General Mills Transforms Its Convenience & Foodservice Division
MINNEAPOLIS -- Over the past five years, General Mills has transformed its lesser-known $2-billion Convenience & Foodservice division, bringing more innovative new products to key growth channels such as convenience stores, schools, hotels, hospitals, restaurants and bakeries throughout the United States, according to the company's new case study on the division. Recently, General Mills further committed to the shift in focus by changing the division's name from Bakeries & Foodservice to its current title.
"Seven of the 10 fastest-growing categories in convenience stores are food and beverage categories," said David Wilson, marketing manager for General Mills Convenience. "As our division's recent name change suggests, we're placing a greater focus on our convenience store business. Food products and snack foods, in particular, are becoming an increasingly important contributor to channel sales and profit, and we want to grow and innovate quickly to deliver remarkable products to the increasing number of consumers who purchase snacks at a convenience store."
One of General Mills' key strategies is leveraging external partnerships through open innovation, according to the company. Since it formally adopted the General Mills Worldwide Innovation Network (G-WIN) open innovation strategy, it has connected with multiple outside partner companies to help introduce some of its most successful new products, such as Fiber One 90-Calorie Brownies and Nature Valley Protein Bars.
"Leveraging external partnerships to help us innovate effectively and efficiently is an inherent part of what makes us successful in the c-store channel," said Lynn Choi Perrin, a senior scientist for General Mills. "Due to the unique business model and product distribution for the c-store channel, new product launches start relatively small in comparison to a traditional U.S. retail launch, and then grow year over year. This exponential approach to new product launches is why our division relies heavily on our external partners who are willing to scale with us over time."
Nearly 100 percent of all General Mills' new product innovation specifically for the c-store channel is facilitated with the help of outside partners, Perrin said. Chex Chips and Nature Valley Nut Clusters, both launching this month, were fueled by open innovation. An outside partner company helped source ingredients for Chex Chips, and they are produced by a co-manufacturer with more flexibility of scale than General Mills' production facilities. The format and recipe of Nature Valley Nut Clusters were developed in partnership with a co-manufacturer that possessed the specific expertise to bring the product more quickly to market.
"It's critically important that we form win-win, creative partnerships to help us grow in this channel, and allow our partner companies to grow, too," Perrin said. "Our collaborations go far beyond, 'Can we run our product on your line?' Instead, we look for true innovators who are willing to partner with us beyond production to build our brands and mutually benefit our businesses."
General Mills Convenience also connects with external partners via touchpoints such as trade shows, supplier referrals and the G-WIN online portal. It also looks to existing partnerships for assistance with new projects.
More information on G-WIN is available at www.generalmills.com/win.