Introduction:How did General Mills, the world's food giant with well-known brands such as Häagen-Dazs, Betty's Kitchen, Wan Chai Pier and Uno, come to be?
Jin Mei |Author Stone Business Review |Produced
How big of a business can a flour mill make? General Mills has the answer.
On the big stage of the food industry, this giant has risen from a wheat flour mill to a Fortune 500 company. General Mills, known as the big devil of the food world, is the all-around champion of the American agricultural circuit.
On both sides of the Mississippi River, its 120-year war with Pillsbury, and its fictional Betty Crocker housewife, it has almost shaped the American dining table and the image of the American family.
Like Procter & Gamble, it is a savvy international competitor, with brands such as Häagen-Dazs, Betty's Kitchen, Wan Chai Pier and Uno, as well as a product philosophy that has made it stand on the world.
War on both sides of the Mississippi River
In 1866, on the left bank of the Mississippi River in Minnesota, USA, wheat and corn were abundant, and agriculture became one of the main pillars of the local economy. General Mills built a huge mill by the river, backed by a grain producing area, and the company was born.
Three years later, across the river, the Pillsbury Flour Mill began a century-long battle with it. From flour to snack food, breakfast, convenience food, from home to the world, both are with you.
In 1880, General Mills began experimenting with branding, and a few years later launched the Gold Medal flour, which won numerous awards.
Pillsbury, 1889, Pillsbury Company'S Best flour, with a strong smell of gunpowder, was launched, and won the gold medal at the Chicago World's Fair the following year. After 1895, Pillsbury's flour entered the international market and was exported to Europe.
In 1901, General Mills launched a marketing campaign. But the following year, Pillsbury took the crown as the largest flour maker in the United States. In 1910, Pillsbury launched its first recipe book to give away flour and sold well, and in 1913 products such as pastries and bread mixes were launched.
Not to be outdone, General Mills also followed suit with a recipe and developed a new nutritional drink the following year, kicking off product innovation.
What brought General Mills back to the fore was a textbook brand marketing.
In 1921, General Mills created the fictional image of the perfect housewife as Betty Crocker. Through TV commercials and letters from readers, she has succeeded in inspiring pride and guilt among housewives in society (similar to Betty's pride, and less guilty) and subconsciously believing that General Mills' Gold Medal would make them the perfect housewife.
In 1923, not to be left behind, Pillsbury also started TV advertising marketing, but at this time, Betty had already become a social machine.
Betty warned American women on the radio: "If you stuff a man's stomach with boiled cabbage and greasy fried potatoes, do you think it's strange that he wants to fight someone else or go out to commit a crime?" ”
In 1924, the first cooking show in the United States, Betty's Baking Kitchen, was born, and she preached that being a good housewife could also be a career fulfillment, and took the opportunity to put General Mills products into the hands of more than a million housewife fans. General Mills not only created a variety of products for housewives, but even created the identity of American housewives.
When the New York Stock Exchange crashed on October 29 of that year and the "Great Panic of 1929" began, the diversification of both companies coped well with market changes. In 1936, the General Mills brand "Betty's Kitchen" was launched, and it became a matter of course under the strategy of diversification.
Housewives who left the house during World War II needed a simpler three-meal solution, and the timely product launch, the emotional connection and channel laying of users for many years, allowed General Mills to once again conquer the American kitchen.
In 1941, General Mills launched the small-grained ready-to-eat cereal "Crispy Grain" to compete with the Kellogg Company's ready-to-eat corn flakes. This product, which can be brewed with cold milk and claims to have more dietary fiber and vitamins, has successfully taken a piece of the pie from the category pioneer.
This ready-to-eat cereal is easy to carry and can be stored, and it greatly satisfied the daily life of soldiers in World War II. In addition, its high-energy k-ration food has also entered the military list, making General Mills soar.
The three giants of the US grain market (Kellogg's, General Mills, POST) account for nearly four-fifths of the market, and it is difficult for other competitors to enter.
The three giants dominate almost every market segment, firmly controlling the ** and the shelf. If Pillsbury finds a new gap in the market and produces a product, the Big Three will follow up with the products to clear Pillsbury's products out of the market in just 5 years.
