MINNEAPOLIS — Calling on-line sales of food and beverage products the “fastest growing food-channel,” General Mills, Inc., has created an e-commerce center of excellence to provide leadership on the virtual shelf, said Shawn O’Grady, president of sales and channel development. Company sales currently flowing through on-line sales are between 1% and 2% of total sales, but Mr. O’Grady said that could change quickly.
|Shawn O’Grady, president of sales and channel development at General Mills|
“If you said, what does it look like out four or five years ahead, all the projections I’ve seen are in the 5% to 6% range,” Mr. O’Grady said Sept. 22 during a conference call with financial analysts to discuss the company’s first-quarter earnings. “Obviously, Amazon is leading some of the thought there. Walmart.com is investing a great deal to make sure that they are utilizing their stores to make sure they’re competitive. And that really is causing all of the players in the marketplace to want to be active in the e-commerce space.”
He said General Mills’ product portfolio is well suited for on-line shopping. Products like Larabar and some of the company’s gluten-free items do well on web sites that are geared for “spear fishing” or single item searches, and such mainstream product lines as Cheerios, Betty Crocker and others do well on web sites that cater to consumers looking to do their full basket shop on-line.
Ken Powell, chief executive officer of General Mills, said given the current situation in the market, it is easy to see e-commerce sales grow rapidly for the company.
“We have only to look at other markets where we do business, like the U.K. and France, where some of our categories, our on-line sales are approaching 10%,” Mr. Powell said. “So it’s pretty clear that we’re going to move in that direction very rapidly in the U.S. And this is an area that we’re investing in at General Mills to develop our capability, and make sure that we can be leaders and great partners for all of our customers who have a lot of interest in this.”
Don Mulligan, chief financial officer, said the catalyst that drove increased e-commerce sales in Europe was the ability for consumers to do a full basket on-line searches and shopping.
“You can see that coming,” Mr. Mulligan said. “And so that’s why we expect the growth projections to materialize.”