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)

The expanding world of Post

When we think about the major players in the cereal industry, most of the attention goes to Kellogg and General Mills, the world's largest cereal companies. Beyond that are several other players, such as Post and Quaker, but these seem to pale in comparison. Or do they?

Post, in particular, is a dark horse that is quietly and quickly gaining momentum to be more than an also-ran, third place contender. Historically, Post was right there from the beginning as a rival in Battle Creek with the Kellogg brothers. Over the years, however, Post lost its edge, falling behind in the pack. Things have begun to change in the last decade after several ownership shifts and reorganizations. This included a merger with Ralcorp (i.e. Ralston cereals) and the purchase of Malt-O-Meal. Previously, Nabisco was incorporated into the company as well. Other brands in the Post portfolio include Better Oats, Mom's Best Cereals, and Peace Cereals.

Last month, another major milestone for Post was achieved with the takeover of U.K. cereal giant, Weetabix. Weetabix itself (i.e. a wheat and malted barely cereal) is somewhat obscure for most Americans, but is an icon in Britain. The purchase by Post not only gives the company a greater foothold in the U.K. market, but gives Post some additional opportunities in the U.S. In addition to Weetabix itself, the Alpen and Barbara's brands are now Post's as well. Post CEO Robert Vitale has said that with this acquisition, "it’s the right time to bring all our cereal brands under one unit." (Source: Food Business News) All of this means that Post's brand matrix is stronger and more diverse than ever. If carefully managed, this could further bolster Post ahead in an already tight cereal market and race.

The company could truly be poised to "be first past the post" (pun intended)!

Post doubles down with MOM acquisition

As I get back into winter blogging mode, there is one big cereal story in particular that I must comment on. A couple of weeks ago number three cereal maker, Post, demonstrated that it is not only committed to solidifying its number 3 spot in the cereal industry, but is eyeing the future with growth definitely in mind. They have agreed to buy MOM Brands for $1.15 billion, adding the latter's successful bagged cereals and other varieties to its portfolio.

MOM (formerly Malt-O-Meal) has been a cereal disruptor with its focus on knock-off cereals sold in larger sizes, and often at a lower price than the mainstream boxed cereals. It will now be interesting to see how Post leverages the purchase, either through branding changes and/or manufacturing efficiencies.

Consolidation in the cereal industry is inevitable, especially now with the larger companies struggling to find an edge in a tight market.

(Source: Bloomberg)

Review: Post Honey Bunches of Oats - Greek Honey Crunch

I'm still working to review some of the many new cereals introduced earlier this year. While my intent is not to review every new cereal that comes out, some are noteworthy and deserve the attention. Such is the case with the new Greek yogurt flavored Honey Bunches of Oats. Honey Bunches of Oats has become Post's leading cereal franchise, now with 12 flavors. What makes this one stand out above the others is the way that the company is taking advantage of a current food fad, Greek yogurt, and capitalizing on it. The marketing for the cereal has been fairly heavy.

This is not the first cereal made with yogurt, but the first major brand utilizing the high-protein, low-sugar dairy Greek type. Additionally, this variety is comprised of two granolas made with real Greek yogurt, whole grain flakes and honey. So, how does it stack up as a breakfast cereal?

Let's start with taste. I believe that a big reason for Post's success with the Honey Bunches of Oats brand is the creative combination of ingredients that are big on flavor. This latest variety is no exception. Apart from the more standard ingredients like granola and flakes, the yogurt clusters do add a bright flavor to the mix when you bite into them. Along with the slight sweetness, it makes for a tasty breakfast. So far, in my opinion, it's the best tasting new cereal of the year.

Medley cereals can be a challenge when it comes to texture. While variety in the mouth can bring about a kaleidoscope of sensations, once exposed to milk things can go awry quickly, as is the case with Cheerios new medley. Greek Honey Crunch balances it all quite well. The cereal is easy to eat out of the box, and even after soaking for 5-10 minutes it is still worth eating, although the flakes start moving toward the end of their life.

Marketing has contributed to this being perceived as a unique, healthy cereal. Even the stylized lettering (which is barely Greek) on the box contributes to the experience that consumers will have as they chow down. Combined with the solid taste and texture, the overall experience is very positive.

Post is definitely emphasizing the nutritious values of Honey Bunches of Oats in general, and this Greek yogurt version in particular. The claims here are on 5g of protein and 33g of whole grains per serving. Not bad, but all is not perfect. First, I am surprised considering the high protein qualities of Greek yogurt that the numbers are not higher. Also, fat (3.5g) and sugar (22% of weight) contents are little higher than what I would desire in a highly nutritious cereal. Nevertheless, you really can't go too wrong offering this to your family.

