General Mills building new $54M pilot plant in Golden Valley

General Mills is building a $54 million pilot plant in Golden Valley, adding much-needed space to put new products on shelves faster.

The investment is the biggest yet at the 65-year-old James Ford Bell Technical Center and comes as General Mills and other big food companies struggle to find a winning formula for growth.

“It’s a critical time to make sure we’re firing on all innovation cylinders and having a line of sight to where consumers are going,” said Lanette Shaffer Werner, chief innovation, technology and quality officer at General Mills.

The 30,000-square-foot, two-story addition adds to an increasingly cramped technical center that houses about 1,000 employees just north of the company’s main headquarters.

“As we think about portfolio shaping and organic growth, we have to have the space to do that kind of work,” Shaffer Werner said. “We need more agile, flexible space for new ingredients and processes.”

The investment comes in the face of the company’s ongoing “transformation initiative” that is shedding jobs in order to pay for new product development and other sales-boosting initiatives.

“We see management’s actions as prudent and likely to help restore growth,” Morningstar analyst Kris Inton wrote earlier this year.

When the expansion opens next fall, it will add 20% to existing pilot plant space to help test small runs of new and updated products. Shaffer Werner said it will require new production and technical employees.

“It’s an important message not only to our employees but the broader community that we’re investing in our hometown,” she said.

General Mills is already leaning more on innovation to boost growth, which has wobbled in the wake of pandemic-era price increases.

While the company could simply buy fast-rising brands, CEO Jeff Harmening pointed to an in-house hit at an investor conference earlier this year.

“There have been [cereal] brands like Magic Spoon that have been growing for six years in low sugar and high protein,” he said. “Well, we launched Cheerios Protein six months ago. It’s already bigger than Magic Spoon.”

“All our big launches will, at some point, go through a pilot plant,” Shaffer Werner said. “I’m excited about having more capacity to innovate.”

The company is especially keen to keep adding protein to satisfy consumer hunger for the nutrient, Piper Sandler analyst Michael Lavery wrote in a research note last week, alongside other new product launches.

Innovation is seen as a major focus for General Mills, “which it expects to step-up broadly across its portfolio,” Lavery wrote. “However, innovation only works if the correct price points are in place, which is another key area of investment and focus.”