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Monday, February 26, 2024

General Mills reaches ‘transition point’ with digitization investments ready to pay off

“We are at a transition point in our journey and unleashing our scale for differentiated performance through digital capability. Having spent recent years investing to build a best-in-class digital infrastructure … I am very encouraged by our progress, and I am confident that our digital capabilities will be a source of meaningful competitive advantage for General Mills over the long term,” Harmening said.

He explained that since 2018, General Mills’ team of data scientists has increased 40-fold so that it can now run more than 6 million models a month that generate more than 500 million individual predictions monthly, compared to running just 2,000 models per month six years ago.

This investment has helped the company “unlock opportunities” in e-commerce, data-driven marketing and supply chain digitization, he added.

E-commerce growth outpaces market thanks to optimizing search, content & reviews

Within ecommerce, Harmening said, General Mills has invested in optimizing search, content and reviews to boost awareness and encourage trial – a strategy that has helped its e-commerce business grow from 4% of US retail sales pre-pandemic to the mid-teens today, excluding pet food.

“Our market shares online continue to outpace our shares in brick-and-mortar outlets and with a disproportionate amount of food industry growth projected to come from e-commerce over the next five years, we are well positioned to capture outsized growth in this important consumer space,” he said.

The company also has invested in first-party platforms, including bettycrocker.com, Pillsbury.com, Good Rewards and Box Tops for Education, which allow it to engage directly with consumers and deepen personalized connections.

“With these first-party capabilities, we are able to narrowly define specific target audiences, deliver personalized content, and use incentives to drive purchase behavior, therefore, improving our overall marketing effectiveness,” he said.

This strategy allowed it to lift the effectiveness of Nature Valley’s marketing in the high single-digits – a promising outcome that prompted it to divert nearly 70% of the brand’s spending to this personalized and iterative approach.

Digitization streamlines supply chains, inventory management

The company’s investment in digital and technological capabilities are also creating efficiencies in General Mill’s supply chain, including reinforcing its resilience and improving margins.

“For example,” Harmening said, “in our sourcing organization, we’re using data and enhanced external monitoring linked directly to our systems to predict and manage upstream disruptions in our supply chain.”

Within manufacturing, digitization has provided real-time data that allows line operators to optimize throughput, lower costs and reduce waste, he added.

Finally, within General Mills’ logistics network, AI is now used to link customer orders, supply disruptions, and inventory levels “to ensure that we have the right product in the right place at the right time,” while also lowering storage and transportation costs, he said.

Michael Maren
Michael Maren
Former marine biologist who likes to spend as much time in the tropics as possible, due to a horrible time I once had in Alaska. Brrrr.

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