General Mills Adds $15M “Innovation Center” In China
General Mills said Tuesday that it has added a $15 million “innovation center” in Shanghai, China as it plans further investment and growth in the country.
The Golden Valley-based company said the 75,000-square-foot facility will be its first “major” technical center outside of its headquarters, although it also operates smaller centers in France, India, and Brazil.
The center will be used to develop products for Chinese consumers such as snacks, convenient meals, yogurt, and premium ice cream. Employees will be involved in 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,” Chairman and CEO Ken Powell said in a statement. “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 said China is one of the company’s largest growth markets, specifically for its Wanchai Ferry dim sum, Haagen-Dazs ice cream, Bugles, and Trix brands.
“Constant-current net sales for China have grown at a 15 percent compound rate over the past four years, reaching over $700 million in 2014,” General Mills said. The company expects double-digit net sales growth from Greater China this fiscal year.
Last week, General Mills announced that it’s expanding its geographic presence in China for its Haagen-Dazs brand, adding 80 new shops and entering 16 new cities. The company is also preparing to enter the $8 billion yogurt market in China and has begun construction on a new manufacturing facility there.
According to General Mills, one-third of its sales are now outside of the United States, due largely to its acquisition of Yoki Alimentos, a Brazil-based packaged foods company that General Mills bought in 2012 for about $859 million, and Yoplait’s Canada operations. (General Mills acquired a majority stake in Yoplait in 2011; it then reached a licensing deal to begin marketing Yoplait in Canada in 2012.)
General Mills said that its international business is heavily focused on the middle class consumer as it expects the global middle class to reach 50 percent of the world’s population by 2030.
“These consumers are increasingly pressed for time,” Chris O’Leary, executive vice president and chief operating officer of General Mills’ international division, said in a statement. “As a result, this emerging middle class is looking for convenient food solutions, with strong health credentials and great taste. All of which points to a huge growth opportunity for our business going forward.”