USA – General mills has raised its full-year guidance for 2023 based on continued strong in-market performance driven by a technology-centric connected commerce strategy.
The American multinational manufacturer and marketer of branded processed consumer foods now forecast an organic net sales growth of about 10% from 8-9%.
General Mills also said it expects adjusted earnings per share growth of 7% to 8% in constant currency, after 2022’s adjusted EPS of US$3.94. Analysts are looking for an adjusted EPS of $4.14 in 2023.
Speaking to the Consumer Analyst Group in New York, Jeff Harmening, the CEO of General Mills said that “The world around us is changing as technology has an increasing impact on consumer behavior and the operating environment.”
He acknowledged that exceptional branding, innovation, and execution have contributed to growth over the past three years and will remain decisive for its success in the future.
According to Hermening, in the quest to seize the opportunities presented by this changing environment, the company has built new capabilities that will give significant competitive advantages in the future critical to continued growth.
Connected commerce is helping to triple online retail sales in the US
“Connected commerce,” an investment technology that greatly leverages data and insights to meet consumers in the physical and digital worlds is showing positive results according to Harmening.
“We have invested in skills and measurement tools to ensure our leadership position on the physical shelf translates into an even stronger position on the digital shelf,” he explained
According to Harmening, the optimized digital tool has significantly improved the organic visibility of brands online, helping the fruit snacks business’ e-commerce retail sales grow 51% in fiscal ’23 to date.
In addition, General Mills’ e-commerce share of its U.S. retail business has tripled to more than 10% over the past three years, and the company’s e-commerce market share continues to exceed its brick-and-mortar share.
Harmening further revealed that e-commerce growth has partly been fueled by creating ‘one-on-one’ relationships across both digital and physical platforms.
This includes food recipe sites at Pillsbury.com and Bettycrocker.com, and the digital platform Box Tops for Education, where the company has 14 million monthly active users.
In addition, the company has partnered with the Good Rewards loyalty program on the Fetch mobile app which welcomed 2 million consumers and ingested 60 million rows of first-part data per day in just six months since its launch.
Strategic Revenue Management
Moreover, technology is positioning General mills to offset unprecedented cost inflation through strategic revenue management (SRM).
Harmening revealed that the company is using robust datasets and granular analysis aimed at varying SRM approaches at the category and even item level to address relative price points and cliffs while maintaining our overall competitiveness.
“This helped Nielsen measure the company’s elasticities 27% better, on average than key brand competitors in its top 10 categories in the US,” he said.
Additionally, digitalization is also critical in the supply chain in Increasing efficiency and resiliency, resulting in better service at a lower cost and, in many cases, a reduced carbon footprint.
“We have seen a 30% reduction in waste in initial testing and plan to expand this program across our manufacturing network,” he added.
He also called for the creation of an end-to-end logistics flow from suppliers through his networks to his customers’ networks.