Wednesday, January 10, 2018

The new world of cereal mashups

One of the big stories right now in the cereal world, first reported back in November, is General Mills' introduction of Frosted Flakes Lucky Charms in the past few weeks. This new product has captured the imagination of many cereal lovers, bringing together two of the most loved tastes.

On the surface, this appears to be a major win for General Mills, hitting their rival Kellogg right in the jugular, going after big K's GRRREAT brand. Fortunately, for imitators, Frosted Flakes is not a registered trademark, but General Mills did not stop with just the name - they also tried to copy the feel of Tony's cereal by going with a blue-themed box and an all caps, white typeface.

But, despite the marketing coup, is this cereal really that special? It's just Frosted Flakes with marshmallows, or Lucky Charms with flakes, depending on how you look at it. Apart from the intrigue of this combination, it is unlikely that it will persist. Even most of the reviews I've seen have been far from enthusiastic for the taste.

What is really significant here is the way that this mashup represents a new level in the battle among cereal companies and for the wallets of consumers. This is no ordinary new variation, but the leverage of two hot brands to create a new super product. This may be a way for cereal companies to generate new interest in cereal, tapping into existing emotions and creating creative recipes based on familiar tastes. Many people mix their own cereals anyway - now it could be done for them!

What mashups would you like to see?

Sunday, December 31, 2017

2017 Cereal Year in Review: The Great Quest

As we come to the end of 2017, it is a good time to reflect on the past year, the key stories in the cereal world, and the overall themes we observe. It has been a busy year for those of us captivated by our favorite breakfast food, as cereal companies are trying hard to regain their foothold in an industry that is losing ground among consumers, especially younger generations.

Of course, most noticeable to almost everyone, lots of new cereals were introduced. This year, however, there seemed to be more than ever and the pace of introductions appears to be accelerating. Predictably, there was the typical round of special edition cereals brought out seasonally, such as fall and the holidays. And, numerous line extensions, with new varieties of core brands, like Cheerios. Most interesting, however, was the launch of cereals connected with already strong brands. Post reintroduced Oreo O's after a decade hiatus, and followed up with similar concepts such as Honey Maid S'mores, Chips Ahoy and Nutter Butter. Also, notable for this past were the reintroduction of Classic Trix, and Kellogg's recent partnership with Nintendo to bring us Super Mario.

Behind all the new cereals and marketing initiatives, the real story for 2017 is the quest of cereal companies to turn around the long-standing downward trend in sales, which, as reported by Food Business News, continued with another 2.3% decline compared to the previous year. Post, however, seems to be bucking the trend, eeking out a 0.14% increase. As we come to the end of the year, signs are that things may be turning around, with a late report, last week indicating that General Mills had a 7% U.S. cereal net sales increase, with Lucky Charms, Cocoa Puffs, Cinnamon Toast Crunch and Reese's Puffs showing the biggest increases.

While it is far too early to tell if these glimmers of hope are part of an industry reversal, at minimum, they reveal that the frantic efforts of the big cereal companies may be paying off, if even only for the short term. The significant number of new cereals introduced in 2017 indicates that cereal companies are trying hard, not giving up on yet on this multi-billion dollar food sector. As I have indicated previously, much of what they are trying to do is to throw stuff at the wall to see what sticks. In this way, they hope to find something that will be the breakthrough they so desperately need. Kellogg's recent announcement of a Unicorn cereal coming in the spring of 2018 may be the best metaphor of the ongoing quest for the elusive goal facing the cereal industry.

So, what's ahead for 2018? From what has already been announced, it is evident that the flood of new cereals will continue. These should, at least, keep consumers somewhat engaged, with the ongoing hope that the silver bullet will be found. Innovation remains the key for manufacturers, but eventually someone has to come up with something that will shake up the industry.

If I were to go out on a limb, I would like to believe that this next year will see further advancements in cereal restaurants, and that the big players will use experiential locations to generate new excitement and interest in cereal outside of the traditional retail channels, and in environments that they can better control. Kellogg has already a jump on the others in the U.S., just having opened their permanent location in New York City, but there is so much more room for experimentation and creativity in this space.

Regardless, pull up a bowl of your favorite cereal, and watch with anticipation for what lies ahead.

