General Mills is preparing to redesign its supply chain as the Cheerios and Nature Valley owner targets $3bn in cost savings over the next four years.

The company said its existing production and distribution network was built for a period when the business handled lower volumes and now needs to become faster and more flexible.

Chief operating officer Dana McNabb said the overhaul, which remains at an early stage, would help General Mills speed up product innovation and adapt its packaging more easily to different ranges, retail channels and consumer trends.

She said the company was considering how to “reimagine the supply chain for the future” so it could support profitable growth.

The work forms part of a wider efficiency drive that is expected to generate $3bn in cumulative savings by the end of its 2030 financial year.

Around $2bn will come from General Mills’ existing productivity programme, which is targeting annual savings equivalent to approximately four per cent of its cost of goods sold.

The remaining $1bn is expected to come from its global transformation programme and other efficiency measures, including redesigning its supply chain, simplifying internal processes and using technology to introduce new ways of working.

General Mills expects to deliver at least $750m of savings during its current financial year, which began on 1 June.

Chairman and chief executive Jeff Harmening said the savings would be used to offset continued input cost inflation, fund investment in its brands and support stronger earnings and cash flow.

The overhaul comes as branded food manufacturers face increasingly unpredictable demand, with cash-strapped shoppers switching between premium products, promotions and cheaper alternatives.

General Mills is also seeking to respond more quickly to changing consumer preferences, including growing demand for products with more protein and fibre, bolder flavours and more convenient formats.

Greater packaging flexibility could allow the business to adjust pack sizes and product assortments more easily for supermarkets, convenience stores, ecommerce platforms and other sales channels.

The company’s full-year sales fell five per cent to $18.4bn in the year to 31 May, while organic sales declined two per cent. Adjusted operating profit dropped 16 per cent to $2.8bn.

However, fourth-quarter sales edged up one per cent to $4.6bn, with organic sales flat, as General Mills increased promotions and sought to appeal to shoppers facing continued pressure on household budgets.

The group expects organic sales in its new financial year to range from a decline of 1.5 per cent to growth of 0.5 per cent, reflecting what it described as a challenging consumer backdrop and category growth below historic levels.

Its supply chain overhaul will be central to efforts to protect margins while giving brands including Cheerios, Old El Paso, Betty Crocker and Häagen-Dazs greater scope to respond to shifting shopper demand.

Sign up here to get the latest grocery and food news each morning