As Tastes Shift, Food Giant General Mills Gets A Makeover

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As Tastes Shift, Food Giant General MillsGets A MakeoverJune 23, 2015Robin Zebrowski/FlickrIt’s not just the Lucky Charms that are getting a makeover at General Mills. The company’sannouncement Monday that it is removing artificial colors and flavors from its cereal line is partof a much bigger overhaul at the food giant.General Mills is one of the biggest and most successful food firms in the world, with dozens ofimmediately recognizable brands. But, like all food companies, it is having to navigate alandscape where food tastes are changing fast, and familiar products no longer hold as muchsway with customers.Inside a test kitchen at General Mills research facility in Minneapolis, we got a peek at thecompany’s efforts to reinvent itself. A food developer cuts open a bag of frozen vegetables mixedwith lentils and empties them into a pan. It’s part of a new line of Green Giant products comingout this summer.Before now, Green Giant’s frozen vegetables were usually boiled stovetop or microwaved. Andthey were heavy on sauces like broccoli with cheese. Christine Shearer, a product developer atGeneral Mills, says the new products are meant to be sauteed quickly, which gives them a lotmore texture than microwaved vegetables."I always thought I hated Brussels sprouts when they were boiled," she says. But, she says, it’sall about preparation."Sauté them up, get a little bit of caramelization on it — the browning — the seasoning, and thenthrow a little of bit of bacon in there. Bacon makes Brussels sprouts wonderful," she says with alaugh.Shearer was part of a team at General Mills that recently worked on updating Green Giant, whichsells some 140 different kinds of vegetable products. More than a century after it was founded asthe Minnesota Valley Canning Company, Green Giant remains one of the most famous brands inthe world.At a time when many consumers say they want to eat healthier foods, Green Giant might seem tobe in a strong position. But consumers are increasingly demanding that their vegetables be fresh,and they want to know where their produce came from.1This new interest in fresh foods has slowly eaten away at frozen food sales, says Justin Massa,founder of the research firm Food Genius. And customers aren’t just drifting away from thefrozen food aisle. Massa says they’re increasingly seeking out new and different food types —they’re savvier about food and more comfortable with diversity. And this is hurting a lot oftraditional brands."I think there’s been a pretty dramatic shift across the grocery aisle in the last five years," Massasays. "There’s kind of very few sacred cows in the grocery store."Massa says sales of traditional cereals, for instance, have stalled over the past five years. AnnSimonds, chief marketing officer at General Mills, says that the slowdown in growth leavescompanies with a choice: They can cut costs by merging, like Heinz and Kraft did earlier thisyear. Or they can try to increase revenues with products that keep pace with consumer demands.Simonds notes that General Mills has recently introduced gluten-free Cheerios and low-sugarYoplait."We personally believe that in the long term, our shareholders, our employees, the consumers weserve will be better off if we remain focused on innovation and growth, while at the same timevery responsibly managing our cost structure," she says.But General Mills has also purchased smaller, more innovative food companies like the organicbrands Cascadian Farm and Annie’s — in part, Simonds says, because their entrepreneurialcultures drives innovation.Simonds says this is an exciting time to be in the food business. But for big companies likeGeneral Mills, it’s also challenging. Massa says big companies hoping to prosper have to makebig bets."If they’re going to add a new capacity to a manufacturing plant, that’s a $30 to $75 millioninvestment. They need to make a really, really big wins when they make those big bets, and that’sjust harder and harder to do," he says.Massa says big food companies often serve as stewards of iconic brands, keeping them goingyear after year. But if they want to grow, they also have to find a way to keep those brandsrelevant to modern consumers.2

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