On this snowy and cold North Carolina Friday, I wanted to point out a story in Bloomberg Business about the rise and fall of Kellogg, the top cereal-producing company in the U.S.
As we’ve noted in our own study of the cereal market, the industry has bottomed out as consumers have, ironically, found healthier and more convenient ways to eat breakfast.
I say ironic because when W.K. Kellogg first founded his company, it was to give consumers a healthier and more convenient alternative to the leftover meats they were eating in the early 1900s. Now, with Kellogg’s top-selling cereal being Frosted Flakes, the cereals are less healthy and convenient than simply grabbing a yogurt or breakfast bar on the way out the door.
What is interesting about the Bloomberg article, which tells the inside story of Kellogg cereals, is how much Kellogg has lost its way as a brand. You see, brands aren’t just marketing endeavors. They are also the compasses that direct everything you do, from product development to marketing to what you stand for (and who your customer represents).
In Kellogg’s case, it went so far into the unhealthy, sugar cereals that it got on the wrong side of history. It didn’t help that it tried to enter the health market by buying Kashi – then transforming the brand into Kashi Chocolate Almond Butter cookies and even Kashi frozen pizzas.
Talk about not understanding the brand.
But the problems of the cereal companies are larger than how to handle its individual brands. What Kellogg and its competitors (such as General Mills, which has had tremendous success with its Cheerios brand) need to consider is what they should own.
Right now, they own that spot where dying brands like Radio Shack, Blockbuster and others were several years ago. They look archaic and completely out of step.
What they should own is breakfast. We’ve seen a few attempts at it, as referenced in our study. But with each passing day, fast food restaurants and other outlets are owning that daypart and no cereal company is going to out-product its way out of the dilemma.
If one of those cereal companies wants to know how to turn around its fortunes, call me.