General Mills to Overhaul Supply Chain 'Built for a Different Time'
As General Mills navigates a challenging consumer backdrop, it will implement a cost-savings strategy that will include end-to-end business optimizations.
The environment is changing quickly.
Jeffrey Harmening, CEO, said during the recent earnings conversation that consumers have always cared about things like their food tasting good and being good for them, as well as value and convenience. "But those definitions change over time. E-commerce is kind of the new convenience. We know consumers care a lot about value, which is why the base pricing worked so well last year. They care about health, and now it's really all about protein. And the question is how long will all of these things last?"
The answer, he said, is "unknowable in a volatile environment."
In response, General Mills will shift from a price investment strategy and toward an approach that encompasses "innovation and renovations to packaging and brand communication that deliver the benefits that matter the most to today's consumers, supported by stronger price/mix with a heavy emphasis on mix from premium innovation, price-pack architecture and trade efficiency."
The global transformation initiative aims to generate at least $750 million in total savings in fiscal 2027, with $1 billion coming directly from a redesigned supply chain network that will streamline business processes and create a more agile and efficient structure.
"Our supply chain was built for a different time — a little bit lower volume. We've seen that we need faster innovation, more packaging flexibility. And so it's really about thinking how do we reimagine the supply chain for the future so we can get that profitable growth," said COO, group president of NA retail and NA pet and director Dana McNabb.
Also: General Mills' Dana McNabb to lead digital, supply chain, growth teams
Overall, the program is set to impact product innovation, packaging, brand communication, omnichannel execution and consumer value.
"It's really about improving the end-to-end business processes and identifying new ways of working when you think about new tools and technology operating models to be more agile," said McNabb.
