Sunday, February 25, 2018

Copy if you're Lucky

There are more exciting things to report on here than every time a cereal manufacturer changes a color, shape or marshmallow. That happens all the time, and for the most part is just gimmickry.

So, last week's official announcement that Lucky Charms would be introducing a permanent, new marshmallow in the shape of a unicorn immediately generated an eye roll from me. This followed another announcement less than two weeks earlier that the hourglass marshmallow would be discontinued. Big news, huh?

Normally this would be overlooked (despite the fact that some people actually care about this), but there appears to be something else going on here. This is the second time in the last few months that General Mills is stealing a page from the Kellogg playbook and incorporating it into Lucky Charms. This seems to be more than just coincidence.

Late last year we reported on the new Kellogg's Unicorn cereal that is coming out this March. With all the hype over unicorns lately, we should not be surprised that General Mills wants into the action as well, hence the new marshmallow and new boxes highlighting a unicorn!

And, of course, there was the other Kellogg moment at General Mills when they recently introduced Frosted Flakes Lucky Charms, blue box and all, playing off of Kellogg's successful Frosted Flakes cereal.

They say that imitation is the sincerest form of flattery, but it makes me wonder if General Mills has given up on true innovation, and now is just reacting to whatever other good ideas they see out there?

Monday, February 19, 2018

The art of box redesigns

I have long argued that the box has been the most important aspect when it comes to breakfast cereal. No other food has been sold more on the basis of its packaging than with cereal, and the designs and characters found on cereal boxes have had a profound effect on our psyches and the larger culture.

Over the years we have seen every cereal brand update its boxes with fresh designs and artwork; however, most of the time the changes are incremental, providing more of an evolution than a true transformation. It is recognized that boxes have to keep up with the times (and competition), keeping consumers engaged.

So, while change is a constant, two recent prominent cereal box redesigns have caught my attention. Very recently, actually in the last few days, I came across a fresh new look for Kellogg's Froot Loops. Up to this point, most of the heavily sugared, "fun" cereals have been cartoonish, touting largely flat designs and solid colors. This latest edition is bold and energizing, placing emphasis on the mascot (i.e. Toucan Sam) and not on the cereal name, and giving him a much more realistic 3-D look. Even the bowl of cereal is different than what is typical, showing a side view of a glass bowl, jumping with excitement. I'm assuming we'll see many other Kellogg cereals adopt this style, and that should really make them pop on the shelves. Good job, Kellogg!

Another redesign has also recently been noted. This time it is not one of the big brands, but a smaller company that focuses on organic, health food cereals. Canadian-based Nature's Path is the leading independent brand in this segment, and has carved out a significant presence in most grocery stores across North America. Obviously, they are going for a different look than Froot Loops, focusing on natural ingredients and messaging that reinforces their health orientation. With the changes they have announced, they are moving away from a more serious look to one that is somewhat less stuffy. This is accomplished with new layouts, stronger colors and more irreverent typeface. While in an interview with Packaging Design they gush over the changes, I'm not convinced the new boxes are all that they could be. In many ways, the new design is too busy, distracting from the serious cereals that Nature's Path is selling. The company also has a sub-brand, Envirokidz, targeted to children. These boxes are getting a new look as well, and these seem a much better fit.

Again, these are just two examples of many box redesigns we have seen over the years. But, they illustrate the challenge that companies have in doing this. It is certainly not as easy as it seems, and the ultimate tests will be consumer reaction and sales. Having said that, however, very few of these design changes really make a big difference, as most companies are much too timid to try something truly "out of the box." There are some exceptions, however. Two of the best cereal box transformations that I have seen in recent years come from Kellogg-owned Kashi and Britain's Good Grain. Kashi went super simple focusing on a super-enlarged cereal piece on each white-spaced box, giving a distinct appearance. Good Grain demonstrated how to move away from a conventional cereal box also with greater simplicity, and pronounced color schemes.

Changing cereal boxes is not by itself going to turn the tide of declining sales, but if cereal companies want to revitalize this industry, one important strategy is to focus more on the box, and the messages these important vehicles send to consumers looking for something interesting.

Friday, February 16, 2018

Are cereal companies waving the white flag?

We all know that breakfast cereal is gradually losing its appeal among consumers. Sure, a large proportion of the population still enjoy a bowl most mornings, but increasingly, consumers are turning to other options. This is not new, and the big cereal companies, mainly General Mills and Kellogg, have long felt the trend first-hand, prompting them to diversify their brand portfolios to include a wide range of other food products, ranging from yogurt to cookies to meat alternatives.

Last week, during Kellogg's quarterly earnings call, we not only saw further evidence of this diversification, but a blatant admission that the future might not be centered around cereal. According to Food Industry News, CEO Stephen A. Cahillane said, "you shouldn’t look at U.S. Morning Foods and say this is going to be the growth engine for the Kellogg Co." Despite all their efforts, net sales for breakfast foods fell another 5%. Cahillane did state that they have to do more. In fact, he owned up to the fact that "getting people excited about it is our job to do. And we can do better in brand building in the United States."

Again, these trends are no surprise, but stating outright that breakfast foods (i.e. mainly cereal) are not the growth engine for Kellogg is evidence that the company is already looking past cereal, to greater opportunities in other food sectors. Callihane confessed that they are moving "from primarily a cereal business to much more of an innovative snacking business." Certainly, this does not mean they are abandoning cereal at this time, as it still is their core, but it does suggest they may be resigned to allow it to shrink while focusing on areas which they believe have greater potential.

It appears that the white flags may be reluctantly coming up, and that in the process the big cereal companies will no longer drive true cereal innovation.