General Mills increasingly relies on third-party manufacturers amid high demand as consumers continue to eat more meals at home
By Mark Maurer Close Mark Maurer July 27, 2020 5:30 am ET General Mills Inc. is relying more than ever on third-party manufacturers to meet heightened demand for its products, though asking others comes at a significant cost to the maker of cereal and soups.
The company has worked with manufacturing partners for decades in the U.S. and Europe, contributing to the making of roughly 30% of General Mills’s North American products, Mr. Church said. Mr. Bruce declined to name the cost of increased outsourcing, but described it as “tens of percentage points higher cost versus an internal manufacturing cost.”
“What’s unknowable right now is how long you are going to need the additional capacity, which is the benefit of seeking out an external supply-chain capacity solution,” said Mr. Bruce, who joined the company in 2009 and became CFO in February of this year. “You’re not stuck with the cost of those assets if the demand evaporates or goes away pretty quickly.”
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