Happy New Year!

Saturday, December 16, 2017

Searching for unicorns

Unicorns have always been an object of fantasy. The mythical creatures are highly desired, but so far impossible to find.

Cereal companies, desperate to return to the good old days of cereal dominance, are in a similar quest for a seemingly equally elusive prize. As we have seen over and over, they keep trying by launching new products. In recent months this has evident in new cereals coming from General Mills and Kellogg. And, just this week Post got attention with the announcement of two new cookie-branded cereals: Chips Ahoy and Nutter Butter.

And, now, fitting to the unicorn metaphor, Kellogg has announced that in the U.S. this spring they will be introducing a limited edition Unicorn cereal, a revised take on a Froot Loop variant they recently released in the U.K. The new cereal is billed as being cupcake flavored, and should definitely attract the attention of children and others fascinated with unicorns.

There's an additional element to this story. While the new Unicorn cereal will not be in stores until March, their announcement ties in with the launch of another big Kellogg happening this week, the opening of their larger, permanent Kellogg's NYC cereal restaurant (a development we reported on this summer)  If you are in New York you can try the new cereal there now.

As we come close to the start of a New Year, it is typical for new cereals to be introduced. Will one of them be the true unicorn that will fulfill the fantasy of cereal executives and fanatics all at the same time? We keep hoping. 

Tuesday, December 12, 2017

General Mills looking for love

Maybe it's not big news, but in these challenging times for cereal companies, attempts to turn the tide are at minimum interesting. Last week General Mills unveiled a new (or at least updated) logo, the sixth in almost 90 years. Changing the corporate logo by itself is hardly going to really impact cereal sales, but it is a sign of how the company sees itself, and how it wants others to see it.

At first glance, the changes might not be apparent. The big "G," which has been at the core of the company's identity remains. But, added to that is a bright red heart, all accompanied by a new tagline, "Making Food People Love." 

Obviously, the slight modification is a direct, albeit subtle, attempt to tug at consumers' emotions, humanizing a large, global corporation. But, in the end, not much has really changed. I doubt, for example, that most people will even consciously notice the change. Branding and logo expert, Armin Vit, minimized the significance of the change, saying that "a heart, coming from one of the biggest companies in the world, feels so inauthentic. Even if they mean it — and I’m sure they do — it’s like, no, just be a money-making company and leave all of our collective feelings at the door."

I guess the test will be if more love finds it way to General Mills.

Sunday, December 10, 2017

Kellogg's sweet dilemma

One of the major problems facing the cereal industry today is the perception that many breakfast cereals contain far too much processed sugar. This has irritated health professionals, concerned parents, and nutrition conscious people in general who are increasingly turning to other morning food options. For years the big companies have been feeling the heat, and in response have modified their recipes to utilize less sugar, salt, and artificial ingredients; and, in turn, increase the use of fiber-rich whole grains.

Yet, despite the efforts of Kellogg, General Mills, and others to reduce sugar, the transition to more healthful cereals is not at all simple. Kellogg discovered this recently when they announced radical changes for cereals that are targeted to children in the United Kingdom. For example, they stated that Coco Pops will see a 40% reduction in sugar, and 20% less in Rice Krispies. Ricicles (called Frosted Rice Krispies in the U.S.) will be discontinued altogether. Frosties (Frosted Flakes in North America) will not be changed, however, will no longer be marketed to children.

On the surface, this all sounds good, but there is much more to the story here. First, it is important to note that Kellogg UK is really late to the game. We have known for quite some time that despite the reformulations that have taken place in the U.S., this was not happening to the same degree in Great Britain. Cereals there have generally contained 30% more sugar than their U.S. counterparts. So, across the pond they have been resisting this change, but obviously realize that they can no longer do so. These latest moves are nutritionally sound, but do demonstrate that companies like Kellogg are not as committed to nutrition as they would like you to believe. Ultimately, instead of doing the right thing, they wait as long as possible until there is enough pressure forcing them to do so.