Relying on channel advantages and unmatched advertising costs, General Mills has established itself in the U.S. grain market. If one of its breakfast cereals is out of stock, there is no need to worry about losing customers, because consumers will buy different flavors of cereal.
As times have changed, General Mills has not forgotten to improve its products. As the war ended and more women returned to their families, Betty Crocker's cake mix, which "makes making cakes as easy as instant coffee," began to hit a sales halt.
In 1950, General Mills invited the famous psychologist Ernest Dichter, the "father of motivation research", to find a solution. Dichter said that removing the egg powder from the ingredient list and letting everyone break into fresh eggs can only arouse their sense of ownership and feel that it tastes better. The advice worked, and sales of cake mixes have risen rapidly since then.
At the same time, General Mills seized the new trend and introduced frozen foods, and the product began to diversify. It wasn't until the early 60s of the 20th century that the lag of Pillsbury, which had only entered the fast food market, became more and more apparent.
Stand on the top
In the early 1960s, General Mills entered the yogurt market with the acquisition of Yocrunch; In 1966, the star food in the puffing industry was launched-Miao Crispy Corner; In 1968, the Hamburger Helper was launched and entered the field of ready-to-eat food.
Pillsbury, which failed to take the first mover advantage in the field of quick-frozen food, became the largest canned vegetable merchant in 1979 through the acquisition of the "Hulk", which was popular in the frozen food market.
In the 70s, the world economy ushered in the first place again, and in the face of economic uncertainty, market saturation and the trend of internationalization, diversification once again became the main theme of the company.
At the time, General Mills was involved in a wide range of industries, from Eddie Bauer to Parker Brothers, which produced Monopoly games.
However, the complex product structure and the resulting bloated organization led them to reorganize their enterprises in the 80s of the 20th century. General Mills decided to focus its business on the most promising and profitable food and restaurant sectors, focusing on hundreds of food products, as well as two restaurant chains, Red Lobster and Olive Garden.
In the 90s, the grain market was shaken by a huge shock, and the big three, which had been avoiding head-to-head confrontation, began to face each other. In 1993, they spent more than $1 billion in the U.S. market, accounting for about a quarter of advertising spending in the food market. In the same year, U.S. manufacturers signed 25 billion coupons, and almost a quarter of all purchases were made with coupons, reducing the selling price by 20%.
They spend ** to occupy the high-quality shelves at eye level, and they also place heavy advertising. Huge heart patterns are printed on food crates with the label "Good for Good Health". The bottom shelves are mainly placed in large packages or children's cereals, **packaging, delicious**, making it easier for children to choose products.
In this war, General Mills lowered prices while also launching new products that required meticulous craftsmanshipThe irreproducible product made General Mills's new products sell higher**, while the ordinary products forced Gong Kellogg's with a lower **, successfully stealing 3% of the market.
At the beginning of 1999, General Mills was 32The 5% sales market share (driven by Thanksgiving's Chex cereal) surpassed Kellogg's by 31With a market share of 6% (although Kellogg's still leads in terms of total sales), it has taken away the position of market leader.
In the late 90s, due to changes in the habits of American life, there was no time for breakfast at the table. From 1994 to 1998, the U.S. breakfast cereal market fell from $8 billion to $7.2 billion, and ready-to-eat muffins became the new choice.
WhileGeneral Mills, which has a full layout, has not been affected by these fluctuations. In 1997, General Mills also acquired the popular Wan Chai Pier dumplings in Hong Kong, attacking China's frozen food market and opening up its second largest market outside the United States.
The Matthew effect of the stronger the stronger, so that the head brand has 3 times the profit of the non-head brand, and the small brand in the market is struggling.
In 2001, General Mills spent about $10 billion to acquire the Pillsbury business of its declining former rival from Diageo, bringing the Mississippi River War, which lasted for more than 130 years, to an end.
As the smoke recedes on both sides of the Mississippi River, the combined General Mills has become one of the world's largest food companies. Cereals gradually went from being its number one business to one of the equal in terms of meals (Burger Helper and Hulk) and desserts (Pillsbury and Crowker's Desserts).
In 2022, its operating income was 200$9.4 billion, with a net profit of 25.5$9.4 billion.
