programs for 2020.
- General Mills’ global e-commerce sales are up 30% through the first half of its fiscal 2020, but the CEO doesn’t expect the 3% of the company’s US sales that represent e-commerce to grow beyond 10% within the next five years.
- After flat sales in 2017 and ushering in new CEO Jeffrey Harmening, new products and existing brand innovations now represent 5% of global sales, up from 3.8% in 2017.
- General Mills owns three of the top five food websites and participates in 26 different categories and channels in the US.
- In Q3 2019, General Mills saw net sales rise 8% and operating profit increase 14% compared to 2018.
The more data a company has, the more data that can be leveraged to make better business decisions.
That’s why General Mills, owner of huge brands from Pillsbury and Betty Crocker to Cheerios and Häagen-Dazs, announced new plans to use data analytics to boost its bottom line. By improving demand forecasting and lowering supply chain costs, digitizing legacy programs like the 23-year-old Box Top for Education, and connecting with consumers in new, personalized and digital ways General Mills is looking to leave behind its stagnant sales from 2017 and continue its growth.
“One of the most important ways we’ll do this is by making data and analytics a strategic priority for our company,” said Jeffrey L. Harmening, chairman and CEO. “We’ve begun investing this year to enhance our sources of data, improve our analytical tools and build a dedicated team with unique skills to unlock significant data-driven opportunities for our business. This capability has a potential for far-reaching benefits.”
Many companies currently use some form of data analytics, but for a massive food producing conglomerate such as General Mills, it can be difficult to roll out data-driven solutions across a portfolio of brands, and even harder to see real return form those investments.
Harmening talked about the digitization of the Box Tops for Education program in a Consumer Analyst conference earlier this week as an example of personalizing customer experiences: “We’ve already seen 1.5 million consumers download the app, and we believe we can unlock future growth by better understanding consumer preferences allowing us to personalize offerings, fully leverage the power of our portfolio and improve both in-store and online experiences.”
The Box Tops for Education program turns receipts into donations for local schools by providing cashback for purchases and funneling it into charity programs.
Harmening mentions that General Mills is in a unique market position as an enterprise player that spans across continents, categories (from pet food to yogurt to Mexican food), and a huge amount of consumers. Not only that, but its products are sold in upscale stores like Whole Foods, to big-box stores like Wal-Mart, to every convenience store in a local neighborhood.
Harmening says, “Even more importantly, we see data and analytics as an advantaged source of growth for our business. For example, data and analytics will improve the way our sales organization partners with customers to develop customized solutions by category and geography. It will amplify our strategic revenue management capability to unlock price/mix opportunities at a channel and s.k.u. (stock-keeping unit) level. And it will enhance our marketing efforts by delivering better insights that lead to personalized consumer communications.”
General Mills has “focused more on growth and a little bit less on just cost” as it enters new markets with the acquisition of companies like Blue Buffalo. With the help of machine learning and enterprise solutions, as well as new marketing and digital officers to develop strategies for growth parts of the business, General Mills is hoping to streamline their costs, and be able to customize their global strategies for local audiences.
But Harmening also said that he doesn’t expect e-commerce, which now represents about 3% of the company’s U.S. sales, to grow beyond 10% within the next five years. “So we need to make investments in e-commerce… but we also have to pay attention to the 90% that will not be e-commerce,” he said.