Champions of packaging progress and innovation: armed with the packaging resources to control its own success, General Mills embraces the future with confidence in its winning brands and strategies - General Mills Food Packager Of The Year

Food & Drug Packaging, Oct, 2003 by Lisa McTigue Pierce, Pan Demetrakakes, Chris Barry

It's been a good year for General Mills. The company launched 116 new products in fiscal year 2003, from June 2002 through May 2003. Brisk as it was, that pace will continue. In first two quarters of 2004, General Mills will introduce 81 new products, new varieties and line extensions. In the first quarter alone, the company earned $2.52 billion, with sales up 7% overall.

Steve Sanger, chairman and chief executive officer, is pleased with these results. "We've started the year with good financial performance, and with good levels of product innovation across all business segments," Sanger says. "Our first quarter gives us a good start heading into the fall and winter seasons, our largest earnings period of the year. "The numbers put the company on track, says Sanger, to achieve its 2004 financial targets. In the new fiscal year, General Mills will experience fewer costs and more savings from the October 2001 acquisition of dough-maven Pillsbury.

Sanger outlines the company's key growth strategies, saying, "We plan to drive our growth in 2004 and beyond by focusing on the same four strategies that fueled our past performance."

Those strategies are:

* Product innovation, to increase unit volume and market share.

* Channel expansion, to ensure that the company's products are available wherever people buy food, from dollar stores to delicatessens.

* International expansion, to build the company's brands in fast-growing markets around the world.

* Margin expansion, to grow earnings faster than sales.

It helps that General Mills has a broad portfolio of winning brands, from dry goods to frozen products, from snacks to meals, from soup to dinner rolls and ice cream. Its popular brands include Big G cereals (Wheaties, Cheerios and more), Yoplait and Colombo yogurts, Pillsbury dough products, Old El Paso Mexican dinner kits, Green Giant vegetables and meal starters, Progresso soups, Betty Crocker mixes, Hamburger Helper meal kits, Pop Secret popcorn, Gold Medal flour, Nature Valley granola bars, Fruit Roll-Ups fruit snacks, Haagen-Dazs ice cream, 8th Continent soymilk, Muir Glen and Cascadian Farm organic products, Lloyd's barbecue, Totino's pizza and Bugles snacks.

The success of General Mills centers around its talented people, all working toward two goals: to drive costs out of the system and to build No. 1 brands, a position many of them already hold (see "Top brands enjoy leading market positions" on p.32).

Top brands and talented people are part of the reason General Mills is Food & Drug Packaging's Food Packager of the Year. We also looked for a company that has shown courage and creativity in packaging in the last 12 months, two qualities that General Mills has in abundance.

In this article, executives in packaging development, brand design, packaging engineering and purchasing share their insights and strategies on fueling innovation, achieving synergies, driving production efficiencies and keeping customers excited about the company's brands.

Inspiring innovation

General Mills is always looking for ways to improve market share and get consumers interested in its products. Innovative packaging is just one way of adding value for its customers, whether they be consumers, retailers or foodservice operators.

Jay Gouliard, vice president of packaging development, says, "Innovation is not something that comes easily to any company. Creativity, coming up with new ideas, is [easy], but taking those ideas and making them commercial reality, which I define as innovation, is always difficult."

In the last year, though, General Mills has made it look easy by creating a number of new packages. Among them are Pillsbury freezer-to-oven biscuits in a stand-up pouch, Star Wars glow-in-the-dark Go-Gurt yogurt tubes, a special Star Wars hologram cereal box, cereal-in-a-cup for foodservice and a cereal pouch for the U.S. military.

"Innovation isn't just the new shape of a package or the new color on the shelf. Innovation is also about process and materials and optimization of existing structures," Gouliard says. "The role of our group is to create the next generation of value-driving packages and materials that reenergize existing brands and bring new brands to life. For every line extension and every new product, we have a packaging engineer looking at that particular

package to make sure that we protect the product, and more importantly the equity of the brand, by insuring that there are no adverse interactions between the product and the package, that the package is structurally sound and that it communicates the essence of the brand."

Packaging innovations help build No. 1 brands, but the innovators must keep both eyes on costs. Gouliard says that innovation can and should be applied to both the top line and the bottom line.

"Typically, you can't introduce an innovative new package at the same cost that you've been running a highly optimized package for the last 20 years," he says. "But our marketing organization understands the value of innovation, and there's always the vision that, over the long term, we can get the cost down into the same range that we're operating within today."