General Mills is one of those storied, solid members of the food and beverage industry, long admired for its vision, steady financial performance and contributions to both the industry and the communities in which it works. 2016 was a particularly special year for the company: It celebrated its 150th anniversary and appointed a new president, probably heir-apparent to the chairman and CEO roles.
It's also a company facing the same cataclysmic changes confronting nearly all Big Food companies: inefficient, aging factories, legacy brands and product lines that are being snubbed by millennials, transparency and the general consumer distrust that goes with being a $17 billion company. But General Mills is answering those challenges in intelligent and innovative ways, ways that may ensure it's around for another 150 years.
General Mills long has been a leader in new product development and manufacturing excellence. Its corporate responsibility reports are full of awards for sustainability, charitable works and workplace equality and diversity. It's made the nutritional improvement of all of its products a cornerstone. For those reasons and many more, we name General Mills our 2016 Processor of the Year
History: Flour mills to submarines
General Mills started life in 1866 along the banks of the Mississippi River in Minneapolis. Cadwallader Washburn started a flour mill there, which eventually grew into Washburn Crosby Co. Although massive for its time, it found an untapped market for milled flour … which prompted Charles Pillsbury to build his own mill on the opposite river bank in 1869.
Both companies prospered and remained separate firms until 2001.
On June 20, 1928, Washburn Crosby Co. adopted the name General Mills, with the goal of "reshaping the milling industry," according to company history. Five months later the company's stock began trading on the New York Stock Exchange.
Gold Medal flour was the first surviving brand, debuting in 1880 (and today remains the top-selling flour in the U.S.). Bisquick and then Kix cereal were introduced during the Depression. Kix was the result of a General Mills innovation — a research department. In addition to the puffing gun, which delivered a puffed cereal, rather than flakes, the department created an affordable process for producing vitamin D. Cheerioats, later renamed Cheerios, emerged from the lab in 1941.
General Mills' highly regarded engineering department turned its efforts to wartime machinery during World War II and is credited with many innovations that helped win the war. In the 1960s, Big G's Aeronautical Research Labs developed a deep-diving submarine.
While General Mills spent the post-war years diversifying but staying domestic, Pillsbury was expanding internationally with acquisitions from Ghana to Venezuela. It also bought a small restaurant chain called Burger King and took it national. In 1989, Pillsbury was bought by the British firm Grand Metropolitan Plc, which eventually renamed itself Diageo – and eventually ended all Pillsbury manufacturing in favor of contract processors.
Diageo grew more interested in alcoholic spirits than food, so in late 2000, the British firm agreed to sell Pillsbury to General Mills, with the deal being completed a year later.
At $10.5 billion, it was the biggest deal in General Mills' history, bringing along such brands as Green Giant, Old El Paso, Totino's and of course the Pillsbury frozen dough products – but not the dry baking mixes, which were sold to another Minnesota company, International Multifoods (which was later acquired by J.M. Smucker) to satisfy antitrust concerns.
General Mills, more than most companies at the top of the U.S. food and beverage industry, has grown organically. But there has been a number of acquisitions through the years, many of them bolt-ons but some transformative.
Haagen-Dazs, one of the founders of the super-premium ice cream category, came along with the Pillsbury acquisition. Pillsbury had contracted-out manufacturing of the ice cream to Nestle's U.S. ice cream subsidiary, Dreyer's, and the Swiss company retained the rights for the U.S. only. General Mills owns the brand and markets it elsewhere in the world.
Yoplait was started in 1964, when French farmers joined together to sell their products, primarily yogurt, nationally. The names of the two lead co-ops were Yola and Coplait, hence the name. Yogurt was just catching on in the U.S., so General Mills first licensed the brand from the French dairy cooperatives and in 2011 bought a controlling 51 percent interest in the brand's main operating company, Sodiaal.