As you can tell from the individual categories and ratings this is a well-crafted cereal and one that deserves the attention it is getting. My only question is whether it will be able to sustain popularity once people move onto the next health food fad. Nevertheless, it will contribute to the overall popularity and strength of Honey Bunches of Oats. That has to be good news for Post, which seems to be getting it together in recent years.

(Review protocol HERE)

Post goes Fit

Continuing to note new cereals for 2013, it looks like Post is really going at it. Since going independent in the last year it is evident that they are serious about getting back into the cereal game.

The latest example is with one of their stodgy old brands, Grape-Nuts. It has long been a minor player, usually hard-to-find on the top shelf of most stores, and chosen by only the real serious health food nuts. But, as part of Post's quest for new relevance, Grape-Nuts has been getting a make-over. The message now is that Grape Nuts is the perfect cereal to "meet the demands of the today's modern, active lifestyle." In addition to its original formula and flakes, they just introduced Grape-Nuts Fit, a vanilla-cranberry cereal to fuel active people. In some ways this is similar to Wheaties Fuel, but less testerone-focused; although with double the protein.

This is a strategy that just might work for them!

C is for Cereal

Recently I highlighted a number of new cereals that have hit the market in early 2013. Here's another one I just discovered that is worth noting:

Post has entered into a licensing agreement to produce a cereal targeted at toddlers using a Sesame Street theme. Not the first time the children's TV show characters have appeared on cereal, but Post is maximizing the marketing impact, especially by going after toddlers directly.

C is for Cereal is an apple flavored oat and corn cereal, and the shapes are X's and O's. The disappointment, however, is that there are actually no C's. A somewhat confusing message.

New Year, New Cereals!

Just when it appeared that things were pretty mundane in the cereal world, 2013 could be a turning point. With the new year just beginning a number of new cereals are appearing on store shelves. January has typically been a good time for new cereal introductions, but this is one of the biggest launches I've seen in years, and coming from three of the biggest companies. There are indications of at least half a dozen new cereals, but here some of the most noteworthy:

Kellogg has introduced Cinnamon Jacks, a variety in the new "Jacks" brand. There have been special editions of Apple Jacks over the years, but it appears now that Kellogg wants to build on that brand with new flavors. Could we see such things as Chocolate Jacks, Berry Jacks, etc.?









One other interesting Kellogg addition is new Mini-Wheats Crunch. Here too we have seen a number of extensions, but Crunch appears to be a direct competitor to Quaker Oatmeal Squares. Same look, and even a brown sugar flavor.










General Mills is throwing a new twist into Cheerios. New Honey Nut Cheerios Medley Crunch is the first time Cheerios will be mixed in with other cereal elements - not just O's any longer. Wheat flakes and almonds comprise the medley. [Feb 3/13 CORRECTION: It's actually not the first time. Four years ago they tried oat clusters. Medley Crunch is the first time flakes are in the mix].











Not be outdone, Post is making several additions to its most significant cereal brand, Honey Bunches of Oats, but the one that stands out is the new Greek variety. They are capitalizing on the recent Greek yogurt fad that is sweeping the nation. Yogurt in cereal is not new, but give Post credit for a strong marketing move.









Watch for these and more. Have you seen and/or tried any of these new cereals?

Some of these could be great candidates for Breakfast Bowl reviews in the near future!

"More" from Post

Recently in grocery stores large boxes of cereals are showing up promising "more". Good Morenings cereal is a new brand launched by Post that appears to be a major thrust since their move late last year to go public and independent. Good Morenings is bold on several fronts, mainly because it is actually six new cereals which come in large boxes (over 20 ounces) that stand out on the grocers shelves.

The six new varieties include some knock-offs like frosted flakes, berry loops, vanilla o's, and waffle crunch. But, there are also some innovative flavors like cocoa cinnamon crunch and strawberry and creme. The emphasis in this brand seems to be on value. They are priced well, and they want consumers to believe that they have good nutrition value too, packed with vitamins and minerals but lacking high fructose corn syrup (although their sugar content is on the high side).

In any case, this is an interesting move from Post, who desperately needs to reinvent itself. These cereals should stand out, although I haven't seen any formal marketing campaign yet. Post appears to be taking its future seriously, and this is a good example. In addition, they have also made some other changes with a revised logo and visual identity, plus the launch of postgoodness.com, an online social site that encourages consumers to share positive intentions for their day. All in all, Post may be on the right track.

Post goes independent (again)

Post, one of the original breakfast cereal brands, is once again facing new ownership, the fourth time in 26 years. But, instead of being taken over by another food conglomerate (as it was in the past by General Foods, Kraft, and most recently Ralcorp), Post will become an independent, public company. Ralcorp didn't have success with the brand and has decided to move on.