The reason for this reluctance is the fact that even though many want them to change, there is a large group of consumers who do not want their beloved cereals to be tampered with. In Britain, for example, there has been an outcry from those who do not want Ricicles to leave the market. Companies understand this, as was seen in the recent move by General Mills to go back to their less healthy, artificially-enhanced Trix formula. Even Kellogg UK recognizes this, as it is unwilling to meddle with Frosties, one of their best-sellers. This means making compromises, even as some critics call them out for their hypocrisy, believing that claims to no longer target children are ineffective and hypocritical.

In other words, reducing sugar and otherwise making popular cereal brands healthier is not as easy as it appears. Cereal companies are feeling lots of pressure from all sides, and realize that finding the right balance is difficult in a challenging market.

Wednesday, December 06, 2017

The real significance of new Super Mario Cereal

The Internet was abuzz within the past couple of weeks with the news that Kellogg was partnering with Nintendo to launch a new, limited edition Super Mario Cereal that will be available by December 11th. This is far more than just another cereal with marshmallows, but one that is associated with a prominent video game adored by many consumers. On these facts alone, it is easily one of the most "fun" new cereals to launch in quite some time.

That all makes sense, so the hoopla is not unexpected. Of course, this isn't the first video game-themed cereal (think Donkey Kong in 1982, Pac-Man in 1983, and a 1988 Nintendo Cereal System brand also featuring Super Mario, along with Zelda). But, what makes this latest Nintendo branded cereal really stand out is the fact that the box can actually become part of the electronic gaming experience.

Built into every box are NFC (near-field communication) tags that be detected by the new Nintendo Switch game controllers, which is similar to how Nintendo's "amiibo" figurines can also be linked up. When the controller and the box are in contact, users receive virtual gold coins or hearts as power-ups during the game. In other words, this cereal is more than just a promotional item - it also functions as an accessory.

Nintendo has been regaining cachet within the video gaming world with their new Switch system, and this tie in with cereal will certainly add to their growing brand capital. But, this should also be a boost to Kellogg as well. Interestingly, however, the Kellogg's logo is not found on the box cover, so being downplayed many consumers might not even realize this comes from the Battle Creek company. Nonetheless, in addition to the sales of cereal, this could be a tremendous learning experience for Kellogg on how to partner effectively with other strong brands.

I have long advocated that there are many opportunities for more co-branding between cereal companies and non-food entities. Obviously, this is not new, but this latest Kellogg-Nintendo partnership suggests that it could be taken to a much higher level. We've seen movies, TV shows and sports heavily linked over the years, but what about clothing, cars, music, travel, causes, etc.?

All this might be just what is needed to get people eating out of their bowls regularly every morning.

(Image: Nintendo)


Sunday, November 26, 2017

What's the deal with granola?


When thinking about breakfast cereal, most of the attention is directed to the highly-processed cereals coming from the mainstream cereal companies. These are highly marketed, and get the most shelf space in the grocery store. Yet, often the grandfather of cereals, granola, seems to be missing in the discussion.

Granola is still a thing. In fact, go down any cereal aisle and you are likely to see a plethora of granola varieties, although they are usually in their own section, away from the boxed cereals that take up most of the space. Obviously, people are still eating granola, and we even see the big companies buying up granola startups and instilling innovation in the category, as with Kellogg's Bear Naked brand.

Granola goes back to the late 19th century, and came out of the same cereal-based health craze that also brought us corn flakes and the modern cereal industry. Granola gained new life back in the 1960's health food movement, although, interestingly, despite its whole ingredients, often contains as much or more sugar than many conventional cereals. Compared to other cereals, however, granola stands out as unique because it is typically based on oat flakes, and is mixed with a wide range of other ingredients, such as nuts, dried fruits, and sweeteners like honey. It is fairly easy for almost anyone to make themselves, and to this day many people still do that. Granola has its roots in the United States, and has similarities to its Europen cousin, muesli, although the latter is not baked or sweetened.

One of the main reasons for granola's continued prominence is its versatility. It can be eaten with milk, but is also easily blended with yogurt, and is a much more interesting snack food than conventional cereal. Granola can also be used as a topping on desserts, and made into other forms, such as the ever popular granola bars.

All this to say: granola remains a big part of the cereal equation, even though its significance is often underestimated. There is probably room for growth in this sector if companies are able to find unique selling points. The problem, however, is that granola faces the same challenges as other cereals. There are way too many brands, and not enough innovation. Sure, some claim to be organic, all natural, or with unusual ingredients, but it is hard to really stand out. Ultimately, this side of the grocery aisle is getting just as crowded, and suffers from the same problems confronting the entire industry.

