When consumer tastes are continuously changing, companies can sometimes miss, but the goal is to keep innovating so that it can make the hits that count. Or to put it in the words of General Mills Inc.’s chairman and CEO Jeffrey Harmening: “Perfection is not the goal,”
“There’s no doubt that it’s a dynamic environment,” Harmening told attendees at a Boston investor conference. “And when you say dynamic, people immediately see all the challenges. And there are challenges. But the flipside of those is opportunities for those who are willing to take it.”
General Mills “clearly missed the trend” in Greek yogurt, launching its own product late, but the company which originally sold just flour has also scored many wins, including inventing the Nerf ball, and for years owning board game maker Parker Brothers.
“One of the reasons that we’ve been successful is that we’ve changed over time,” Mr. Harmening said. “We’ve lasted 150 years for a reason, and that’s because we like to win and we’re up for change.”
While the company can’t “chase” every new trend that pops up, General Mills’ management and board will remain focused on delivering what the consumer wants, “where they want it and how they want it.”
“And that might mean for us Wanchai Ferry dumplings in China — we’re actually delivering it under 30 minutes warm in Shanghai,” he said. “It might mean selling pet food. It might mean a number of things, but it really is staying focused on what the consumer is looking for.”
In the company’s fiscal fourth quarter earnings call last week, Harmening said that the year represented an important step “in returning General Mills to sustainable top line growth.”
“We finished the year on a positive note in the fourth quarter delivering top and bottom line results that met or exceeded our most recent guidance, including a third consecutive quarter of organic net sales growth as well as strong growth in profit, margins and earnings per share,” he said. “We made significant progress against our global growth priorities in fiscal 2018.”
The company posted growth in organic net sales, as well as enhanced its capabilities in e-commerce and strategic revenue management, Harmening said. One leading product for next year will be “highly-profitable” premium natural dog and cat food the company now offers due to its recent acquisition of Blue Buffalo Co. Ltd. The company will also focus on maintaining efficiency, and including eliminating 625 positions by 2019.
“As we turn to fiscal 2019, we will continue to follow our Consumer First strategy and invest behind our global growth priorities to accelerate our topline growth again,” he said. “We are also keenly focused on maintaining our efficiency in this more inflationary cost environment, and we have initiatives underway to help protect our profitability and continue to drive cash flow.”
Jeffrey Harmening, CEO and Chairman of General Mills
Headquarters: Minneapolis, MN
Education: DePauw Universityy (B.A.), Harvard University (M.B.A.)
First joined company: 1994
Positions prior to being named CEO: President and Chief Operating Officer
Named CEO: 2017