‘Double-digit growth in 2020 -21 still possible’
The $17.6-billion US food major General Mills is in search of growth in the urban economy in India that is currently shattered by overall slowdown and job losses. BALKI RADHAKRISHNAN, vice-president (V-P) and managing director (MD), operations, Asia, Middle East and Africa, for General Mills, is hopeful of steering clear of the ongoing crisis by expanding its top line in India. Radhakrishnan shares with Arnab Dutta his views on a range of topics – from GM food to the resurgence of kiranas. Edited excerpts:
Where does India stand in General Mills’ overall scheme of things?
India plays a key role in General Mills’ overall business. It houses the second largest number of our white collar employees as our global business service hub is based out of Mumbai. Be it product development, logistics and supply chain management, information systems, financial processing or market research, our Mumbai operations mirror every functional capability that we have in our headquarters in Minneapolis, US. It acts as an extension of our business functions at the headquarters and even supports our manufacturing facilities in North America.
Is India among the top markets for General Mills?
Our India business is not as big as the growth potential that we foresee. We believe, India has a significant potential to contribute a lot more to our global top line. In the Asia, West Asia, and Africa region that I oversee, India contributes 20-25 per cent of its revenue. Globally, India is among the top
10 priority markets for General Mills, in line with our top markets like the US, Canada, the UK, France, and Australia. Currently, India does not feature among the top 10 markets, in terms of revenue, but it probably is among the top 15.
The local government has apprehensions over usage of GMO (genetically modified organisms). What is General Mills’ stand?
General Mills supports use of advanced scientific tools (like genetic modification). The ever growing population requires ever larger numbers of mouths to be fed. And, advances in food science have extremely important role in that. Specifically in India, our portfolio matches the regulatory bindings and it is non-gmo.
How will the lockdown impact growth for 2020-21?
During the lockdown, we completed our employee appraisals and traineeship programmes. Also, we have hired, on average, one person every day during the period to strengthen our team. So, we are fully prepared to increase focus on consumers. For the B2B segment, we are helping bakeries through a vertical start-up programme that includes Fssai-approved training programmes. These measures will reflect in our performance in the next two quarters, and I believe we can still grow by double digits in 2020-21.
How will the Covid-19 pandemic alter long-term investment plans?
As the pandemic impacts consumer behaviour, there could be some adjustments in terms of offerings, but our long-term plans and commitments remain intact. Investment will be required to further strengthen our consumer reach, especially in the e-commerce side of business, and in bringing in global capabilities to India.
Do you expect a turnaround anytime soon?
The Covid-19 crisis is still unfolding and we don’t yet know how long the tail of the storm will be. Thus, we need to stay agile and resilient. Irrespective of whether the overall pie expands or shrinks, we believe we have a larger role to play. I am optimistic that the overall business environment will revive backed by a quick turnaround of the economy.
What has been its impact on distribution channels?
E-commerce business is growing exponentially since March, and its contribution in the past 10 months has grown more than it has in the past 10 years. From a low singledigit share in our total business, it is touching a high single-digits.