General Mills Crowdsourcing – Will they pull it off?
General Mills – One of the largest branded food manufacturers in the USA is turning to crowdsourcing for everything from new products, packaging to process improvements. Are they trying to do too much? Will emerging food entrepreneurs partner with them instead of venture capital? Is there a risk they might give away sensitive competitive information? What is keeping competitors (Unilever, Kraft and others) from copying them?
General Mills is one of the world’s largest manufacturers and marketers of branded consumer foods. It operates in the breakfast cereals, baking goods, grain snacks, meal products and organic foods segments. It’s well known brands include Betty Crocker, Yoplait, Colombo, Totino’s, Pillsbury, Green Giant, Old El Paso, Häagen-Dazs, Cheerios, Trix, Cocoa Puffs and Lucky Charms.
The company is leveraging crowdsourcing through 2 main platforms: the General Mills World-Wide Innovation Network (G-WIN) and the 301INC division.
General Mills World-Wide Innovation Network (G-WIN)
Through G-WIN, the company publishes and runs challenges to solve identified pain-points and also accepts pro-active innovative submissions from companies and individuals. The key target areas for innovation are:
- Products – Participants can suggest new products that fit within a General Mills brand or solve a customer need
- Ingredients – participants can suggest new ingredients to existing products to enhance taste, texture, quality or health benefits.
- Packaging – participants can propose novel packaging technologies or new, consumer-friendly formats
- Processing – primarily targeted at sector specialists and insiders (internal crowd) who are familiar with General Mills’s processes. Processing suggestions are supposed to improve overall quality, efficiency and profitability
- Technologies – Participants can invent new technologies that might support general mills businesses (this is mostly in response to published challenges)
- Sustainability – Suggestions that improve General Mills social impact or reduce its negative effects on society
301 INC is the new business development team at General Mills. The group’s mandate is to develop and launch new brands and businesses to enable next generation growth for General Mills. The group targets and partners with third party emerging food brands to accelerate their growth by nurturing the skills of the founders while providing them with access to capital and the breadth of capabilities such as manufacturing, distribution and marketing that have been perfected at General Mills. The ultimate goal is for these brands to be purchased by General Mills. A primary means of attracting these companies is by sponsoring the annual “Minnesota Cup” competition which is the largest statewide new venture competition in the nation
Crowdsourcing successes at General Mills
In 2011, Mark King submitted a proposal for a new technology to measure the texture of chewy granola bars. This was in response to a published General Mills challenge (the challenge was a request for “a quantitative method of analyzing the texture of a chewy granola bar to assess differences in bar texture”). General Mills accepted the proposal and worked with Mark to prototype, develop and install the technology. Mark was paid by General Mills for his technology (terms of the compensation were not disclosed)
There are also several successful General Mills’s products that were crowdsourced. These include but are not limited to Nature’s Valley Protein Bar and Refrigerated Pancake Batter
Challenges and risks
Potential cultural clashes: Can an innovation process driven by an internal R&D department co-exist with an innovation process driven by crowdsourcing? Will ideas sourced through crowdsourcing pass the resource allocation process? General Mills can potentially avoid any cultural conflicts by establishing a wholly owned but separate entity to run the crowdsourcing innovation process
Competition from venture capital and other large food manufacturers: Is General Mills’s technological / industry knowledge enough “competitive edge” against investment firms (P/E and venture capital?) Will entrepreneurs feel like they are limiting their exit opportunities or potential distribution channels and partnerships by partnering with General Mills early in their organizational lives? What is keeping Kraft and Unilever (and others) from executing on the same strategy?
Potentially giving away trade secrets: Can the company crowdsource all the areas it has identified in its G-Win strategy? Can processing innovations be crowdsourced without risking giving away competitively sensitive information? Is crowdsourcing better suited to improving processes than management consultants?
Student comments on General Mills Crowdsourcing – Will they pull it off?
This is a very interesting post. Given that General Mills is crowd-sourcing in so many ways, I’m only going to address using G-WIN to source suggestions for products/ingredients/packaging from consumers. On the one hand, this seems to make a lot of sense. Who knows the needs of your customers better than your customers themselves? On the other hand, I have to wonder who submits proposals to G-WIN and if their needs are really representative of the broader customer base. Is there a response bias in that those who submit proposals might be the most extreme users? Nonetheless, I do see value is soliciting proposals from customers, but I would be curious to know how General Mills then proceeds with those suggestions. What is the internal process to evaluate these suggestions, and how does the company gauge whether these new products/ingredients/packaging would resonate with a large portion of customers?
This is super interesting! As a consumer, I certain appreciate it when companies try to engage our opinions and solicit our advice. At the same time, I also wonder whether the main goal of crowdsourcing ideas is to actually generate financial returns vs. using it as a marketing tactic. It would be interesting to know the success/ROI of G-WIN initiatives. I also found is intriguing that while the idea of acquiring up-and-coming companies in the CPG world is not new, 301INC essentially formalized the process and in a way gave General Mills access to acquisition targets early on so that they are more likely to succeed; and in term, these companies will be more likely to agree to a deal with General Mills as opposed to its competitors.