Question

General Mills needs a steady supply of ingredients for processing. What are some risks the company faces regarding its ingredients?

Answer 1

(1) Risks related to product development and supply

The beverage and food industry is highly susceptible to changes in consumer preferences. In order to generate revenues and profits, we must have product offerings that appeal to consumers. Although we strive to effectively monitor changes in the markets for our products, there is no assurance that we will develop new products that appeal to consumers

(2) Risks related to competition

The beverage and food industry is highly competitive. We compete with major international beverage companies that, like us, operate in multiple geographic areas, as well as numerous companies that are primarily local in operation

We also compete with a variety of regional and private label manufacturers,  

(3) Risks related to potential acquisitions and joint ventures

Identifying and taking advantage of additional acquisition and market entry opportunities in Japan, Europe, other developed markets, and emerging markets is an important part of our growth strategy

(4) Risks related to international operations

Our global operations and ongoing investment in developed and especially emerging markets mean we are subject to risks involved in international operations generally. Such risks include among others:

the need to comply with differing or undeveloped legal, regulatory, and tax regimes;

negative economic or political developments;

fluctuations in exchange rates; and

disruptions from extraordinary events such as terrorism, political instability, civil unrest, or infectious diseases.

(5) Risks related to business plans and management strategies

6) Risks related to our product safety

(7) Risks related to distribution channels