General Mills cutting G-Works innovation team, pausing 301 Inc. investments

General Mills is shutting down its in-house innovation studio, G-Works, and halting new investments through its venture capital arm, 301 Inc.

About 40 employees at the Golden Valley-based food company will lose their jobs as a result, per a source close to the situation.

G-Works — which built up small brands via teams of “founders” — has been a pipeline of new products for General Mills since launching in 2019, with teams expected to develop $100 million businesses within five years, an astounding pace for packaged food. General Mills originally founded 301 Inc. as an internal product incubator in 2012 but eventually shifted toward investing in promising external brands.

“We’ve introduced a new Strategic Growth Office and are adjusting how we pursue new growth initiatives,” General Mills spokeswoman Chelcy Walker said in a statement. “As part of these changes, we are discontinuing our G-Works program, and we are pausing additional investments through 301 Inc. for the foreseeable future. This does not impact Carbe Diem, Fera Pets or our current 301 Inc. portfolio.”

Low-carb pasta brand Carbe Diem, a G-Works product, is still on the schedule to appear at the nation’s largest food trade show, Expo West, this week. But Kristen Harvey — who became managing director of 301 Inc. last fall after Johnny Tran left to pursue his own startup — had a Startup CPG-hosted webinar with food entrepreneurs this past Thursday abruptly canceled amid General Mills' shifting strategy.

Beyond Carbe Diem, other G-Works brands include low-sugar snack-maker Good Measure and the short-lived Bold Cultr, which made lactose-free dairy products.

Current 301 Inc. investments include PetPlate (a meal-delivery service for dogs), pollination tracking firm Bee Hero and meat-free startup Everything Legendary. The most recent investment was in Keychain, a supply-chain company, late last year.

Company leaders told the division in a meeting last week that headwinds in the broader food industry necessitated the closure of the in-house incubator, a source said.

Toopan Bagchi, a PepsiCo and Quaker Oats veteran who now runs Starship Advisors, said he has seen the innovation pendulum swing like this before.

“I think what you find at large companies, the internal innovation is always challenged,” he said. “It never gets big enough to move the needle fast enough.”

Already, G-Works and 301 Inc. have bounced around from a “disruptive growth” team to the Gold Medal Ventures umbrella in recent years. Gold Medal Ventures kicked off in 2023 and focuses on “growth equity.”

General Mills is facing pressure to cut costs as it and other food companies struggle to deliver consistent growth. Analysts are predicting General Mills might lower its financial outlook when it announces its quarterly earnings later this month.

“You need a healthy core, and it makes sense to focus there first,” Bagchi said. “The rest is icing on the cake.”

General Mills did not give further details about the new strategic growth office.

“Innovation is central to our Accelerate strategy,” Walker said in the statement, referring to the company’s five-year-old corporate strategy.

Just last month, CEO Jeff Harmening touted the company’s innovation achievements, though he largely highlighted new iterations of the company’s existing billion-dollar brands like Cheerios and Old El Paso.

“We’ve been able to step up our contribution from innovation in recent years, including net sales from new product innovation up nearly 20% so far this year,” Harmening said at an investor conference. “And we’re excited about our innovation pipeline, including several launches that have the potential to be significant growth contributions.”