Inside General Mills
|Sept. 13, 2010
|| General Mills Corporate Communications |
Second-largest cereal producer turns 20, with style
The world’s second-largest cereal producer, Cereal Partners Worldwide – a 50-50 joint venture between General Mills and Nestlé – celebrates its 20th birthday this year enjoying volume growth and more than $2 billion in net sales.
Cereal Partners Worldwide (CPW) markets more than 50 brands – including Fitness, Cheerios, Chocapic and Nesquik – in more than 130 countries around the world.
“Expanding geographically to seed growth was central to the first 20 years of CPW,” says Ken Powell, General Mills chairman and chief executive officer.
Powell would know. Spanning 1999 to 2004, he was CEO of the venture.
Headquartered in Lausanne, Switzerland, CPW operates more than a dozen factories and employs nearly 4,000 workers around the globe. The company operates through seven regions including Europe, Middle East & Africa, Latin America and Asia.
In fiscal 2010, General Mills reported that the company’s share of CPW net sales exceeded $1 billion, and pound volume for the venture grew 4 percent.
Recalling the beginning
The idea for the partnership got its start in 1989, when General Mills Chairman and CEO Bruce Atwater traveled to Vevey, Switzerland, to meet with Nestlé CEO Helmut Maucher. Charlie Gaillard, who had just finished a nine-year stint as Big G general manager, traveled with Atwater to develop a strategy for entering the international cereal market.
The meeting went well, and Maucher agreed to the proposal on the spot. Gaillard reports in a General Mills archival report that, “It was an amazing display of quick decision-making … Driving back to Geneva after the meeting, Bruce was ecstatic. He felt, rightly so, that this agreement would be transformational for General Mills, as indeed it has turned out to be.”
Each of the partners brought different attributes to the partnership. General Mills provided cereal marketing expertise, technical excellence and a portfolio of successful brands. Nestlé brought its distribution network, local market expertise, and sales and supply chain capabilities.
Trading commenced in France, Spain, Portugal and the United Kingdom in January 1991.
The venture also brought together diverse cultures. Gaillard, who was tapped to be the organization’s first leader, recalls that when the doors opened, there were 14 pioneers representing six nationalities.
The differences played a role in the development of CPW’s entrepreneurial culture, described even today by current CEO Christi Strauss, as “the power of the big and the spirit of the small.”
Inside General Mills