Product philosophy, small steps forward
From competing with rivals across the strait to pocketing rivals, General Mills' century-long process is inseparable from its pace of keeping pace with the times, and even more inseparable from its "product philosophy of small steps".
In these stories of conquering the city, General Mills' products have played an important role.
General Mills has a globally consistent standard process for developing new products, which almost always guarantees that its products are superior to those of the competition.
First of all, in this process, the consumer's appeal is the direction of product development. They make sure that their products are closely related to the needs of their users, which is why they are able to tear off a piece of the market with oatmeal in corn cereal, and to take on new traffic when the oatmeal market is shrinking.
Mark Attics, chief marketing officer at General Mills, said the best advice he ever received was, "Be humble and be a good listener." "Listening" here includes not only survey interviews with users, but more authentic and effective information is "observation", where the user's body language and concentration are more real than their questionnaires and answers.
They say that in such a fast-paced era, with consumption upgrading, we believe this consumer-first strategy is more important than ever.
Second, brainstorm with all the staff and make adjustments step by step. General Mills firmly believes that there is no successful product, and after obtaining a large number of user needs, General Mills will organize the R&D team, marketing personnel, experts and external leaders to brainstorm and brainstorm.
The many ideas and ideas generated are summarized into several main product innovation directions, and then the R&D team, businessmen, chefs, and core product demanders cooperate to design the formula, produce the finished product, invite the target users to taste, summarize the advantages and disadvantages of the product from their feedback, and the next adjustment direction.
Interviews, brainstorming, and discussions generate a plethora of meaningful, actionable good ideas after several rounds"Interview-Discussion-Experimentation-Tasting-Improvement".After such a circular process, the product will be improved day by day.
In addition, they are blindly tested before the product is launched. General Mills believes that it can do it, and must do it, to outperform its competitors in order to gain a competitive advantage. They will bring in all the competitors' products in the market for blind testing until their products are 100% consistent.
Having an edge that is strong enough to win the competition and having a niche is an absolute necessity. The company's CEO, Adwat, said. If the results of the blind test are not the case, then the R&D and marketing departments will have to raise the alarm.
Finally, the product to the market needs the support of products and channels, but it is also inseparable from the support of modern technology. With a wide product line, should General Mills grind more flour or should it be used for more breakfast cereals? These decisions require a large amount of accounting information to support them.
Users need cost-effective products, which requires enterprises to have good operational efficiency. A long time ago, General Mills watched NASCAR logistics crews work to switch production lines from Betty Kitchen products to other products in 45 hours reduced to 12 minutes.
The food industry has been slow to respond to changes in the outside world, but now in addition to the healthy transformation of products, the optimization of digitalization and channels, and the use of digitalization to get close to the consumer ecosystem have also become the key to the success of enterprises.
While General Mills has achieved unprecedented success with these strategies, it has not been invincible. When it entered the Japanese market, General Mills made a similar mistake as Procter & Gamble, directly copying the marketing path in the United States, but Betty, which was very popular in the United States, failed to cause any sense of beauty and warmth in the hearts of the Japanese, and its high ** also made its products difficult in Japan.
In contrast, General Mills' roads in China are much smoother.
In 2001, General Mills acquired "Häagen-Dazs", and the compound annual growth rate of Häagen-Dazs has remained above 20% for nearly 15 years since the acquisition, becoming synonymous with high-end ice cream in China. At the same time, in Chinese mainland, the "Wan Chai Terminal" accounts for 50% of the frozen food market share in the South China market, and the proportion has reached 20% in Beijing.
During the epidemic, the performance of Wan Chai Terminal was even more remarkable, this brand with a strong Chinese flavor successfully hid its foreign investment identity, thus making China its second largest market in the world after the United States, and enjoying the dividends of the development of the Chinese market.
But General Mills is not resting on its laurels in China, from its heyday as 557 Häagen-Dazs to its marginalization. Häagen-Dazs, which costs 38 yuan a ball, was punished for replacing natural chocolate with cocoa butter. In the context of the strong rise of domestic products, when people are gradually leaving Häagen-Dazs, General Mills should re-examine itself. List of high-quality authors