General Mills Introduces More New Products Faster

In an earnings conference call with shareholders and analysts last fall, General Mills CEO Ken Powell declared that his company would introduce 300 new products by the end of fiscal 2009, which ends in May.

What would these products look like? Consider Fizzix.

Introduced in the fall of 2007, Fizzix is something you probably never thought the world was breathlessly waiting for: carbonated yogurt. But General Mills needed something like it. A few years back, the company saw that its Yoplait yogurt brand wasn’t selling well among teenagers. It knew from its extensive market research that it needed to make yogurt more “fun.”

But how? The answer came not from the company’s own labs but from Brigham Young University. There, food scientists had developed a way to carbonate thick liquids—like yogurt. General Mills got wind of the technology, visited BYU, and soon had a licensing agreement. Voilà! Fizzix, a fizzy yogurt in a squeeze pack.

Many of the new products that General Mills and its competitors introduce are line extensions, like the seemingly innumerable species of Cheerios in the cereal aisle. Others, like Fizzix, are completely “new,” though even those are connected in many cases to what Powell has called General Mills’ “power brands,” which include Yoplait and Progresso. However they are derived, new products such as Progresso Light soups and Fiber One bars fueled much of General Mills’ revenue growth in 2008. For the year ended May 25, 2008, net sales grew 10 percent, to $13.7 billion. The lower-calorie soup line, introduced in mid-2007, notched more than $100 million in retail sales in its first year.

But just as remarkable is how quickly the company is getting new products to market. Like other large food companies, General Mills used to introduce new products at a slower pace. In the current supermarket world, that’s no longer an option.

What’s New?

Peter Erickson, senior vice president of innovation, technology, and quality, who reports directly to Powell, prefers that the number 300 not get too much attention.

“While we absolutely and in point of fact introduce a lot of new products, our focus in recent years has been less around the quantity of our innovations and more around the quality of our innovation,” Erickson asserts. “In the last several years, we’ve really moved away from counting the number of things that we’re introducing because we don’t think that that’s a real indication of our innovation success.”

Though not meant to be a precise count, “300” does reflect how many more consumer food brands General Mills has after its acquisition of Pillsbury in 2001. It’s also evidence of a new philosophy of product development that General Mills put in place about five years ago.