Do you eat granola? Why or why not? I'd love to hear your thoughts. 

Tuesday, November 14, 2017

Cereal companies desperate to see what sticks

Although its hard to quantify, it certainly seems that 2017 could be one of the most prolific years ever (or at least in recent history) for new cereal introductions. A quick review of this year, reveals a plethora of new cereal brands and varieties, ranging from the usual infusion of new Cheerios to the reintroduction of classic Trix to the countless recipes brought out by smaller players. There are, in fact, so many new cereals coming out now that The Breakfast Bowl does not even bother to report on most of them, unless they stand out as truly unique or innovative. Quite frankly, most of the new cereals are quite boring and even predictable.

Why the recent surge in cereal introductions? In short, it's because cereal companies are desperate to find some new magic bullet that will help turn around overall slumping sales. The hope, of course, is that they will stumble across a brand or flavor that will go viral and boost sales revenues. So, they keep throwing stuff against the wall to see what sticks.

For consumers, and especially true cereal enthusiasts, this can be a fun time. The abundance of options fights against the boredom that has been growing for this food category. Sadly, however, many of these new products will never catch on, and will quickly disappear from the grocers' shelves, never to be tasted again.

Yet, there's more to come. Typically, the beginning of a new year, which is just around the corner, sees a number of cereal launches. We just came across one of these. A video from midwest grocer County Market shows a taste test of some supposed new cereals coming from General Mills in early 2018: Lucky Charms Frosted Flakes, Peach Cheerios, and a new flavored shredded wheat product called Shreds in peanut butter chocolate and Cinnamon Toast Crunch varieties. And, we are very likely to see Kellogg and Post pull out all stops as well with some great introductions.

What has been your favorite new cereal of 2017? What are you hoping for in 2018?

Monday, October 30, 2017

Kellogg cleans up Corn Pops controversy

At a time when cereal companies are struggling to retain (let alone increase) market share, the last thing they need is bad publicity. Yet, this is what happened to Kellogg last week, when sharp-eyed, morning cereal box readers noticed something unusual on the back of their Corn Pops. The back panel of the box featured a cartoon with many Corn Pops characters, and standing out was one with a darker, brown complexion portrayed as a janitor. Quickly Twitter lit up as people took offense to the racial insensitivity of the artwork, seemingly playing on a stereotype that this is the type of work done by people of color. Embarrassed by the controversy, the company quickly responded on Twitter saying that "Kellogg is committed to diversity & inclusion. We did not intend to offend – we apologize. The artwork is updated & will be in stores soon."

The response was rapid and appropriate, but it really makes one wonder how something like this could get out to market as it did. Hopefully, a lesson learned.

(BTW, if you can find one, pick up one of these boxes. Recalled cereal boxes typically have significant value in the future).


Sunday, October 15, 2017

Is Post's lawsuit in the bag?

The cereal industry is struggling, and you know that desperation is in the air when lawsuits start flying. This is what happened just a few weeks ago when Post Consumer Brands sued General Mills for patent infringement of its bagged cereal displays.

Bagged cereals have become a big hit for Post, which now owns MOM, the maker of Malt-O-Meal cereals, most of which are brand-name knock-offs sold in large bags. Consumers have gravitated to these cereals because they are cheaper. And price is a big driver in the grocery aisle. General Mills, recognizing MOM's success, and probably frustrated by the attempts to copy some of their big names, decided to get in the game themselves, but with their genuine cereals sold in bags. The issue here is not the bags themselves, but the way they are merchandised. The suit claims that General Mills is using a "copycat merchandising system that imitates Post's innovative divider and merchandising system for bagged cereals." As you can see from the image here, included in the lawsuit, the presentation on the shelves is almost identical, pitting the big-name branded cereals against the cheaper imitations.

Imitation is sometimes considered the sincerest form of flattery, but in this case Post wants to protect something that is working for them. If the lawsuit is won, this would change the shelf displays, but I doubt that the bags themselves are going away anytime soon. We'll watch with interest.

(Source: Minneapolis StarTribune)