General Mills must navigate cultural differences as it seeks to build its brands in countries around the world.
In this country, Häagen-Dazs ice cream is a supermarket staple. In China, General Mills' Häagen-Dazs is primarily found in restaurants bearing the ice cream's brand name.
The difference highlights a challenge that big food companies like General Mills face in adapting to local tastes. Americans like their Häagen-Dazs in pints; the Chinese as a fancy dessert during an evening out.
A lot is at stake in solving the taste equation: Global markets, particularly in rising countries like China, are the big growth spot for packaged food makers. In 2010, the Asia-Pacific region passed Canada as General Mills' second-largest overseas market and is closing in on Europe.
The Golden Valley-based company's international business has steadily grown -- from 10 percent of sales to 25 percent -- since the company acquired crosstown rival Pillsbury in 2001. While General Mills has long been a big global force in cereal, Pillsbury gave it Häagen-Dazs and other brands critical to building international sales.
(In the United States, Häagen-Dazs is produced by Nestlé under license, a legacy of the Swiss food giant's onetime joint venture with Pillsbury).
The Star Tribune sat down recently with Christopher O'Leary, head of General Mills' international business:
Q Food seems like a particularly culturally sensitive industry because tastes can be so local. How do you succeed in transplanting well-known U.S. brands?
A First, it's our people strategy. We believe very strongly that our China business has to be run mainly by people who speak Mandarin and grew up in China and understand the culture. It's the same in other countries. Also, you have to ask yourself the question, "Will consumers eat a product as it exists, or should we create a similar, but new brand with a taste profile or other attributes that are more appropriate for where we are in the world?"
Q Give me an example.
A Häagen-Dazs. The Chinese like green tea flavored ice cream, so our second-biggest flavor in China is green tea. It doesn't sell well in France or the United Kingdom, but in Asia, if you didn't have green tea you'd be missing a tremendous opportunity. And when Häagen-Dazs travels around the world, we always launch it through restaurants, through shops. In China, there are about 200 Häagen-Dazs restaurants, and people wait in line to get in. They are presented with a 10-page menu, and they stay for an hour. It's not an ice cream cone they're buying. It's an occasion. People go to a shop to propose, they'll go for an anniversary. They'll go to meet their families for Chinese New Year's.
Q Your other anchor in China is Wanchai Ferry brand frozen dumplings. Tell me about that.
A Wanchai Ferry is a pier in Hong Kong. There was a woman, Madame Chong, who fell on tough times and needed to earn a living, so she started selling dumplings from a pushcart. People raved about them, and she had the wisdom to get them into frozen packaged goods in Hong Kong. She had a dream of going into mainland China, but didn't have the money. So she sold the company to Pillsbury. Today, it is the No. 1 dumpling business in China. It's in 100 cities, and dumplings are a huge category. There are dumplings you eat in the morning, afternoon and evening. Wanchai Ferry and Häagen-Dazs are about the same size and together account for about 80 percent of our business in China.
Q Why has Wanchai Ferry done so well?
A We're giving consumers what they need - healthy, tasty, convenient food to help them live as they move into the middle class. People become time starved. Both parents are working and they are coming home and they can't knead dough and make dumplings. Just like us, they no longer know how to cook like their grandparents cooked. This sort of thing happens around the world. In India, the real innovation for us so far is packaged flour. In the U.S., flour is almost an artisan food for people who want to bake. We've got more convenient options, in-store bakeries or mixes like Betty Crocker. In India, one of the biggest convenience foods is packaged flour since most Indians still keep raw wheat in their homes and bring it to a local grinder. Our Indian flour brand, Atta, has been extremely successful for us.
Q General Mills has licensed the Yoplait brand in this country for decades, making it the yogurt leader. Last year, the firm paid $1.2 billion for a controlling stake in France-based Yoplait S.A. What's your worldwide Yoplait strategy?
A It's a great global category, one of the fastest growing in food. We bought a very nice yogurt brand, the second largest in the world. The strategy is to capitalize on the category's inherent growth in countries we are already in, and consider launching Yoplait in emerging markets. Yoplait is not in China today. It's not in Russia. It's not in India. I could go on. We have not announced our plans, but China obviously, as it's central to our international strategy, is something we will have a lot of discussion about.
Mike Hughlett • 612-673-7003