New products and offering consumers more value are key to fighting the growth of private label in the UK, cereal giant Kellogg claimed today (19 June).
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The Coco Pops-to-Corn Flakes maker insisted at a briefing in London that its continued investment in product innovation and promotions was helping the business prosper during the downturn.
However, Kellogg acknowledged that the use of private-label lines by UK retailers could have an impact on sales. Private-label products currently account for around 18% of cereal sales in UK supermarkets, according to Kellogg estimates.
“Private label is an element that the trade have in their armoury that’s very relevant to consumers,” UK sales director Mike Taylor said.
However, the company insisted its strategy could help withstand a trend that it claims has been more driven by retailers than by consumer demand.
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By GlobalData“Companies that continue to invest in the recession will be the successful ones,” Kellogg UK marketing director Kevin Brennan said. “[Private label] has been very much driven by retailer visibility rather than consumers swaying to it.”
Kellogg’s moves to offer more to cash-strapped consumers include introducing a 1kg box of Corn Flakes and using “value splashes” on boxes of Coco Pops, Brennan explained.
Kellogg has launched a series of products in the UK in recent months, including Special K Oats & Honey, Crunchy Nut Bites and Nature’s Pleasure, the group’s first move into the muesli category.
Outlining Kellogg’s success in product innovation, Brennan said Oats & Honey had gained “one share point” since its launch, while Crunch Nut Bites had helped drive the 45% jump in sales seen by the Crunchy Nut brand.
“There are a lot of myths out there that suggest consumers are more cautious about trying new products. Actually, we don’t find that at all,” he said.
Nature’s Pleasure baked muesli, which Kellogg launched in February, has been supported by a GBP3m marketing campaign, including appearances at ‘foodie’ events in the UK. Brennan acknowledged the entry into a new category for the business was a bold move.
“Our bravest decision was to launch a completely new product in a segment where we didn’t really play,” Brennan said. The product is currently being rolled out to UK multiples.
