Editor's viewpoint: Kellogg yields to yoghurt
Kellogg could not afford to be absent from the yoghurt fixture
After seeing the boom in yoghurt sales in the US chip away at demand for breakfast cereal, Kellogg has accepted it needs a piece of the action.
The Special K giant has joined forces with Danone to launch a product containing cereal and yoghurt in the US.
The YoCrunch Cereal Bowl includes various Kellogg cereal lines - from Frosted Flakes to Froot Loops - and yoghurt, both conventional and Greek-style.
Breakfast cereal is still big business in the US. However, swathes of the category have appeared in almost secular decline as consumers have increasingly sought healthier or more convenient alternatives, put down their cereal bowl and picked up a breakfast biscuit or yoghurt cup.
For all that, executives at the likes of Kellogg and General Mills have been vocal in their confidence about the prospects for breakfast cereal, pointing to the value they say a bowl of cereal offers consumers.
And, speaking to Wall Street analysts earlier this month, Kellogg president and CEO John Bryant also sought to emphasise the health credentials of cereal. He highlighted protein, a key factor in consumer demand for yoghurt - and, notably, for Greek yoghurt, which has driven the growth in the category.
Bryant said Kellogg would look to advertise the "benefit of protein that comes with cereal and milk". He said: "We believe that absolutely resonates with consumers. It's actually a surprise to consumers that when you look at the protein that's in, say, a bowl of Mini-Wheats and milk, that's there's as much protein there as in many yoghurts."
However, in the past, Bryant has acknowledged cereal has been "losing people" to a range of categories, including yoghurt. And, in that same conference call on 1 May, Bryant perhaps gave a hint of the tie-up with Danone. "Rather than think about cereal going up against yogurt, it's also worth remembering that cereal is actually a complement to yogurt and that a lot of people add cereal to their yogurt as well," he said.
Two weeks later, the launch of the YoCrunch Cereal Bowl is announced, giving consumers the chance to buy a portion of yoghurt and Kellogg cereal in one go.
In hindsight, it seems an obvious move, given consumers often eat the two together anyway. Should we expect similar moves from the likes of General Mills of Post Holdings? General Mills has dabbled in the area, offering a Yoplait line topped with Nature Valley granola pieces but it would be wise to look at a more substantive development, especially given its presence in yoghurt and cereal.
Ok, so the pressures on breakfast cereal in the US do not just come from yoghurt. They come from toast, eggs, peanut butter and so on.
However, the boom in yoghurt is one of the most eye-catching phenomenons to have occured in recent years in the US grocery scene. Breakfast cereal manufacturers, for all their insistence that their products stood up against yoghurt on value or health, could not afford to ignore it any longer.
Kellogg Company - Strategy and SWOT Report, is a source of comprehensive company data and information. The report covers the company’s structure, operation, SWOT analysis, product and service offering...
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