Success in the away-from-home market
Today at our annual Investor Day meeting, John Machuzick, president of General Mills’ Bakeries and Foodservice division, highlighted a year of strong performance and detailed plans to grow the company’s away-from-home business segment.
In fiscal 2011, the division delivered a 6 percent increase in net sales, driven by growth in priority channels such as foodservice distributors and convenience stores, and the popularity of consumer-branded products such as cereal, yogurt and snacks in away-from-home channels.
John said the division’s strategy of focusing on the most profitable products and fastest-growing customer segments has played a key role in sustaining its strong earnings growth. In fact, over the last five years, Bakeries and Foodservice’s operating profit has increased at a 19 percent compound rate – growing 70 percent in the last two years alone.
With a market opportunity of nearly half a trillion dollars in the away-from-home category, John foresees strong potential for future growth. He outlined four keys to growing the Bakeries and Foodservice business in 2012:
- Concentrating on expanding General Mills’ great retail brand portfolio in away-from -home channels.
- Accelerating innovation in the channels that offer the best opportunities for growth – foodservice distributors and convenience stores.
- Continuing to focus on margin management following the streamlining of the bakery and national restaurant channels business over the last several years.
- Leveraging the division’s sales, category management and supply chain capabilities to add value for consumers.
John noted that new products will be drivers of sales growth in convenience stores this year, including the upcoming launches of Fiber One 90-calorie Brownies, Cookies and Cream Chex Mix and Nature Valley Recharge bars – a new snack bar with 10 grams of protein per serving.
In the foodservice section of the business, John’s team will look to develop products and capabilities that meet foodservice operator needs and tailor them to the uniqueness of this channel.
For example, Pillsbury Crescent Scrambles are arriving on college and university campuses nationwide. And the division is expanding its convenient hot breakfast line with the launch of Pillsbury Mini French Toast in packages that can go in the oven to meet the dynamic needs of K-12 school operators.
Other initiatives include the expansion of operator events like Pillsbury Biscuitfest, partnering this year with country singer Rodney Atkins to provide consumers with free music downloads and a chance to go to the Country Music Awards.
John believes that Bakeries and Foodservice’s new direct salesforce has given the division a competitive advantage. In 2008, the division began the process of converting its foodservice and convenience store channel salesforce from broker to direct. In 2012, the division will continue to expand the away-from-home direct salesforce to represent 80 percent of division sales in away-from-home channels.
The division’s ability to drive sales growth hasn’t gone unnoticed by its customers.
Two leading industry organizations, Cognito and IFDA, both named General Mills within their top three suppliers among all manufacturers in the foodservice industry.
And in the last year, many of the division’s largest customers have named General Mills as a supplier of the year for truly collaborating and contributing to their overall success.
Editor’s note: To listen to John Machuzick’s entire presentation, check out the full Investor Day webcast on GeneralMills.com. You also can see the live tweets from all of the Investor Day presentations, with the hashtag #InvestorGIS.