General Mills Remains in ‘Early Innings’ in Leveraging Data
General Mills remain committed to continuing its e-commerce momentum.
The company reported net sales growth of 9% to $4.4 billion for its fiscal first quarter; organic net sales were up 10%, much of which is attributable to the increase in at-home food consumption as a result of COVID-19.
Looking forward, the company expects that the general direction of its product categories will remain unchanged through the rest of the year, with the current trends affecting both category elevation and headwinds remaining consistent.
“Until we get a vaccine at scale, we would expect continued growth across many of our categories [and] our job now is to compete effectively,” said Jon Nudi, president, North America retail. “We can’t control the category growth rate. What we can control is how we compete in the categories, and that’s what we are laser-focused on at this point.”
This expectation of consistency extends to its e-commerce sales, which have been elevated since the start of the pandemic. E-commerce sales represented about 9% of the No. 35 consumer goods company’s total global business, up from about 5% a year ago. For North America, it represents about 8% of total sales vs. last year’s 4%.
While this lift is attributed to shifting consumer behavior as a result of the pandemic, the company is investing in its e-commerce capabilities because it believes digital growth will continue, with benefits extending beyond the health crisis.
“It’s important that we invest in e-commerce ahead of the curve, especially getting consumers on e-commerce for the first time, because it tends to be relatively sticky,” said Jeff Harmening, chairman and CEO. “Once you have Honey Nut Cheerios in your basket, you tend to go with Honey Nut Cheerios, and so being first in the basket is certainly something important with e-commerce.”
“It’s also important to note that the economics for our business, going through e-commerce channels vs. just grocery stores is about the same predominantly, because most of our sales to e-commerce actually still go through grocery stores,” he added. “And so the investments that we have to make are not really in physical infrastructure or distribution centers or packaging changes; they really have to do with more of a digital capabilities, and the payback on those tend to be relatively fast.”
The company is also leveraging its brand websites differently in order to understand and engage with consumers, particularly Pillsbury.com and Bettycrocker.com, which receive 7 million unique visitors each month. The digitization of its longtime Box Tops for Education program, meanwhile, has relayed more than 25 million digital receipts that the company can use to build personalized relationships with consumers.
The company remains in the early innings for its ability to leverage the data it's collected and put it to market, Nudi said, with a lot of the benefits still to come. “One of the things that we are doing to is partnering externally, probably more than we have in the past, with some big tech companies that are really helping in the space. So, when we think we have some really unique first-party data, I think we are getting after it more aggressively than we have in the past.”
E-commerce remains a moving target, Harmening noted, not just for General Mills but for the entire consumer goods industry.
“I think in e-commerce, we are just like all retailers and manufacturers. There will be winners and losers when it comes to manufacturing their products, and we intend to be on the winner part of that equation, which is why we are investing.”
He added: “We feel good about what we have done so far, but we are not arrogant, because it’s a moving target and we will need to continue to invest and make progress against that if we are going to win into the future. And so while we are pleased with what we have done so far, rest assured that we are not resting on our laurels, because there is a lot more work to do.”