General Mills Incorporated

I wrote this paper for my “Principles of Management” class at Augsburg College. The assignment was to choose a company listed on “Fortune 100 best companies to work for” and General Mills came in at #72. I chose this company for it’s link to my agricultural background and it being a Minnesota company based in my city.

General Mills Incorporated, Golden Valley Minnesota

General 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.

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 food production facilities including locations in France, Venezuela, China and Australia.

General Mills has always been primarily focused on the production of food consumer products, and 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, its vast product line, and its geographical location.  Not only is it competitively positioned in local, national and recently international markets with high quality and low cost goods, it is involved in the production of over 45 distinctive brands. From pancakes to pizza, breakfast to dinner, there’s a high probability each meal consumed in a day consists of at least one if not several General Mills brands. General Mills geographical location amongst the rich, vast corn and soybean fields of Minnesota helps reduce production costs and provides quicker time to market. This gives it even greater advantage in large foreign markets where fertile farmland is scarce. Since 2010, profits have increased 17.5%, compared to their biggest competitors, PepsiCo (1.9% increase) and Kraft (14.3% decrease); clearly demonstrating these advantages are producing results.

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. Claiming the title of 3rd largest food producer in the United States it has an ethical responsibility to produce healthy and fairly priced food. Corporate sustainability does not just refer to customers, but also to employees and strategic business partners, and General Mills has a long history of acquisitions and mergers with competitors and major brand owners. If it is to continue to support its vast and global food producing infrastructure, of which there is a moral imperative to do so, a strong long term vision and plan is critical.

In October of 2012, General Mills controversially joined a large number of other food producers in opposing California’s proposition 37, which would require all food labels indicate the presence of genetically modified ingredients. In a statement published on their website (State-based labeling laws, 2012), “We believe labeling regulations should be set at the national level, not state by state” and, quoting the FDA, “FDA has said a labeling policy like this ‘would be inherently misleading’ “. They also quote the American Medical Association (State-based labeling laws, 2012) ”Even the American Medical Association recently concluded ‘there is no scientific justification for special labeling of bioengineered foods.’” General Mills has a wide range of certified organic products available 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 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 even 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. Certainly the higher costs to farmers from growing organic grain is a strong consideration in General Mills approach towards the issue.

The corporate culture at General Mills is clearly defined on its publically 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 its employees to strive for consistently superior performance. In April of 2012, Forbes magazine called General Mills “The Most Reputable Company in America”, raising the stakes to deliver on its outward corporate culture messaging as failing 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. (General Mills) 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. This indicates the greater food production industry suffers from unfavorable employee regard towards their employers, making General Mills ranking all the more respectable. PepsiCo and Kraft rank significantly higher on the Fortune 500 list, but the fact they are missing from the Fortune 100 Best Companies to Work for list indicates they are too big with too many employees to achieve a favorable corporate climate. Only two companies on the Fortune 100 Best Companies to Work for has as many U.S. employees.

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.” This indicates it is possible for a company to not make the list because of bad public relations, even though the employees are happy.

General Mills employees responded to the Fortune annual national survey by stating (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 as promoting internal employees rather than hiring reflects a determination to maintain the social structures in the business and local communities. Clearly, General Mills realizes hiring from within is preferable in terms of cost, because the experience and training of the current 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 their experience is specific to the company’s processes and policies than that of an outside firm.

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.

 

References

100 best companies to work for. (2012). Retrieved from CNN Money: http://money.cnn.com/magazines/fortune/best-companies/2012/snapshots/63.html

America’s Most Reputable Companies. (2012, April 4). Retrieved from Forbes: http://www.forbes.com/sites/jacquelynsmith/2012/04/04/americas-most-reputable-companies/

Best 100 Companies to Work for 2013 – Methodology – Fortune. (2013). Retrieved from CNN Money: http://money.cnn.com/magazines/fortune/best-companies/2013/faq/index.html

(2012, December 7). Form 10-Q. Washington, D.C.: Securities and Exchange Commission .

Fortune 500 2012 : Industry : Food Consumer Products. (2012). Retrieved from CNN Money: http://money.cnn.com/magazines/fortune/fortune500/2012/industries/198/

General Mills. (2013, February 15). Retrieved from Wikipedia: http://en.wikipedia.org/wiki/General_mills

One of the world’s largest food companies. (2013). Retrieved from General Mills: http://www.generalmills.com

State-based labeling laws. (2012, November 13). Retrieved from General Mills: http://www.generalmills.com/Home/Responsibility/Environment/packaging/state_based_labeling

Who’s Funding Prop 37, Labeling for Genetically Engineered Foods? (2012, October 24). Retrieved from KCET.org: http://www.kcet.org/news/ballotbrief/elections2012/propositions/prop-37-funding-genetically-engineered-food.html