General Mills

Date founded: June 20, 1928

Industry: Food Products

Corporate Headquarters: Minneapolis, Minnesota.

Type: Public

Overview

General Mills is a large food production company with roots stretching back to the 1860s. It began as a flour-milling company, an origin reflected in the company’s name. The company combined with other local businesses to incorporate as General Mills in 1928. General Mills continued to expand its product lines and survived the Great Depression through skillful advertising and product diversification. During World War II (1939-1945), General Mills engineers developed products for the United States military. At home, its factories manufactured goods that the nation needed during the time of war.

General Mills continued to diversify after the war. The company invested heavily in the toy market, buying the company that produced Play-Doh and the company behind the board game Monopoly. General Mills decided to leave the toy market in the 1980s and sold most of its holdings in those areas. In the early twenty-first century, General Mills purchased Pillsbury, a former competitor best known for its Betty Crocker brand and its line of easy to make baked goods.

History

The story of General Mills begins in 1866 when the Minneapolis Milling Company opened its first flour mill in St. Anthony Falls, Minnesota. The Minneapolis Milling Company was owned by entrepreneur Cadwallader Washburn. At the time, flour milling was considered a risky endeavor; some critics were concerned that the new mill would produce more flour than the public wanted, causing the price of flour to plummet. This was compounded by the fact that a local miller, C.A. Pillsbury, had already established a business in the market.

In 1877, the Minneapolis Milling Company partnered with entrepreneur John Crosby and changed its name to the Washburn Crosby Company. A year later, one of the company’s flour mills caught fire and exploded, killing eighteen people. In the aftermath of the disaster, Pillsbury and the Washburn Crosby Company created the Minneapolis Millers Association in an attempt to improve both safety standards and the quality of their flour. These advancements made Minneapolis one of the largest flour-producing regions in the United States.

In 1925, James Ford Bell, the president of the Washburn Crosby Company, was offered $40 million for a total purchase of the company. Though Bell initially agreed to the deal, he was later rebuked by the board that managed the company and the deal was canceled. In the wake of the canceled deal, the Washburn Crosby Company sought out the partnership of George F. Baker, a wealthy and powerful banker from New York City. Baker and the company worked together to restructure the milling industry, merging Washburn Crosby with several other local milling companies and creating General Mills on June 20, 1928.

Overview

The year after General Mills was formed, the stock market crashed, ushering in the Great Depression. Bell, who had previously managed flour mills in the United States during World War I (1914-1918), was prepared for the economic downturn. He added a research department that was dedicated to helping the company develop new products to diversify its product base. General Mills developed a process for puffing cereal, resulting in the development of Trix, the first non-flake cereal. The company also developed Bisquick, a premixed baking mix. During this time, General Mills also heavily utilized the emerging medium of radio as a form of advertisement and community engagement.

After the outbreak of World War II, General Mills was part of the mass mobilization of US industries to aid the war effort. The company’s mechanics and engineering department helped create a new type of torpedo, giving American vessels an advantage in naval combat. Its large manufacturing plants also helped create food products essential to US soldiers and Americans at home. General Mills also hired thousands of additional workers in order to increase the amount of goods it could produce for the war.

After the war, General Mills continued producing food and other household items. They became known for their large line of successful breakfast cereals, most notably Cheerios and Wheaties. However, General Mills did not abandon its engineering or mechanical divisions. These divisions continued working with the US government to develop other technologies. Among them were large plastic balloons that could lift heavy supplies into the air, and the weatherproof and impact-resistant data storage devices called “black boxes” utilized on airplanes.

In the 1960s, General Mills sought to expand into the toy market and acquired dozens of new companies. It purchased Rainbow Crafts, the company that created the famous Play-Doh clay; and Parker Brothers, the board game company that created the classic game Monopoly. However, in the 1980s, the company came under new leadership and decided to change its economic strategy. General Mills decided to refocus its efforts on a smaller number of industries, primarily industries in which the company had decades of experience. As a result, General Mills sold most of its holding in retail and toys and decided to focus on foods.

In 2000, General Mills began negotiations with Pillsbury to purchase the brand. Diageo, the large British company that had purchased Pillsbury in 1989, reached an agreement with General Mills to sell the company for about $10.5 billion. The former competitors were initially excited about the merger, believing that their business cultures and products were a good fit.

Once the purchase was finalized, General Mills became the fourth largest food company in the world. In the merger, General Mills added the popular brand Betty Crocker and Pillsbury’s line of baked goods. Though some analysts believed General Mills was pressured into paying too steep a price for Pillsbury, the merger quickly became profitable for the food giant. During the same time period, General Mills acquired Small Planet Foods and branched into organic foods.

Impact

General Mills is one of the largest global food companies, with more than one hundred brands as of 2023. Among those brands are Gold Medal flour, the best-selling flour brand in the United States; Green Giant frozen and canned vegetables; Hamburger Helper dinner mix; and Progresso soups. General Mills also sells numerous types of cereals, including Cheerios, Wheaties, Lucky Charms, and Trix. The company branched into ice cream by purchasing the brand Häagen-Dazs, and yogurt by partnering with the brand Yoplait. In 2022, General Mills sold their classic brands Hamburger Helper and Suddenly Salad to Eagle Family Foods Group for $610 million. Additionally, the company employed 32,500 people worldwide and claimed $19.955 billion in revenue.

Bibliography

“About Us.” General Mills, 2023, www.generalmills.com/about-us. Accessed 8 May 2023.

“General Mills Completes Sale Of Helper And Suddenly Salad Businesses.” generalmillscf.com, 5 July 2022, investors.generalmills.com/press-releases/press-release-details/2022/General-Mills-Completes-Sale-of-Helper-and-Suddenly-Salad-Businesses/default.aspx. Accessed 8 May 2023.

“General Mills Rings in 80th Anniversary on the New York Stock Exchange.” BusinessWire, 1 Dec. 2008, www.businesswire.com/news/home/20081201005687/en/General-Mills-Rings-80th-Anniversary-New-York. Accessed 4 Mar. 2019.

Hoium, Travis. “Why General Mills, Inc. Stock Has Dropped 24.3% in 2018.” The Motley Fool, 15 July 2018, www.fool.com/investing/2018/07/15/why-general-mills-inc-stock-has-dropped-243-in-201.aspx. Accessed 8 May 2023.

Snyder, John. “General Mills: The Leader in Packaged Foods.” Seeking Alpha, 16 Jan. 2019, seekingalpha.com/article/4233769-general-mills-leader-packaged-foods. Accessed 8 May 2023.

“This Week in Food History: The Creation of General Mills.” Manufacturing.net, 24 June 2015, www.manufacturing.net/blog/2015/06/week-food-history-creation-general-mills. Accessed 8 May 2023.

“Toying Around.” General Mills, 2019, history.generalmills.com/brand-toys-games.html. Accessed 4 Mar. 2019.

Wiener-Bronner, Danielle. “General Mills is Leaning Into Pet Food.” CNN, 19 Dec. 2018, www.cnn.com/2018/12/19/business/general-mills-pet-food/index.html. Accessed 8 May 2023.