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Discussion Board Forum 1
BUSI534: Business Valuation
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Choosing a Company: General Mills
General Mills, while a familiar household name, has an extensive history in which many
are unfamiliar with. The foundation for General Mills began in 1866 when Cadwallader
Washburn built his first flour mill in Minneapolis, Minnesota (General Mills, 2021). In 1878, the
mill exploded and led Washburn to begin the development of a technology that would increase
the safety of mills, which he eagerly shared with competitors (General Mills, 2021). James Ford
Bell became the president of Washburn’s company in 1925 and, three years later, received an
offer from an underwriting firm that wanted to purchase the company for $40 million (General
Mills, 2021). Although the deal fell through, Bell was inspired to begin purchasing other
companies, as well as reshaping the milling industry, which led to the creation of General Mills
in the summer of 1928 when it was incorporated in Delaware (General Mills, 2021). A few
months later, the initial public offering started at $65 and quickly climbed to $86 (General Mills,
2021). Although the Great Depression began shortly after, General Mills flourished, its net
income rose, and it consistently paid dividends to stockholders (General Mills, 2021). During
this time, Bell created a research department that led to the creation of a puffing gun that made
puffed cereal, and Kix cereal was born (General Mills, 2021).
Once World War II began, General Mills turned its attention to war-related projects, such
as torpedoes and gun sights (General Mills, 2021). Interestingly, General Mills became known
as one of the best precision manufacturers (General Mills, 2021). Furthermore, General Mills is
credited with creating the “jitterbug” torpedo, which was the first torpedo that could bypass an
enemy, fool the enemy into believing that danger had passed, and then adjust course and make a
U-turn to strike the target (General Mills, 2021). During this same time, General Mills also
created Cheerios (General Mills, 2021). Soon after, an engineer working for General Mills made
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a significant contribution to the war effort by redesigning the gun sight on the 55-caliber gun that
was the centerpiece of the U.S. Naval ships (General Mills, 2021). At this time, General Mills
was producing a diverse range of products including gun sights, breakfast cereals, dehydrated
eggs, sandbags, soup, and vitamins (General Mills, 2021).
Following World War II, General Mills opened its aeronautical research laboratory and
began working with the government to create balloons that could carry up to 250 pounds into the
upper atmosphere, as well as other top-secret projects (General Mills, 2021). Following its work
with balloons, General Mills began manned flights that contributed to space flight and conducted
research regarding solar flare activity and Earth’s atmosphere (General Mills, 2021). In the
1950s, the mechanical division of General Mills began working with the University of Minnesota
on a device that would later become known as the black box, which measured the atmospheric
conditions of aircrafts (General Mills, 2021). After World War II, General Mills also invested in
an appliance division that produced waffle irons, food mixers, deep fryers, and coffee makers,
although it sold this division a few years later (General Mills, 2021).
In the 1960s, General Mills worked with an engineer to develop a submarine, called
ALVIN, that located a lost hydrogen bomb in the Mediterranean Sea, discovered new aquatic life
near Galapagos Islands, and examined the remains of the Titanic (General Mills, 2021). It was
also during the 1960s that General Mills further diversified and entered into the toy industry
when it made several acquisitions of toymakers, including Parker Brothers (General Mills,
2021). General Mills also developed a new method of flour milling during this time (General
Mills, 2021).
During the 1980s, General Mills began to divest its toy and retailing businesses in order
to focus on its core food business (General Mills, 2021). The strategy worked as its yogurt
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division, Yoplait, achieved national distribution, its cereal, Cheerios, was recognized to have
health benefits, and it began international expansion through its joint venture with Nestle, Cereal
Partners Worldwide (General Mills, 2021). In 2000, General Mills purchased Pillsbury, which
began operations at the same time as General Mills on the opposite bank of the Mississippi River
(General Mills, 2021). The acquisition of Pillsbury was considered one of the most significant
events in General Mills’ history (General Mills, 2021). The purchase was indeed profitable as
both companies complemented each other well (General Mills, 2021).
