Currently browsing posts about: Kellogg

If Kellogg’s splitting into two companies and changing its business model makes no sense to you, join the crowd.

Apparently, Kellogg is not selling enough cereal to keep its stockholders happy: ready-to-eat cereal unit sales declined in both 2021 and 2022 by roughly 8.5% and 3.5%,

To try to fix this, Kellogg has split its North American company into two new companies.

• I.  WK Kellogg Co: cereals alone ($2.7 billion in sales in 2022)
• II. Kellanova: snacks and plant-based protein brands ($13 billion).  The company expects 50% of its business to come from five brands: Pringles, Cheez-It, Rice Krispies Treats, Pop-Tarts and Eggo.  It will also sell Kellogg cereals internationally.

Somebody has to explain to me why this will make a difference.

• More focused attention on cereals?
• Hope that some bigger company will buy one of these?
• Stock splits for investors?

Will this do anything for Kellogg’s customer base?  Seems doubtful, but let’s wait and see.

Stay tuned.

When I saw this headline—Beyond breakfast: How Kellogg’s used AI to evolve cereal marketing amid the pandemic—I wanted to know right away how Kellogg is using artificial intelligence to sell more breakfast cereal.

The big data found that now new consumption occasions for cereals have gone beyond breakfast – these are being used in proper recipes for cooking and baking, as a result of increased interest in home cooking and home baking during the pandemic.

Like what proper recipes?

So think of recipes such as fried calamari with Corn Flakes, or using Fruit Loops with pancakes.

Oh.  Hadn’t thought of that.

You can’t make this stuff up.

Coming soon to a supermarket near you: Baby Shark cereal.

I am so out of it.  I never heard of the song, Baby Shark, before seeing this story about Kellogg’s new cereal—aimed at toddlers.

The song, I gather, is adored by babies, less so by their parents, but never mind: it is expected to sell lots of cereal.

I searched for a Nutrition Facts label online, but could not find one (the cereal won’t be available until mid-September, apparently.

I did see this at the bottom corner of the box:

One and one-third cup of this stuff provides 150 calories, 190 mg of sodium, and 15 grams of sugars.  Oh great, 40% of calories from sugars.

Another sugary cereal for kids, this one for little kids!

Do food companies market directly to children?  Yes, they do.

I’ve been collecting items on sugars.  Here are the first two.  Two more will come later this week.

1.  The American Academy of Pediatrics Council on Nutrition has new guidance on sugars in schools.

Although access to junk foods remains an issue in schools, the Council blames the problem on students, parents, and staff.  It advises:

A positive emphasis on nutritional value, variety,appropriate portion, and encouragement for a steady improvement in quality will be a more effective approach for improving nutrition and health than simply advocating for the elimination of added sugars.

Really?  Evidence, please.

I ask because Kellogg could not be happier with this approach.  A little sugar, it says, may help kids eat more nutritious foods.

Surely it’s not a coincidence that one of the authors discloses receiving support from the National Dairy Council and the American Dairy Association, and the other receives support from the Nestle Nutrition Institute.

In any case, we aren’t talking about a little sugar in schools.  We are talking about candy, cupcakes, and drinks brought in for birthdays, treats, and after school celebrations.

2.  Sugar in the Trans Pacific Partnership (TPP)

This, you will of course recall, is the controversial multinational trade agreement currently under negotiation (see my previous post on this topic).

Japan wants to keep its tariff on sugar.

It now appears that the Japanese sugar industry gave a 1 million yen donation to a political group that supports Minister of Agriculture Koya Nishikawa, just before he became involved in the TPP talks in 2013.

As one commentator put it, considering Nishikawa’s central role in the TPP negotiations,

his receipt of a donation from an industry group brings his morals as a politician into question. Nishikawa stated that he returned the donation in light of his capacity as agricultural minister, but this is unlikely to resolve the situation…In March 2013, it was announced that the Japan Sugar Refiners’ Association would receive 1.3 billion yen in subsidies under a Ministry of Agriculture, Forestry and Fisheries’ project.

At the very least, this situation looks like blatant conflict of interest.

With apologies for how silly this question might sound, Whitney Kimball of Hopes&Fears asked, “Is breakfast the most important meal of the day?”

