Saturday, November 22, 2014

What do consumers want?

As cereal companies struggle to find the product and marketing strategy that will bring success, it often feels like they are throwing Jell-O at the wall to see what sticks: New products, new flavors and varieties, re-designed packaging, niche targeting, etc. Unfortunately, these seldom bring breakthroughs.

At the beginning of this year General Mills thought that non-GMO (genetically modified organisms) ingredients in Cheerios and Grape Nuts would attract consumers who had to choose between many different brands (including generic knock-offs) in the grocery store aisle. Naturally they would pick the non-GMO cereals and see General Mills as a trusted, safe brand. Right? Not so quick.

According to an AP report not long after the change, there is no evidence that sales of General Mills' GMO-free cereals have increased. While it could be argued that it is the right thing to do, and certainly many consumer advocates have praised the decision, the bottom line is that most people simply do not care. A couple of months ago, General Mills' shareholders reinforced this view by casting a vote 98% against a proposal to remove all GMO's from the company's products.

The point is that making a move like this is not the answer to the downturn in cereal sales. Consumers are not easily impressed with all these marketing maneuvers. For the small minority that are committed to eating non-GMO foods Cheerios might now be an option, but the reality is these individuals are likely buying other cereals from a brand with a stronger, more consistent health focus. Perhaps General Mills is already understanding this, as is reflected in their recent purchase of Annie's.

Again, it's innovation that is going to turn around the cereal industry. Hopefully this recent experiment at General Mills will reinforce the fact that grasping at straws rarely works.

No comments: