World Grain - February 2013 - 46

FEATURE: A CONVERSATION WITH GREG SCHLAFER

we have vertical integration. The model works really well.”
Emphasizing that the actual milling
of wheat is far from an afterthought
at General Mills, Schlafer noted the
company has been investing in wheat
and oat research to ensure an adequate
supply of some of its most important
raw materials.
“For instance, we’re doing research
with 25 growers in Idaho to ﬁnd ways
to make nutrient management and pest

if you have a large category that is sluggish, the best way to grow is through
innovation. Bob McDonald of Procter
& Gamble said, ‘Promotions may win
quarters, innovations win decades.’”
As an example at General Mills,
Schlafer said a success in the pancake
category demonstrates that well considered, incremental improvements sometimes achieve great results.
Targeted at school cafeterias, the
company’s Pillsbury brand mini-pan-

“Mills are still important to the business. We have broad origination resources. In some cases we have vertical integration. The
model works really well.
— Greg Schlafer, General Mills, Inc.
Greg Schlafer

keeping unit (sku) may result.
“You don’t want 500 different ﬂour
sku’s,” he said. “We go in with a total category approach. We understand brands,
and we have a large direct sales force.”
Schlafer said the latter points are central to the company’s continuing success
in the sacked ﬂour market. “It is differentiation — brands and people,” he said.
“Most of our business is branded sacked
ﬂour. We have terriﬁc sales people.
They are able to provide solutions in a
difﬁcult to understand category, something that resonates with customers. Our
business has been growing nicely.”
An added advantage the company is
able to leverage is the breadth of the
products it offers beyond its heritage
milled products. “When we walk into a
distributor, we discuss much more than
ﬂour,” Schlafer said. “We’re in all three
temp states — dry, refrigerated and frozen. We have a broad conversation.”
While these conversations may be
a far cry from those in the days of the
Washburn Crosby Co. (the former name
of General Mills), ﬂour milling still
has an important place at the company,
Schlafer said. “Mills are important to
the business,” he said. “We have broad
origination resources. In some cases
46

management more sustainable,” he said.
The company operates ﬁve U.S.
ﬂour mills, with locations in California,
Montana, Iowa, Missouri and New
York. Its 77,500 cwts of daily milling
capacity make it the sixth largest U.S.
milling company, a ranking that understates the importance of General Mills
in the U.S. ﬂour market.
In addition to the ﬂour it mills, the
company buys large amounts of ﬂour
from other milling companies.
For at least a decade, General Mills
has been thought to be far and away
the largest user of ﬂour in the United
States. It assumed this position with the
acquisition of Pillsbury — a major ﬂour
user that had sold all its mills during the
1990s (General Mills sold roughly half
its mills in the mid-1960s, but has never
exited ﬂour milling). Given that he is involved in a broad array of food categories, including yogurt and granola bars,
Schlafer said he remains upbeat about
the outlook of ﬂour-based foods.
“Absolutely,” he said. “Yes, it is a
very large, mature category. Consumers
may ebb and ﬂow with movements like
Atkins and gluten free. But we offer nutritious products like whole wheat toast
and fun products like cupcakes. Over
time it is a good category. I will say that

cakes have sold extremely well in the
two years since they were introduced,
Schlafer said.
“We certainly didn’t invent the pancake,” he said. “But schools needed help
meeting nutrition regulations. The pancakes contain whole grains and less sodium and fat. Kids don’t like their food
touched. The packaging allows for easy
preparation. Operators don’t like the
cost or mess of syrup, and in our product the maple ﬂavor is baked into the
pancake. Innovation kick starts growth.
Most innovation is insight driven.
“The mini pancakes help increase
K-12 participation in breakfast. There
is such a large number of children who
don’t get breakfast at home. We know
that when they eat breakfast, kids are
better students. This ﬁts well with our
mission — Nourishing Lives.”
Schlafer complimented the baking
industry for exactly this kind of insightdriven innovation in recent years, citing
sandwich thins as one example.
HUMBLED BY CHAIRMANSHIP
While he joined General Mills a quarter century after the company ceded its
position as the largest ﬂour miller in the
world with a massive milling shutdown
in the mid-1960s, Schlafer said he is
February 2013 / World Grain / www.World-Grain.com

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World Grain - February 2013

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