Here’s what I told her:

The question isn’t silly at all, although I always laugh when I hear it. That is because I am publicly outed as not a breakfast eater—at least not first thing in the morning. I don’t usually start getting hungry until 11 or so and rarely eat before then. Coffee, yes. Solid food, later please. The idea that early eating is essential makes perfect sense for farm laborers and small children. Whether it matters for normal, sedentary adults is a different question.

Many—if not most—studies demonstrating that breakfast eaters are healthier and manage weight better than non-breakfast eaters were sponsored by Kellogg or other breakfast cereal companies whose businesses depend on people believing that breakfast means ready-to-eat cereal.  Independently funded studies tend to show that any eating pattern can promote health if it provides vegetables and fruits, balances calories, and does not include much junk food. For most people, when you eat matters far less than how much you eat.  If you wake up starving, by all means eat an early breakfast. If not, eat when you are hungry and don’t worry about it.   Kids who won’t have access to decent food in school may well be better off fed breakfast at home and surely will learn better if their stomachs aren’t growling.

Can something like this be nutritionally revolutionary?

Kellogg has just launched this cereal with just 6 grams of sugars per serving—half of what’s in most other cereals aimed at kids.

It’s also lower in sodium, but everything else about it looks pretty much the same:

Will Kellogg put money behind this cereal and market it with the millions it spends to market Froot Loops?   Will it reduce the sugars in its other cereals?  Will other cereal companies do the same?

Or will Scooby Doo suffer the fate of Post’s no-added-sugar and otherwise unsweetened Alpha Bits introduced in around 2005?

Post put no money into marketing the cereal and dropped it after just a few months (Alpha Bits now has 6 grams of sugars per serving).

Let’s give Kellogg some credit for giving this a try.   I’ve looked for Scooby Doo in grocery stores but haven’t been able to find it.

I will watch its fate with great interest.

Update: Thanks to Cara for pointing out that with Scooby Doo, Kellogg adds a cereal to its portfolio that meets requirements of the WIC (USDA’s Women, Infants, and Children’s nutritional support program).  As Jessica, a Kellogg rep explains, “The benefit of this cereal is that it’s WIC eligible and boosts several vitamins and minerals, is low in fat, is a good source of fiber and vitamin D and an excellent source of iron.”

And thanks to an anonymous writer for pointing out that Scooby Doo is directly competing with General Mills’ Dora Explorer cereal for the lucrative WIC market, one that should amount to nearly $7 billion in 2013.  WIC specifies what the benefits can be used to buy.  Cereal companies want to be sure they are in that market.

Kellogg has had a bad year on the truth-in-advertising front.

First, It took the brunt of the furor over the late and unlamented Smart Choices fiasco, when the program’s first logo turned up on Froot Loops of all things and was attacked by the Connecticut attorney general.

Next, the IMMUNITY banner on Cocoa Krispies drew fire from the San Francisco city attorney’s office.

Both boxes are now collectors’ items.

Now, FoodNavigator-USA reports that Kellogg has taken another expensive beating, this time on its health claim for Mini-Wheats.

In 2009, Frosted Mini-Wheat boxes sported this health claim:  “Clinically shown to improve children’s attentiveness by nearly 20%.”

Of course this cereal can do that, especially when kids eating it are compared to kids who don’t eat any breakfast at all—which is what this study did.

But that’s not what the adorable television advertisements imply, as shown in exhibits A and B in the summary of the class-action decision.

Last April, Kellogg settled a dispute with the FTC over this claim.  The FTC did not argue that the claim was inherently absurd because of the lack of an appropriate control group for the study.  Instead, it took the study at face value and charged Kellogg with exaggerating the results because hardly any children—only 11%—improved attentiveness by 20% or more.

Kellogg has just settled a class-action suit over this claim that will cost the company $2.75 million in order to pay customers between $5 and $15 each in compensation.  The company also will give $5.5 million to charities.

Because of city and state attorneys and the FTC, the most egregious health claims are slowly disappearing from cereal boxes.     But lawsuits do not constitute policy.  What goes on the front of food packages is FDA territory.

FDA: Get to work!