Picking up the pace in product development

by Eric Schroeder
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Partnerships between manufacturers and retailers — like that of General Mills and Kroger — are vital for new product launches.
 
NEW YORK — When it comes to bringing new products to market, partnerships between manufacturers and retailers are vital.

The process starts earlier than any consumer activity starts, Donald Mulligan, executive vice-president and CFO of General Mills, Inc., Minneapolis, said during a May 19 panel presentation at the BMO Capital Markets Farm to Market Conference in New York.

Donald Mulligan, executive vice president and CFO of General Mills. 

“All of our retail partners have increased their ability to analyze data, to do shopper marketing to understand their consumers,” Mulligan said. “We understand our consumers from a category standpoint. They understand their shoppers from an occasion standpoint, and marrying the two really develops differential insights. So we can start those discussions a year in advance of us ever launching a product because it’s an input into how we think about where we can take it. And then it gets to the point where after we do testing — and our testing has changed significantly — we’ve always done market tests but we’re doing much more small-scale iterations, failing as fast as we can to learn as much as we can.”

Mulligan said General Mills has learned from small entrepreneurs in the food and beverage space who take small risks, learn quickly and pivot and move. While large companies haven’t traditionally exhibited this skill, he said it’s now a “muscle” that General Mills has developed so that its teams “are thinking small.”

“We talked about being faster first dollar,” he explained. “We want to iterate as much as we can with the consumer, have them actually part with the dollars to see if we have a marketable proposition and then scale it, very much like the emerging brands do.

“Obviously, that iteration involves partnerships with our retail partners to get it out in front of consumers. And then it’s a matter of what the idea is and how you actually launch it. But there’s typically going to be a merchandising program, an advertising program that we do in concert with our retail partners to make sure that it gets the trial, the visibility that we want out of a new idea. And we work very closely again across the supply chain, but particularly in this case with our retail partners to make sure that the visibility in the trial and the recognition from the consumer is there. That is both from an advertising standpoint, whether it’s on TV or digital, and certainly very much from an in-store standpoint. That’s where the partnership is probably the deepest.”

Mike Schlotman, executive vice president and CFO of Kroger 

Mike Schlotman, executive vice-president and CFO of The Kroger Co., Cincinnati, added that partnerships as they pertain to manufacturer and retailer are “vital.” He said Kroger tries to pride itself on being a retailer that can help suppliers understand the process.

“We call it ‘go slow to go fast’ because it can feel like you’re going slow when you’re reiterating something in a relatively small market and the team just wants the darn thing launched,” Schlotman said. “But when you do those iterations you’re taking your time so that when you do launch it you can go fast because you’ve got it right. And we do that in multiple different ways at Kroger across the board, including product launches.

“We had our Taste of Italy and sourced eight or nine different unique products direct from the manufacturers literally all across Italy. And each container of the product explains a little story about that product and where it came from in Italy and the family that makes the product. Our own team did that by traveling to Italy multiple times, so there’s lots of ways to go about innovation and introducing new products.”  

 

 

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