Friday, July 03, 2009

GENERAL MILLS DISCOVERS GF IS GOOD FOR BUSINESS.

By ILAN BRAT

Mass marketer General Mills Inc. is carving out a niche in gluten-freefood after realizing it could reach eager customers without costly adcampaigns.
The company’s Betty Crocker brand is rolling out gluten-free mixes forcookies, brownies and cakes. The mixes are the first gluten-freeoffering from a major, mainstream brand in the cake-mix aisle. Gluten isa key protein in wheat, but many people react badly to it.
Ann Simonds, General Mills’s president of baking products, says thecompany decided to pursue gluten-free products last year after itscustomer-relations department noticed that customer inquiries about food allergies and sensitivities most frequently centered on whether items contained gluten.


“It used to be, as a marketer in the food industry, you needed a $50million idea to make the business model work,” says Ms. Simonds. “Today, you can meet an unmet need that will be a $5 million business . … That would be worth it for a company like General Mills.”
Last July, General Mills released a gluten-free version of its Chexcereal, and the company received thousands of grateful emails and phone calls.


Doctors increasingly are diagnosing Celiac disease — in which ingestinggluten causes the body to damage the digestive system. Moreover, a diet fad is focusing on reducing gluten consumption.
Although only about 1% of the U.S. population has Celiac disease,General Mills says its research shows about 12% of U.S. households want to eliminate or reduce their gluten intake, although some doctors say it’s nutritionally important for those who aren’t sensitive to it.
General Mills won’t disclose how much it’s spending for the gluten-freemarketing, but says it’s much less than what it normally dishes out fornational product launches.


The company’s move also reflects consumer goods makers’ growing use of digital tools to market less expensively to niche segments of consumers. In recent years, companies such as Procter & Gamble Co., candy-maker Mars Inc. and others have launched new products without marketing through TV, magazines or newspapers.
Instead, big marketers have relied on Web sites, toll-free numbers anddirect sales to customers such as doctors and specific retailers tointroduce some new products, says Alison Chaltas, a marketing consultant with Interscope LLC.


The Betty Crocker brand plans to spread the word by sponsoring onlinemarketing, advertising in gluten-free lifestyle magazines, andparticipating in gluten-related events. In early May, Betty Crockersponsored a booth at a Celiac Disease Foundation event in California.
The company paid for product links to show up more prominently whenpeople search “gluten-free birthday cake mix” and “gluten free dessertmixes” on Google. The company also sent hundreds of product samples to bloggers who write about Celiac disease, motherhood and related issues.


General Mills, which reported higher-than-expected fiscal fourth quarterearnings per share of $1.07 on Wednesday, plans to launch more than 50 new products — the gluten-free items among them — in the first half of the recently started 2010 fiscal year.
Even though retailers have been focusing on trimming products from their shelves recently, the new gluten-free products could get a welcome reception. “Gluten has increasingly become an area of dietary focus and concern for consumers, and we want to ensure our stores are able to meet their needs,” says Haley Meyer, a spokeswoman for grocery giant Supervalu Inc., some of whose stores are now carrying the new Betty Crocker products.
Currently, mostly small food companies supply gluten-free products.
Producing gluten-free cookie, brownie and cake mixes that consumerswould recognize as Betty Crocker products wasn’t easy. Gluten in wheat flour makes dough springy, helps cakes rise in the oven, and keeps cookies together. Most traditional baked goods contain at least 30% wheat flour.


From September to December, General Mills food scientists baked morethan 1,000 pans of brownies, cookies and cakes while conducting about 75 experiments with different formulations, says Jodi Benson, director of baking products research and development.
In initial experiments with yellow cake, the rice-flour mix wouldn’trise, leaving flat, dense and moist matter in the bottom of the pan, Ms.Benson says. The mix needed something to trap air.
They tried removing some water, substituting butter for oil and uppingthe egg ratios among other things to get the batter to rise in the oven.
After adding testing procedures in its own factories to assure agluten-free environment, General Mills is rolling out the new mixesacross the country. The mixes will sell for about $2 more than thetraditional Betty Crocker mixes.
“We refer to [the customer base] as narrow but deep,” says Dena Larson, marketing manager in the baking products division. “This may be the only brownie [a customer] buys.”

9 comments:

Pambobanker said...

Great article on General Mills - too bad they don't plan to sell either product in Canada - I have emailed them about both - unless of course they start getting letters from all of us!! We can only hope. The Chex are excellent my parents brought back 4 boxes when they returned from wintering in California

Allison the Meep said...

I'm very curious about these mixes. Obviously, I prefer to make my own stuff from scratch, since I'm opening a bakery. But I think it's so great for people who aren't big on baking.

H.Peter said...

Hi pam,

the issue is the same with Post, the maker of Cocoa pebbles. They don't want to dual label for our friends in Quebec.

H.Peter said...

Hello Allison,

no matter how hard they try, they can never duplicate a small batch cookie recipe.

Mrs. Field's cookies is the perfect example, once upon a time, they were the best thing out there, now, part of some huge conglomerate, they are so so.

You can hire Victoria for consulting. Or even better, start a GF Patisserie in your city.

Allison the Meep said...

hmm - i may need to eventually hire her for consulting. she's already been successful, and i'll need some tips!

gfe--gluten free easily said...

I think this is a good thing in general, but I've never been one for mixes and I'm not crazy that these mixes have soy. I was also hoping that the prices would be the same or much closer to the same. I figured with the volume they'd be doing, they could get the costs down. The mixes have been spotted in our area at about $5 a box. In any regard, I have issues with the Rice Chex (and others have reported the same), so I must be a person who is more sensitive than the less the 20 ppm standard. I do fine with 10 ppm products.

Anyway, thanks for sharing the article and info!

Shirley

H.Peter said...

Hi Shirley,

super sensitive to gltuen. Unreal.

Did you try Cocoa Pebbles? I am curios because Victoria does not react to them, though they are not declared GF.

gfe--gluten free easily said...

I react worse to Cocoa Pebbles than I do to the Rice Chex. I get terrible stomach cramps and feel like I am in a daze for hours. Like an idiot, I've tried them several times ... always greatly regretting it afterwards. I'm like "the canary in the coal mine" I feel, so I caution others who eat them with no reaction.

Shirley

H.Peter said...

Wow. I am shocked.
As mentioned inthis blog before, it's our cereal of choice for Isabella.