Milling & Baking News - June 14, 2022 - 11

'Can't see them coming': Nudi details
General Mills supply chain issues
MINNEAPOLIS - Supply chain issues
at General Mills, Inc. have been layering
one atop another over the past two-plus
years, said Jonathon J. Nudi, group vice
president, North American Retail.
Mr. Nudi participated
in a question-and-answer
discussion about the General
Mills business June 1
as part of the RBC Capital
Markets Consumer and
Retail Conference. Conducting
the Q&A was
Sunil Modi, RBC's lead
consumer analyst.
" We're seeing 10 times
the number of disruptions
in our supply chain
from an ingredient standpoint
coming into our plans than we ever
experienced before, " Mr. Nudi said. " And
this gets really challenging because we
can't see them coming in many cases. So
a truck is supposed to show up with oil
at our refrigerated dough plant in Tennessee
and doesn't show up. So we have
to shut the line down. Obviously, that
creates lots of issues in terms of having
the right amount of product and supply
to our customers. And at the same time,
it drives a lot of incremental costs as well.
So we have thousands of these material
disruptions every single month now,
and it's something that we haven't seen
before. "
A tight labor market has been a longNudi
standing
issue, compounded by COVID,
which precipitated global supply chain
problems, Mr. Nudi said. The subsequent
war in Ukraine and resultant material
disruptions have created unprecedented
challenges, he said.
The difficulty isn't completely around
availability of General Mills' principal
ingredient - grain. He said 90% of the
company's grain supply is sourced in
North America.
" So availability is really not the issue
for us, " he said. " We have the ingredients
that we need. It's really price, and it's
bakingbusiness.com
a global grain market. So we've been
impacted by that ... Starch, frankly, it's
something I didn't realize that we use in
so many different products. It's really
used as a processing aid, and starch has
been constrained for
over a year now, and
that's been a real challenge
for us. Oil, a little
bit of knock-on impact
of what's happening in
Ukraine has become a
challenge from a supply
standpoint. Even beyond
that, again, I'm learning
all kinds of things I didn't
know, but oil has to ship
in specific trucks that are
built for shipping oil and
have drivers that are specifically trained
to drive this truck. There's a shortage of
those truckers right now. "
General Mills has disclosed its supply
chain difficulties and how they have
affected the company's baked foods, Totino's
hot snacks business and refrigerated
dough. Conditions have improved, Mr.
Nudi said.
" If you look at our on-shelf availability,
we're back to where we need to be, " he
said. " But then other things pop up. The
oil issue that I talked about is a real challenge
for us right now. "
The challenges have management's
full attention, Mr. Nudi said.
" I have a weekly control tower meeting
where I meet with our team on the
biggest issues that we're facing and
really help try to break down barriers
and do things differently than we've
done before, " he said. " So trying to build
resiliency back in the supply chain will
help us from a sales standpoint as will
actually being better in stock levels, and,
at the same time, hopefully take out some
costs over time as all these disruptions
are very costly as well. "
While General Mills has experienced
challenges associated with COVID and
the tight labor market, the difficulties
have not been principally at facilities the
company operates, Mr. Nudi said.
" Our frontline workers showed up at
work every day and kept cranking out
products for our consumers that needed
food and our products more than ever
before, " he said. " And we didn't lose
many of them throughout the pandemic.
Obviously, as people had family issues
or health issues, they would take care of
those, but they would come back. And
part of it is we have a long history with
these employees, and we treat them well
and they treat us well. So that's been great.
" The bigger knock-on effect has really
been that many of our suppliers have
had real issues with labor. And I think
that drove a lot of these ingredient issues
that I talked about as well. "
He added the company's distribution
centers have experienced labor issues
but that those have been improving
recently. MBN
GENERAL MILLS SELLS STAKE IN JOINT
VENTURE IN ISRAEL
MINNEAPOLIS - General Mills, Inc. on
May 31 announced it has sold its 60% stake in
its joint venture in Israel to Bodan Holdings, its
partner in the joint venture. The joint venture
primarily marketed dough products in the
region.
" This divestiture represents another step
in General Mills' accelerate strategy, which
is centered on strategic choices about where
to prioritize our resources to drive superior
returns, " General Mills said. " Internationally,
the strategy includes efforts to reshape the
company's portfolio for sustainable, profitable
growth by increasing its focus on advantaged
global platforms, which include Mexican food,
super-premium ice cream and snack bars. "
The announcement comes a little more than
six months after General Mills agreed to sell
its European dough businesses to The Cerelia
Group. MBN
MILLING & BAKING NEWS 11
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Milling & Baking News - June 14, 2022

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