Post certainly is a well-known company, with some strong brands, but really nothing that has captivated the marketplace. As I've suggested previously, the middle of the cereal market is getting squeezed, and Post is a prime example of such a company struggling to enjoy success. The new company will embark on a new strategy, but organizational and functional changes may not be enough for Post to be the cereal powerhouse it once was.

(Source: stltoday.com)

Big and Small, no Middle?

Financial services company Credit Suisse, after analysis of the cereal industry, projected this week that the two leading cereal companies, Kellogg and General Mills, are expected to grow, mainly at the expense of Quaker Oats and Post. The latter companies "are facing structural challenges" that make them vulnerable to the much stronger corporations.

This seems to be an ongoing trend toward bifurcation, not only in the cereal industry but across a wide range of sectors. In other words, the future for cereal appears to be in the large corporations targeted in the mass market, and smaller, start-ups that can respond quickly to emerging trend and niches. The ones that will struggle are the companies in-between who do not have the same clout as the mega-companies or the innovation of the smaller ones. While Post (Ralcorp), Quaker, and Malt-O-Meal are all still in the game, within a shifting economy will they be able to find their place, not only in brand positioning but in their own financial sustainability?

I believe the next few years will reveal the answer.

(source: Barron's)

Technorati Tags: cereal, Kellogg, General+Mills, Post, Quaker, Malt-O-Meal, bifurcation, breakfastbowl

Fake ingredients

Several stories in the last couple of weeks have revealed that what you expect in your cereal is not always what you get.

Most notable is the revelation by "Health Ranger" Mike Adams that several foods purporting to contain blueberries actually do not contain actual, whole blueberries. For example, Kellogg's Frosted Mini Wheats really only contains "blueberry flavored crunchlets" made from sugar, soybean oil, red #40, and blue #2. General Mills' Total Blueberry Pomegranate cereal is a double whammy: apparently no actual blueberries or pomegranates. This has been getting considerable attention in the media and among health advocates, both attacking various food manufacturers and the FDA for having loose regulations that allow for the loopholes. This also does not help the already negative public relations that Kellogg and General Mills have received in recent years over their labeling practices and nutritional quality.

Competitors have been quick to point out that use actual blueberries. Me & Goji tweeted Thursday that "While the cereal giants use fake blueberries, ours are all natural from Bar Harbor, Maine". This is certainly an opportunity for the upstarts and natural cereal companies to differentiate themselves.

In a related story, Post recently released a press release highlighting the fact that they "say 'no' to fake fibers that are often found in so-called “healthy” competitive cereals", and that Post uses only whole grain fibers, not the highly processed, novel fibers that other companies use.

It's getting nasty out there, all playing on the growing health concerns of consumers.

Technorati Tags: cereal, blueberries, fiber, Kellogg, General+Mills, Post, breakfastbowl

Post joins the bandwagon

We've been noting the increasing trend for healthier cereals, especially among those targeted to children. General Mills and Kellogg have been making changes in this direction in recent years, but now Post has announced reduced sugar for its Fruity and Cocoa Pebbles cereals. But, notably absent, are Alpha Bits and Golden Crisp, the latter in particular a cereal with over 50% sugar. So, does this represent a true philosophical shift for Post, or is it merely a public relations move?

Technorati Tags: cereal, sugar, Post, breakfastbowl

Hulk Hogan sues Post

I missed this story from a few weeks ago, but it is one worth noting. Former wrestling star Hulk Hogan (real name: Terry Bollea) has launched a lawsuit against Post Foods because of a character the latter developed. "Hulk Boulder" has some likeness to Hogan and is used in a Stone Age-themed Cocoa Pebbles commercial with Fred Flintstone, Barney Rubble et al.

(Source: New York Times)

Technorati Tags: cereal, Hulk+Hogan, Post, lawsuits, breakfastbowl

Post builds on nostalgia

General Mills is not the only company taking advantage of cereal nostalgia right now. In a store I came across a new line of Post Toasties cereals that are actually being referred to as Post "Classics". (Will there be others?) Toasties was the name of Post's version of Corn Flakes, which was discontinued in 2006. The new Toasties, however, also come in Frosted Flakes, and wheat and barley O's varieties. This is not the first attempt for Post at tapping into nostalgia.

The new Toasties boxes are not truly vintage, but they do have the feel. Nevertheless, they are getting it right by going for the emotional attachment consumers have with cereal. Hopefully they will dig into their recipe archives even more.

By the way, on the topic of vintage cereals, be sure to visit the poll on our main page to indicate which cereals from the past you'd like to see.

