General Mills Incorporated, Minneapolis Minnesota

Editors note: This is a paper I wrote for a business class at Augsburg College. The assignment was to choose a company listed within Fortune magazines “Top 100 best places to work for in 2015”, provide an overview of the company and why you would choose to work there.

General_Mills-512x384General Mills Incorporated is a Fortune 500 corporation headquartered in Golden Valley, Minnesota. General Mills was formed in 1928 under the direction of Washburn-Crosby President, James Ford Bell, merging 26 other flour mills. In 2001, General Mills merged with its arch rival, Pillsbury, one of the original flour milling companies from the 1860’s and 70’s.

General Mills has introduced numerous food product brands, including Betty Crocker®, Wheaties®, Hamburger Helper® and Cheerios®. In 2012, General Mills completed nearly $17 billion in net sales with 25% coming from international markets.

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General Mills HQ – Golden Valley MN

According to a Securities Exchange Commission 10-Q filing in December of 2012, total liabilities and equity equaled $22 billion with $4.5 billion in current assets, and $14 billion in total liabilities. Globally, General Mills operates 79 facilities including locations in France, Venezuela, China and Australia.

General Mills has always been primarily focused on the production of food consumer products, and also on investing in consumer brands to build market share and brand awareness. For example, in 1965, the company purchased Rainbow Crafts, the manufacturer of Play-Doh®, significantly reducing its production costs while increasing revenue. They sponsored several children’s cartoon and radio programs including The Lone Ranger in 1941, and Rocky and His Friends in 1959, later using these characters in General Mills advertisements. In doing so, they would increase their overall brand recognition and market share to be more inclusive of their target demographic of families and young children.

General Mills has a significant competitive edge in its marketing and branding reach and its vast product line, in addition to its geographical location. Not only are they competitively positioned in local, national and recently international markets with high quality and low cost goods, they are involved in the production of over 45 distinctive brands. From pancakes to pizza, breakfast to dinner, there’s a high probability that each meal consumed in a day consists of at least one if not several General Mills brands. General Mills location amongst the rich, vast corn and soybean fields of Minnesota helps to reduce production costs and provides quicker time to market. This gives them even greater advantage in large foreign market opportunities located in geographical areas where fertile farmland is scarce. Since 2010, profits have increased 17.5%, compared to that of their biggest competitors, PepsiCo (1.9% increase) and Kraft (14.3% decrease) it’s clear their competitive advantages are moving them forward.

General Mills corporate mission statement, “Our mission is to make lives healthier, easier and richer. General Mills is Nourishing Lives.” focuses on sustainability and corporate responsibility. This is due in part to its social and ethical responsibility as it is the 3rd largest food producer in the United States located amongst some of the most fertile agricultural land on the planet, but it’s also an effort to accomplish greater long term efficiency in production. Corporate sustainability does not just refer to customers, but also to employees and strategic business partners. General Mills has a long history of acquisitions and mergers with competitors and major brand owners, and if it is to continue to support its vast and global infrastructure, a strong long term vision and plan is fundamental.

Speaking of social and ethical responsibility, General Mills joined a large number of other food producers in opposing California’s proposition 37(introduced in Oct 2012), which would require all food labels indicate the presence of genetically modified ingredients. However, General Mills has several organic, GMO free products available for consumers and has added Gluten free products to its offering as well. This indicates a willingness to change to meet demand and improve the general health of consumers, however small and incremental that change may be. General Mills is in the enviable position of being between food grower and consumer, and what General Mills believes they can sell to consumers they will demand from farmers. However, because General Mills is such a tour de force in the marketing of food consumer products, they could do more in convincing their customers to oppose genetically modified foods and offer more organic products. It’s a difficult position indeed, where cost and value have to be navigated with care so as to not make food too expensive yet healthy.

The Fortune 500 annual ranking of America’s largest corporations grouped by industry lists General Mills as the 3rd largest food producer along with a Fortune 500 ranking of 181. Their competitors, (#1 is PepsiCo, #2 is Kraft Foods, #4 is Kellog and #5 is Dean Foods) are not found on the Fortune 100 Best Companies to Work for list at all. This indicates the greater food production industry as a whole suffers from unfavorable employee regard for their employers, making General Mills ranking all the more respectable. PepsiCo and Kraft rank significantly higher on the Fortune 500 list, but this indicates that perhaps they are too big with too many employees to achieve a favorable corporate climate.

