General Mills swaps volume for value

Warc, 3 September 2014

LONDON: Food manufacturer General Mills has announced its intention to move away from chasing volume sales in leading European FMCG markets in order to focus on building its brands in the eyes of consumers.

"The heavy promotional environment in the UK, Ireland and Nordics has disrupted the business models of a lot of the major FMCG companies," according to Jennifer Jorgensen, marketing director of General Mills UK, Ireland and Nordics.

"It was probably easier to find profitable growth elsewhere in the past," she told Marketing Week, "but now we're circling back and realising those are key markets.

"Not only are they important in terms of volumes but they are also very much influencer markets – we look to consumers in the UK and Nordics for trends in food. We were missing it on both fronts by not really playing to win in these markets."

Three brands in particular are expected to benefit from the new approach including Old El Paso, Häagen-Dazs and Nature Valley.

The shift to brand marketing in Europe also ties in with the development of the company's thinking in the US, where it is pursuing the idea of purpose-driven branding.

Earlier this year, Mark Addicks, svp/cmo, told a conference how General Mills had sat its brand teams down with an academic to refine an approach to this area. "We asked our teams to say: what is the belief that your brand shares and cares about passionately, and then what does the brand exist to do," he explained.

It was, he admitted, not exactly revolutionary, "but it's put in a new format – and a very meaningful one," he said.

Further, even if only done in a basic way the exercise could still have beneficial consequences. "A good brand purpose will improve marketing," he declared.

Data sourced from Marketing Week; additional content by Warc staff