Wednesday, June 18, 2014

General Mills and numbers

Cereal companies continue to look for an edge in today's competitive market. This means finding a way to stand out among the countless varieties of cereals on the grocers shelf. Recently, we've seen some creative innovation among some upstarts, but the big companies sometime appear a little more desperate.

A good example of some puzzling attempts comes from General Mills. Like all the big companies they've been trying to figure out how to have consistent revenue growth from cereal. It hasn't helped that they've recently had some public relations disasters which have not helped their cause. Their latest tactic is go for the nutrition conscious consumers, knowing that many are looking for cereals with more protein and less carbs. So, they recently introduced some protein-rich varieties of certain cereals, most notably Cheerios Protein, in two flavors, Oats & Honey and Cinnamon Almond. There are others as well, including a Fiber One Protein cereal.

It sounds good, except for one thing. In order to achieve this perception of high protein they've been less than forthcoming. They tout the fact that Cheerios Protein contains 11g of protein per serving with milk. That's all fine and dandy, but when you look a little closer at the numbers it's not as impressive as it might appear. First, that number does include milk. Factor that out (because you will probably use milk regardless whatever cereal you eat) and you are left with 7g of protein per serving. Still not shabby, but again somewhat misleading. A careful look at the Nutrition Facts reveals that these calculations are based on a 55g serving. What is interesting to note is that original, regular Cheerios have 3g of protein per serving. Obviously the new Protein variety has much more. Right? Not so quick. Regular Cheerios is based on a 28g serving, half the size. So, if you compare by equal weight measurements the actual difference is far less impressive, probably closer to a 1g margin. Looking at the Fiber One Protein cereal comparison with its original counterpart, the same game is being played.

To be fair, General Mills is truthful, both implicitly and explicitly. Cheerios Protein does have more protein, but the problem is that it's really not that significant. Oat-based cereals are already higher in protein than most cereals, so considering the real advantage of this new product this whole thing appears to be nothing more than a marketing gimmick. Consumers who don't take the time to read the labels or who are not well-versed in nutrition might be left with an impression that is well overstated.

It is shenanigans like this that is turning off many consumers to the mainline cereal brands. If General Mills wants to strengthen their market share a good place to start might be with less hype and a higher degree of honesty and transparency.

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