Today, General Mills is one of the top makers of natural and organic foods with an
extensive portfolio of natural and organic lines (General Mills, 2021). Additionally, General
Mills is not only turning its focus towards the manner in which its products impact its
consumers’ health and finances, but also how its products affect the environment (“What is,”
2020). It is focusing on reducing greenhouse gas emissions from its supply chain by 28 percent
by 2025 (“What is,” 2020). General Mills also “intends to partner with organic and conventional
farmers, suppliers and trusted farm advisors in key growing regions to drive the adoption of
regenerative agriculture practices on 1 million acres of farmland by 2030” (“General Mills,”
2019, para. 1). Regenerative agriculture involves holistic farming practices that attempt to
enhance and protect farming communities and natural resources (“General Mills,” 2019). Since
it announced its intention to adopt regenerative agriculture practices, it has launched three
regenerative agriculture pilots (“General Mills launches third,” 2020).
General Mills defines its purpose as making food the world loves and prides itself on its
strategy of putting its customers first (General Mills, 2021). General Mills strives to serve,
connect, and build trust with consumers by deeply understanding the needs and lives of its
consumers and adapting to those needs (General Mills, 2021). General Mills is a company of
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brand builders that has retail sales of over $1 billion worldwide and is continuously evolving to
drive long-term growth (General Mills, 2021).
General Mills operates in five segments including North America Retail, Convenience
Stores and Foodservice, Europe and Australia, Asia and Latin America, and Pet (General Mills,
2020). Furthermore, General Mills currently focuses on global categories such as ready-to-eat
cereal; yogurt; natural pet food; premium ice cream; baking mixes and ingredients; refrigerated
and frozen dough; snacks, including grain, fruit and savory snacks, nutrition bars, and frozen hot
snacks; and convenient meals, including meal kits, ethnic meals, pizza soup, side dish mixes,
frozen breakfast, and frozen entrees (General Mills, 2020).
General Mills’ stock performance has been steadily increasing over the past few decades
with a slight decline in 2018 after reaching its peak in 2016. Despite the pandemic and negative
economic consequences due to COVID-19, General Mills has thrived (General Mills, 2020). It
far surpassed its financial targets of 2020 due to a significant increase in the demand for at-home
food (General Mills, 2020). Additionally, its stock market price during the summer of 2020 was
the second highest it has ever been and just slightly below its peak in 2016. General Mills also
began an initiative called “Manufacture to Donate” during the pandemic in which its production
lines remained open in order to manufacture and donate food and other products to hunger relief
agencies throughout the United States (“General Mills launches product,” 2020). General Mills’
generosity and concern for others has significant biblical implications. According to Hebrews
13:16 (English Standard Version), “Do not neglect to do good and to share what you have, for
such sacrifices are pleasing to God.” Moreover, Luke 6:38 (English Standard Version) states,
“Give, and it will be given to you. Good measure, pressed down, shaken together, running over,
will be put into your lap. For with the measure you use it will be measured back to you.” During
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General Mills’ 2020 fiscal year, it was able to accelerate its organic net sales growth rate,
maintained its strong adjusted operating profit margins, and reduced its leverage (General Mills,
2020). Its consolidated net sales increased five percent, and its operating profit increased 17
percent (General Mills, 2020). General Mills has also consistently paid dividends without
interruption for 121 years (“General Mills releases,” 2020).
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References
English Standard Version Bible. (2001). Crossway Bibles.
General Mills. (2020). Form 10-K. General Mills. https://investors.generalmills.com/financial-
information/annual-reports/default.aspx
General Mills. (2021). A look back on 150 years. General Mills.
https://history.generalmills.com/the-story.html
General Mills backs regenerative agriculture. (2019, March 5). Delta Farm Press. https://bi-gale-
com.ezproxy.liberty.edu/global/article/GALE%7CA577102296?
u=vic_liberty&sid=summon
General Mills launches product donation program. (2020). Corporate Philanthropy
Report, 35(6), 1-12. https://doi.org/10.1002/cprt.30597
General Mills launches third regenerative ag pilot. (2020). Corn and Soybean
Digest. http://ezproxy.liberty.edu/login?qurl=https%3A%2F%2Fwww.proquest.com
%2Ftrade-journals%2Fgeneral-mills-launches-third-regenerative-ag%2Fdocview
%2F2414227821%2Fse-2%3Faccountid%3D12085
General Mills releases quarterly dividend. (2020, July 6). Entertainment Close-
up. https://link.gale.com/apps/doc/A628665389/BIC?
u=vic_liberty&sid=BIC&xid=b2ad74ba
What is General Mills up to? (2020, March 24). Delta Farm Press. https://bi-gale-
com.ezproxy.liberty.edu/global/article/GALE%7CA618398023?
u=vic_liberty&sid=summon
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