General Mills Tries Gluten-Free Sales in the Cloud

At General Mills, a new sales experiment is made possible with new technologies.

In 2008, executives of the food giant began to notice that people with sensitivity to gluten were finding it difficult to locate foods that lack this protein, found naturally in some grains. A year later, the company launched a website called LiveGlutenFreely.com that provided product information and other resources to people seeking a gluten-free lifestyle.

For an international food company that normally markets its iconic brands--including Betty Crocker, Pillsbury, Wheaties and Yoplait--on supermarket shelves, the concept was an ambitious experiment. To reach the growing demographic of consumers demanding gluten-free ingredients due to Celiac disease, allergies, or other health or dietary concerns, General Mills would relaunch its site as a new online distribution channel called "Gluten Freely."

With Gluten Freely, General Mills aims to tap a rapidly growing market. According to the research firm Euromonitor International, the gluten-free market reached nearly $1.3 billion in U.S. sales, and $2.6 billion worldwide, in 2011--more than double the 2005 levels. Those figures are projected to rise by at least five percent this year, and to more than $1.5 billion for the United States and $3.1 billion worldwide in 2015.

Bringing these products together at one destination would ensure that the company's array of gluten-free offerings would be easy to find, which might not be the case on store shelves. To launch the site quickly, General Mills, selected by U.S. News as one of America's Most Connected Companies for its innovative use of the cloud, turned to Microsoft and its Windows Azure platform.

[See America's Most Connected Companies.]

Building the site in the cloud offered General Mills several distinct advantages: It was able to ready the site twice as quickly as it could have done in-house, and at about half the cost. The company sidestepped the need for direct investments in new hardware, such as servers and software, and didn't have to worry about ongoing maintenance. In addition, through the magic of the cloud, the site can be easily scaled to match consumer demand as well as seamlessly extended to emerging markets.

General Mills has been pleased with the results of Gluten Freely, which launched in August 2011 and has been dubbed "America's go-to Web site for the gluten-free life" by the New York Times.

"While we can't share specific numbers sales or traffic numbers, we are very pleased with the results of the site during its first year, as it is meeting our expectations for a start-up business," said a General Mills spokeswoman via e-mail.

"The response to the GlutenFreely.com business has been overwhelming," said Dom Alcocer, who now serves as marketing manager at General Mills' organic brand Cascadian Farms, in a promotional video on YouTube. "In our first day, we had orders from over 25 states, and now, of course, we deliver to every state," says Alcocer, who played a key role in the site's development under his previous role as marketing manager, new ventures at General Mills. The company declined to make any executives available for this story.

There are 500 products on the Gluten Freely site--an increase of about 100 over the past year. One-fifth of the items are from General Mills, which carries a total of 300 gluten-free choices, from Bisquick pancake and baking mix to five flavors of Chex cereal. The other 400 items on the site are from other manufacturers that are permitted to use Gluten Freely to reach the same target audience.

[See How Technology Is Changing the Game for Consumer Giants.]

More than just a shopping portal, Gluten Freely is a resource about the gluten-free lifestyle. Books, blogs, community forums, coupons, health and beauty items, medical and nutritional advice, and recipes are available on the site, which has more than 109,000 Facebook fans and 2,400-plus Twitter followers.

While General Mills has drawn praise for its cloud strategy, it's an exception among its peers. Consumer-goods companies have generally been laggards on implementing cloud computing, says Pat Conroy, vice chairman and U.S. consumer products leader at Deloitte. "There are no companies right now in the consumer-products space that are highly evolved in this yet," he says.

There are indications, however, that cloud technology is becoming a higher priority. Kraft, the world's second-largest food company, is among the industry giants that sees ample opportunities in the cloud--and is stepping up its investments accordingly. As a global enterprise with about 126,000 employees worldwide and 220 manufacturing and processing facilities in more than 80 countries, Kraft is a recipe for operational and communication challenges.

That's why the company relied heavily on cloud services, also provided by Microsoft, to integrate its technology systems with Cadbury following its 2010 acquisition of the confectionary company, Bloomberg BusinessWeek reported last year.

[See our list of the top-rated consumer goods ETFs.]

"It's just another way to continue to expand what your company is--who you collaborate with," says Mark Dajani, senior vice president and chief information officer for Kraft, in a video testimonial on the importance of cloud computing. "You no longer limit your company by physical or technical boundaries." Kraft also declined to comment for this story.

Going forward, the sky is the limit when it comes to consumer-products companies and cloud computing. "This is still an early journey," says Conroy. "They haven't figured out what all the possibilities are."



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