The corporate culture at General Mills is clearly defined on their publicly available website. “We do the right thing, all the time. We innovate in every aspect of our business. We build our great brands. We respect, develop and invest in our people. We strive for consistently superior performance.” The corporate messaging speaks to both employee and consumer in that it specifically mentions investing in their employees to strive for consistently superior performance. While it may be easy to generate such messaging, it’s not so easy to pronounce it on your website but then not actually deliver on such promises. Considering that in April of 2012, Forbes magazine ranked General Mills at #1 as “The Most Reputable Company in America” failing to deliver on their outward corporate culture messaging would result disastrous public relations ramifications. According to (America’s Most Reputable Companies, 2012), “General Mills blew everyone else out of the water this year. The global food giant’s pulse score totaled 83.03, which was 5.60 points higher than last year and 2.98 points higher than Kraft Foods, the second most reputable company… thrives on great citizenship, leadership, governance and products, is perceived as being a good corporate citizen by improving the health of their cereals”.

The Fortune 500 annual ranking of America’s largest corporations grouped by industry lists General Mills as the 3rd largest food producer along with a Fortune 500 ranking of 181. Their competitors, (#1 is PepsiCo, #2 is Kraft Foods, #4 is Kellog and #5 is Dean Foods) are not found on the Fortune 100 Best Companies to Work for list at all. This indicates the greater food production industry as a whole suffers from unfavorable employee regard for their employers, making General Mills ranking all the more significant. PepsiCo and Kraft rank significantly higher on the Fortune 500 list, but this indicates that perhaps they are too big with too many employees to achieve a favorable corporate climate.

With 16,939 employees and a 1% increase in job growth since 2011, General Mills was number 63 on the Fortune “100 Best Companies To Work For In 2012” list. Fortune partners with the Great Place to Work Institute to conduct the survey, and over 227,000 respondents are included in the February 2012 report. Two-thirds of a company’s overall score is determined by the results of the Institutes “Trust Index” survey. According to (Best 100 Companies to Work for 2013 – Methodology – Fortune, 2013) the survey “asks questions related to their attitudes about management’s credibility, job satisfaction, and camaraderie.”

The remaining third of the calculated ranking according to (Best 100 Companies to Work for 2013 – Methodology – Fortune, 2013) “is based on responses to the institutes Culture Audit, which includes detailed questions about pay and benefit programs and a series of open ended questions about hiring practices, methods of internal communication, training, recognition programs, and diversity efforts”. It should be noted according to (Best 100 Companies to Work for 2013 – Methodology – Fortune, 2013) “if news about a company comes to light that may significantly damage employees’ faith in management, we may exclude it from the list.”

General Mills employees responded to the Fortune annual national survey by indicating (100 best companies to work for, 2012) “the company offers careers, not jobs” and “85% of its officers were promoted from within, and started in entry level positions”. This indicates an adaptive approach to social sustainability because promoting internal employees rather than hiring new ones reflects a determination to maintain the social structures in the business and local communities. Clearly, General Mills realizes that hiring from within is preferable in terms of cost, because the experience and training of that employee has already been paid for. This experienced employee is not only gracious and thankful for the promotion and therefore potentially a more productive employee, but the experience is specific to the company’s processes and policies and not from an outside firm.

In analyzing the results of the survey and subsequent ranking, it is helpful to examine companies with similar numbers of employees yet achieved a higher ranking, and also considering companies headquartered in Minnesota. This helps give meaning to the ranking and provides deeper insight into the data itself. General Mills is 62 positions behind the number one ranked company, Google. Compared to Google, General Mills has 1561 fewer employees and generates approximately $13 billion less in revenue. Google also has 10,000 employees outside the U.S. compared to General Mills’ 18,223. Google added 7,020 new jobs in 2011, compared to General Mills’ 151. Reviewing Google’s ranking details reveals that employees feel a greater sense of mission, and enjoy the company culture and perks. The difference in survey results and company ranking is likely due to Google employees pride from working for a globally prestigious company with instant, world-wide name recognition.

All things being equal, I would personally enjoy working for General Mills. I understand their message, they have generally been a respectable company without scandal, and even with all the power they wield over my local community, country, and globally, they continue to grow in a socially and ethically responsible manner while maintaining a reliable and consistent corporate sustainability plan.