Kellogg’s namesake brand is one of the world’s oldest but, this week, the cereal giant announced a relaunch of the 106-year-old label. The US group is operating in a tough domestic cereal market and it is facing challenges in Europe. Analysts have argued Kellogg is trying to breathe fresh life into a brand facing stiff competition, including increasingly from own label. Michelle Russell reports.
Kellogg may have been aiming to pack a punch this week with the revamp of its 106-year old eponymous brand.
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The rebrand, undertaken to “connect with the next generation of consumers”, will be launched in the US and Canada initially, before being rolled out globally.
The cereal maker has refreshed the packaging of its products with a more colourful, “contemporised” script logo and brighter visual graphics and images, alongside a revised tagline, ‘Let’s make today great’. A revamped website is also included as part of the package.
The revamp of the Kellogg’s brand comes after a tough year for the company. In 2011, underlying operating profit fell. The US cereal sector has faced a series of challenges and Kellogg endured difficult trading conditions in Europe, particularly the UK. 2012 has not proved much better, with profits from Kellogg’s European business down 20% in the first quarter.
“Kellogg has been underperforming in the UK and Europe,” Consumer Edge Research analyst Robert Dickerson tells just-food. “I think this move is a necessary, less-risky, pro-active approach to capture volume growth going forward versus a change in overall product selection. Will it work? I don’t know. It is just good to see that they’re trying.”
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By GlobalDataDickerson believes the revamp may be a result of volume declines in a number of Kellogg’s core products.
“If you’re not selling as many Corn Flakes as you were last year or five years ago then you can argue that, if you’ve had problems posting solid volume growth within your core products over time, then it would make sense that a company would be looking to revamp its branding.”
“If you’re having problems growing volumes in higher margin, iconic products for your business, it is in your best interest to be spending more money where necessary to improve your overall volume trajectory over the long term.”
Nonetheless, Dickerson believes the move by Kellogg to give its brand an overhaul is “a step in the right direction”. He adds: “If the rebranding doesn’t improve overall volume share for Kellogg then I would expect to see subsequent events occurring.”
In the UK, one of Kellogg’s major markets outside the US, Hamish Renton, managing director of consultancy Hamish Renton Associates, believes the revamp may also be some acknowledgement that own-label “is starting to hurt a little”.
“For me, the tagline, which is running that across everything from cereal bars to breakfast cereals etc, is Kellogg trying to inject a bit of personality and vibrancy into its products that you just don’t get from own-label,” he tells just-food.
“There are loads of great things you get from own-label, you get brilliant functional products, you get a good price, you get a lot of transparency – much more transparency on what is actually in the product on own-label on salt, fat and sugar content than you do on branded – but you don’t really get a great sense of personality. It just doesn’t happen.”
Emphasising its credentials as a “trusted Olympic brand”, Kellogg has used an image of Olympic US swimmer Rebecca Soni to front its revamped website. The brand is sponsor of the US Olympic and Paralympic teams.
Renton notes the timing of the revamp may have, to some extent, been influenced by the imminent London 2012 Olympic Games. “[Kellogg] is involved with the sponsorship of the Olympics so this is a great time to get it out and make some noise before the games. So, timing can partly be explained by the Olympics but something like this must have taken some time and planning.”
Kellogg has looked to lower the salt and sugar in some of its cereals but it has still faced criticism from health campaigners.
Dickerson believes the move to revamp the Kellogg’s brand can also be seen as an alternative to investing in and “risking” further reformulation in order to highlight health and nutrition credentials.
“The breakfast category is growing well, so if the overall food sector is trying to push for more freshness, more health and wellness, then it’s in your best interest to repackage and rebrand the same product and spend money doing that than it actually is to change your product. It’s easier to change the branding on products than it is to change the actual cornflake. It’s usually less risky and less costly to try and minorly change your branding and packaging than it is to change the overall construct of your manufacturing process.”
Renton says Kellogg may have been “a bit vulnerable” on nutrition and insists more work needs to be done, beyond these new marketing initiatives.
“There is still quite a lot of salt and too much sugar in a lot of their cereals, so for me, the weakness in their position is that this is a brilliant respray and is bound to make them appeal to their core market of females, but they are still flying in the face of some nutritional information. It is disappointing. As market leaders, you would expect them to lead in this field.”
When a brand as old and established as Kellogg’s looks to refresh its image, industry watchers and marketers sit up and take note. The company insists the brand has “tremendous resonance” with consumers but perhaps recent challenges in major markets, particularly in the West, has made it review how it sells itself.
Announcing the move earlier this week, Kim Miller, senior VP of global brands at the cereal group, talked of “refreshing” Kellogg’s “in ways consumers will continue to relate to”, a tacit acknowledgement that the brand needed an updated image. With competition from branded rivals and from own label, as well as increasing scrutiny of Kellogg’s healthy-eating credentials from ever-more savvy consumers, the company may yet have to more to work to do on its brand.
