General Mills is reorganizing its portfolio and organization with development in mind.
Minneapolis, Minnesota In order to better meet its new growth goals, General Mills, Inc. is reorganizing its organizational structure. The chairman and CEO of the company, Jeffrey L. Harmening, spoke virtually on May 20 at the BMO Capital Markets Farm to Market Conference about the recent changes to the leadership team.
Dana M. McNabb will take over as Chief Strategy and Growth Officer, a newly formed position. According to Mr. Harmening, she will be in charge of major growth capabilities and strategic projects. She now oversees the company’s Europe and Australia business.
In addition to his present responsibilities, Sean Walker, the company’s current leader of the Asia and Latin America division, will take on the role of leader of both segments moving forward.
Former supply chain officer John R. Church will take on the position of chief transformation and enterprise services officer. In this capacity, he will oversee the company’s worldwide shared services function and spearhead enterprise transformation projects.
Paul Gallagher, who is now in charge of General Mills’ supply chain in North America, will become the chief supply chain officer and join the executive group.
“We are currently going through the exercise of redesigning our structure through the rest of the organization,” Mr. Harmening stated, “with those changes already announced.” To be clear, this is more than just a way to save costs. This effort aims to reallocate resources from underutilized sectors of our business to areas with greater growth potential, including digital and data and technology, e-commerce, strategic revenue management, and other areas vital to our long-term success.
The company’s Accelerate plan, which it introduced to the investing community in February at the Consumer Analyst Group of New York virtual conference, is what the organizational changes are a part of. The Accelerate approach was introduced more than a year ago. According to Mr. Harmening, the company’s five worldwide platforms—cereal, pet food, ice cream, snack bars, and Mexican cuisine—have seen increases in market share year-to-date as a result of early initiatives.
“The decisions we’re making to drive profitable growth and superior shareholder returns, such as long-term objectives of consistently producing 2% to 3% organic net sales growth, mid- to high-single-digit operating profit growth, and mid- to high-single-digit EPS growth, are really what accelerate is really all about,” Mr. Harmening stated. We’ve teamed up on projects to get an advantage over competitors as part of this plan. These include becoming a force for good, daringly creating our brands, inventing nonstop, and expanding our reach.
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The strategic focus of General Mills on reorganizing its portfolio to increase growth is seen in recent purchases. According to Mr. Harmening, the company announced in March that it had signed a memorandum of understanding to sell French dairy cooperative Sodiaal its interest in its European Yoplait operations. In May, the company announced that it had acquired Tyson Foods’ pet treat business, which is anticipated to bolster General Mills’ position in the rapidly expanding US pet food market.
He declared, “We’re taking major steps toward reshaping our portfolio for faster and more profitable growth with these two transactions.” “However, we believe that more work needs to be done to reach our desired growth exposure, and we’re still committed to further portfolio shaping through divestitures and/or acquisitions to raise our growth profile even higher.”
Additionally, Mr. Harmening discussed General Mills’ strategies for addressing the substantial inflationary pressure that he anticipated would impact a sizable portion of the company’s portfolio in the upcoming year.
“Our productivity is our first line of defense, and General Mills leads the CPG industry in productivity savings, which have averaged roughly 4% annually over the past ten years,” Mr. Harmening stated. “It’s not the leader, but certainly one of the new leaders.” That’s the first line of defense for protecting margins, then. Pricing comes in second. I began by discussing our skills, which have grown over the last many years, including a strategic revenue management capacity that will be extremely useful in the upcoming year. Although it’s always beneficial, it will be more crucial as we consider the upcoming year.