In the technology sector we all know stories of storied companies that became too reliant on one product, only to be out-innovated or otherwise converted into a runner up in the marketplace. IBM with mainframes and Microsoft with Windows come to mind. Apple’s reliance on iPhones, though hardly having hurt the company yet, is a persistent concern.
Today, as I periodically do, I’m asking you to direct your attention completely away from technology, to another sector, this time the world of food. The decline of General Mills (GIS) over a product you might not even have known it makes—yogurt—is a cautionary tale for any business, technology included. And in the current issue of Fortune it’s a well-told tale in an article by John Kell, part of our ace food-coverage team.
General Mills, as Kell recounts, has been around a very long time, specifically to “the year after the Civil War ended.” It is responsible for such staples of the American diet as Gold Medal flour, Wheaties, Bisquick, and Cheerios.
It’s also a big player in yogurt, through its ownership stake in Yoplait. General Mills cleverly played off Yoplait’s Frenchness to convince Americans they liked yogurt. But more recently the company got caught flat-footed by upstart Chobani, which brought “Greek-style” yogurt to the American palate. Where Yoplait connoted artificial sweeteners, Chobani oozed artisanal and natural ingredients. Marketing messages or reality, Chonani has schooled Yoplait, which accounts for enough of General Mills’ revenues to put the whole company in a slump.
Dominant incumbent felled by a newcomer better tuned into what consumers want: In this case it’s a food company. But if you think you’re in an industry that couldn’t be affected by a storyline like this, think again.