Technorati Tags: cereal, Post, Toasties, breakfastbowl

Cereal and the economy

The recent downturn in the economy seems to be affecting almost every industry, not just banks and auto companies. Although food in general is a staple, a prolonged recession will have an impact on consumers' choices and buying habits. This will include cereal.

Recently the big three cereal companies (Kellogg, General Mills, and Ralcorp [Post]) have shown positive financial results. But this reflects the past, not necessarily the present or the future. The question is: Will consumers continue to purchase cereal as in the past when their personal finances are squeezed?

It appears that even the big companies question this. For example, Kellogg recently launched a campaign on their website promoting the "value of a Kellogg breakfast", which costs less than 50 cents a bowl, including the milk. Obviously they wan to prevent any changes in perception.

Nevertheless, the big winners in the coming months could be low-cost manufacturers like Malt-O-Meal, whose sales continue to rise. In the end people will likely to continue eating cereal, but will find their satisfaction in bulk sizes, knock-off recipes, or generic brands. This will also be an opportunity for innovators, but not on the high-end. Companies that can bring new value to the cereal aisle have much to gain.

We'll keep watching these developments.

Technorati Tags: cereal, economy, recession, Kellogg, Malt-O-Meal, breakfastbowl

New beginning for Post

As reported last fall, Kraft sold its Post cereal division to private-brand food maker, Ralcorp. It look likes the deal will close next week.

This should be watched closely for several reasons: First, it will be interesting to see how a private-label company responds to controlling a big brand like Post. Second, despite some recent advancements and its strong Honey Bunches of Oats line, Post has been a struggling cereal brand in the last decade or more. Can it be revived to a position of prominence again?

(See article in St. Louis Post-Dispatch)

Technorati Tags: cereal, Post, Ralcorp, breakfastbowl

Vintage Post

Vintage cereal boxes are not new (General Mills made some earlier this year). Now it's Post's turn.

I recently came across three of their cereals in vintage-looking boxes: Raisin Bran, Spoon-Size Shredded Wheat, and Grape Nuts. While not as authentic looking as what I've seen from General Mills and Kellogg, they are nonetheless fun, especially with the historical information on the back panels.

Nostalgia is a great way to sell cereal, as the morning breakfast bowl is deeply embedded in our culture and on our psyches. Cereal companies need to tap into this more.

Technorati Tags: cereal, Post, nostalgia, Raisin+Bran, Shredded+Wheat, Grape+Nuts, breakfastbowl

Alpha-Bits are back?

I have to admit, this one caught me off guard. Post has recently relaunched Alpha-Bits cereal. What surprised me is that I didn't even miss them. Apparently this class cereal brand was taken off the market in 2006.

According to Post, the new Alpha-Bits "is back with a great tasting formula that also has nutrients to support healthy brain development!" Must be so that they can spell better?

I can't speak for the cereal itself yet, but I like the new box!

Technorati Tags: cereal, Post, Alpha-Bits, breakfastbowl

A new angle

Sometimes all a cereal brand needs is a new angle.

A stalwart cereal in Canada (and several other countries) is Shreddies, a malt-flavored, whole-wheat square. Post, recognizing that a brand make-over was needed, last year obtained the services of Ogilvy Toronto to develop a creative marketing campaign centered around a fake relaunch of the cereal. Instead of Shreddies as squares, they are now diamonds. The result is new attention and energy for a cereal that had lost much of its luster from 30-40 years ago.

Some links worth noting:

Ogilvy Toronto's marketing of Shreddies

Globe and Mail story of a man who listed one of the "last square Shreddies" on ebay.

Technorati Tags: cereal, Canada, Shreddies, post, marketing, breakfastbowl

Digestion niche

Starting with the Kellogg Sanitarium over 140 years ago, cereal has been considered a health food. Certainly the highly sugared and artificial flavored versions of recent decades seems to contradict that, there has always been a strong contingent of cereals designed to promote health. High fiber cereals (such as All-Bran) and the recent marketing of cereals for weight loss (e.g. Special K) are but two examples.

Consistent with the popularity of yogurt, a relatively new twist in the cereal aisle has been the introduction of pre- and pro-biotic cereals.

In 2006, Kashi introduced Vive, the first pro-biotic cereal. "Pro" biotics are live lactobacillus bacteria that naturally assist digestion in the intestinal tract.

Within the last month Kraft has introduced a line of pre-biotic foods, including a cereal, under the Live-Active brand name. "Pre-biotics" are special fibers that enhance the proliferation of friendly probiotics.

The key point in all this is that focusing on health niches is a good strategy for cereal companies, especially when they can be innovators in the industry.

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Technorati Tags: cereal, bacteria, Kashi, Kraft, Post, nutrition, BreakfastBowl