BEIJING: General Mills, the food group, expects sales in China to approach $1bn by 2015, a process driven by the country's growing middle class, and a focus on innovation.
The US multinational has three main points of focus in the world's most populous nation: Häagen-Dazs ice cream, Wanchai Ferry frozen foods and the snack brands Bugle and Trix.
Gary Chu, president of General Mills Greater China, told a company conference that revenues had grown at a "robust double-digit rate" in the last five years to $500m in 2012, and should hit $900m in 2015.
"There are clear reasons why we and other consumer products companies are excited about China," he added. "Favourable economic trends will increase our consumer base, and geographic and product expansion will drive growth in sales and profits."
More specifically, the number of middle class households in China is anticipated to double to 200m by 2020, creating "a growing market of potential General Mills consumers."
Chu also argued that meeting the precise needs of these shoppers will be vital. As an example, some 1.7m boxes of Häagen-Dazs mooncakes, costing between $25 and $100 each, were sold in the two-week Mid-Autumn Festival alone in 2011.
General Mills has also launched a seaweed-flavoured variant of Bugles potato chips, and has a chilli beef line in the works. To enhance its capabilities here, the firm is to open an R&D centre in Shanghai later this fiscal year.
"We design products that match the taste preferences of Chinese consumers," said Chu. "We see a tremendous opportunity for innovation across our business moving forward."
Häagen-Dazs also currently boasts 205 standalone stores, selling products in the $5–$40 range, in China, and will add 50 more outlets in 2012/13. "These locations are not typical ice creams shops. They are upscale dining destinations," said Chu.
Additional aims of General Mills include enhancing the presence of its brands throughout China's burgeoning retail network, which numbered 150,000 stores by the end of 2011, according to ACNielsen.
Wanchai Ferry dumplings are now available in over 130 cities, and its portfolio is expanding into segments like wonton, tangyuan, baozi and mantou, where competition is rising rapidly.
"Foreign brand privilege is going away ... The country is getting more and more competitive," said Chu.
A particular advantage for General Mills in such an environment has been retaining its core talent. "We have had the same leadership team in place for the past ten years, [which is] very unusual in emerging markets," Chu added.
Data sourced from General Mills; additional content by Warc staff