General Mills opens technical center in China
July 15, 2014
by Eric Schroeder
MINNEAPOLIS — General Mills, Inc. on July 15 inaugurated the company’s first innovation, technology and quality center in China, signaling the company’s commitment to drive greater innovation and investment in one of its largest growth markets.
The 75,000-square-foot, $15 million facility is General Mills’ first major technical center outside of its worldwide headquarters in Minneapolis. The complex will focus on developing products for Chinese consumers, including snacks, convenient meals, yogurt and super-premium ice cream. Inside it will house centers for product research and development, food safety, food nutrition research, and food sensory evaluation.
“Our new technical center in Shanghai provides General Mills a tremendous opportunity to accelerate innovation in the Greater China region and better support this rapidly expanding business,” said Ken Powell, chairman and chief executive officer. “By bringing our world-class capabilities to the region, we will increase our agility to act on emerging consumer trends, enable bigger and better innovation pipelines, and establish a food safety center of excellence for our business.”
General Mills also operates technical centers in Minneapolis, France, India and Brazil. In addition, the company’s Cereal Partners Worldwide joint venture with Nestle has a research center in Switzerland.
Mr. Powell was joined at the inauguration event by Peter Erickson, executive vice-president and president of innovation, technology and quality; Gary Chu, senior vice-president and president of General Mills China; Edward Lee, vice-president of supply chain and innovation, technology and quality; and local government officials.
“Our continued success in China will require consistently meeting the needs and demands of our consumers,” Mr. Chu said. “Over the last two decades, we have built a growing portfolio of brands and products that Chinese consumers have come to love and trust. With the tremendous economic growth in China, establishing greater technical capabilities in this market is critical for our continued success.”
Today, China is one of the company’s largest growth markets with brands such as Wanchai Ferry dim sum, Häagen-Dazs ice cream and Bugles and Trix snacks. Chris O’Leary, executive vice-president and chief operating officer of international at General Mills, told analysts participating in a July 8 investor day conference call at the New York Stock Exchange that the company has high hopes for growing in China.
Constant-current net sales for China have grown at a 15% compound rate over the past four years, reaching over $700 million in 2014, he said, and the company expects double-digit net sales growth from Greater China this fiscal year.
Last week, the company announced that it will expand its geographic presence for Häagen-Dazs, adding 80 new shops and entering 16 new cities in China. The company also is preparing to enter the $8 billion yogurt category and has begun construction on a new manufacturing facility in the region.