NEW YORK — General Mills Inc.’s management team set a goal of achieving $1 billion in e-commerce sales by fiscal year 2021. During the company’s investor day presentation on July 11, Jeffrey L. Harmening, chairman and chief executive officer, said he was “highly confident” the company would reach it by fiscal 2020.
“We grew our e-commerce sales by 50 percent globally last year, almost 70 percent here in the US,” Harmening said. “But as important as those numbers are, because you can get lost in the law of big numbers, we over-index online to what we do in bricks-and-mortar. And that's true in the UK. It's true in France. It's true in China. It's true in Korea, and it is true in the United States.
“And, so, yes, we're going to sell a lot through e-commerce, but, importantly, our shares over-indexed online where they do it in brick-and-mortar. And so as we hear about e-commerce, and frankly, a lot of doom and gloom about what's going to happen to food companies when things go online, we see a lot of growth in our business, and we like the growth that we see, and we see that continuing in the next fiscal year.”
Adding to the company’s future sales performance in e-commerce is the acquisition of pet food maker Blue Buffalo Pet Products, Inc.
“It's hard to believe, but just a few years ago … our e-commerce business was roughly about 4 percent of sales,” said William W. Bishop, president of the business unit. “…Today, it's 25 percent of our business and still growing. We have a strong brand with high velocities across all of our e-commerce platforms. And, really, it's our go-to-market model that drives pet parent awareness and interest in Blue Buffalo and really feeds our growth.”
Christina Law, group president of Asia and Latin America for General Mills, said e-commerce food solutions are more highly developed in Asia than they are in the US.
“For example, nearly 20 percent of grocery sales in South Korea are for the e-commerce platform,” she said. “In China, e-commerce accounts for roughly 6 percent of total grocery sales, where the dominant model is home delivery, leveraging mobile technology.”
She added that General Mills recently signed a joint business plan with the Alibaba group, the largest e-commerce platform in China, to capitalize on advanced data solutions for consumer insight. It is hoped the agreement will lead to marketing and sales innovation for the company.