Committed to innovation for sustaining growth, Reinemund says, “We take our competitive strengths, and invest in them to create longer-term value. Investing in innovation fuels the building of our brands; this in turn drives top-line growth. Dollars from that top-line growth are strategically reinvested back into new products and other innovation, along with cost savings projects, and thus the cycle continues.”
Championing whole grains and diversity
Last October, Stephen Sanger again was at the helm of one of the biggest announcements in the food industry. General Mills said it would reformulate all of its Big G cereals to be made from whole grains, a tremendous monetary and marketing commitment. “This improvement by General Mills could signal the most comprehensive improvement in the nation’s food supply since the government began mandatory fortification of grains in the 1940s,” said former FDA Commissioner David Kessler.
Four years earlier, Sanger was announcing the largest acquisition in food industry history: the $10.1 billion acquisition of Pillsbury from Diageo Plc in 2001. Combining strengths from each entity, reducing debt, maintaining the integrity of brands from both companies and establishing a unified corporate culture was no easy challenge. But insiders say Sanger has achieved his goal of a more relaxed and congenial company atmosphere, fortified by promotions from within. That might explain why General Mills consistently receives kudos as a great place to work, including the championing of Latinas, working mothers, women of color and executive women.
Sanger became chairman/CEO of Minneapolis-based General Mills in mid-1995, and this marketing-savvy leader has added a shopping list of credits to General Mills’ resume. Former president of both the Big G cereal division and Yoplait USA, Sanger certainly can take pride in accolades for General Mills, which garnered Fortune’s 100 Best Companies to Work For and Most Admired Companies awards.
But in the realm of products, Sanger’s focus appears to be on health. Yoplait became the yogurt market leader, surpassing Dannon. Its latest offering is Yoplait Healthy Heart, the first heart healthy yogurt with plant sterols, clinically proven to significantly reduce cholesterol. Plant sterols also will be popping up in Nature Valley Healthy Heart Granola Bars. General Mills has loaned the Wheaties and Total brands to lines of nutritional supplement products made by Leiner Health Products. And after the USDA revealed its new Food Guide Pyramid(s) last month, General Mills was the first major company to jump on board, announcing it would put MyPyramid on all its Big G cereals, meaning more than 100 million boxes would spread the new nutrition message.
It’s no surprise that General Mills was honored by retailers as Manufacturer of the Year for a commitment to understanding its shoppers, trends and demographics, and translating those insights into innovative and actionable merchandising strategies that generate profitable volume growth for retailers.
Your best and worst customer
Wal-Mart is the “business template” for the modern economy, according to historian Nelson Lichtenstein, a professor at the University of California at Santa Barbara. “In each historical epoch, a prototypical enterprise seems to embody a new and innovative set of economic structures and social relationships,” he says.
|H. Lee Scott Jr.,
Wal-Mart Stores Inc.
Since 2000, H. Lee Scott Jr. has led Bentonville, Ark.-based Wal-Mart, the nation’s largest company (sales of $288 billion) and (by many but not all surveys) most admired retailer. It has more than 1.3 million associates (at Wal-Mart, all employees are called associates) and nearly 5,000 stores and wholesale clubs in 10 countries.
2005 is becoming the year of radio frequency identification (RFID), largely because Wal-Mart wants it so. While most manufacturers grudgingly admit the technology is the wave of the future, nobody wanted to go first. But Wal-Mart gave a stiff Jan. 1 deadline to its 100 largest suppliers, many of them food companies, to put RFID tags on cases and pallets. Nobody was willing to forgo Wal-Mart’s business.
“Wal-Mart combined myriad technological resources to change the entire paradigm of American business in the past 25 years,” according to Motley Fool. Its relentless pursuit of efficiency through technology – from controlling the flow of information among manufacturers, distributors and retailers and adopting UPC technology in the 1980s leading to a database that tracks every item it sells -- changed the face of retail shopping. “It created the model of the dominating retailer and changed the industry dynamic from one in which manufacturers pushed product downstream to retailers, to one in which the retailer pulls product from manufacturers and distributors only when needed.”
Scott is very much behind these efforts. He spent most of his 25-year career with the retailer in logistics and transportation, so it’s no wonder that he always looks for more efficient ways of doing business. He’s betting on RFID technology to reduce out-of-stocks, labor costs and inventory and to improve product traceability, an advantage in the case of a recall. The technology also improves Wal-Mart’s data on which products sell and which don’t, invaluable information when deciding which products to purchase from its suppliers.