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The End of Cereal? Kellogg and General Mills Sales Continue to Decline as America Eats Less of It



From NY Post:

More and more Americans are giving cereal the cold shoulder at breakfast — and that is leaving shareholders of Kellogg and General Mills a little soggy.

Kellogg, whose cereal line-up includes the Special K, Corn Flakes and Kashi brands, reported this week that sales of its morning meals unit slid 7.7 percent in the fourth quarter — after a 4.7 percent drop in the third quarter.

Soaked in this bad news, the shares are as soggy as day old Corn Flakes and are down 2.7 percent over the last six months.

Cereal2At General Mills, whose breakfast cupboard includes Wheaties, Cheerios and Lucky Charms, revenue from its cereal unit is down 7 percent in the six months ended Nov. 23. Investors in the Battle Creek, Mich., company are a little hungry after General Mills’ shares have fallen 1 percent in the last six months.

Both companies were caught flat-footed as Americans breakfast habits have evolved toward simple, more natural food selections — like Greek yogurt. Also, weight watchers, which for years focused on eating a low-fat breakfast cereal like Special K instead of toast, eggs and bacon, are now looking for foods that make them feel good.

Inside the two cereal makers, executives have finally acknowledged this change — but they appear ill-equipped to do anything about it.

Kellogg told its investors that it “continued to see weakness in Special K as it faces headwinds from evolving consumer trends regarding weight management.

It will try to change the “positioning of the brand from a focus on dieting to weight wellness,” it said in a regulatory filing.

As part of this plan, Kellogg will “stress the role that Special K plays in a healthy lifestyle.”

“We plan to reinvent all aspects of the brand in 2015, including innovation, packaging, advertising, and consumer promotions,” it said in the filing. “Each of these will highlight Special K’s position as part of a weight wellness program. New packaging and advertising will highlight the simplicity and goodness of the food, new consumer promotions will help consumers meet their goals, and innovation will directly appeal to consumer trends through Special K Protein, Special K Gluten Free, Special K Granola, and additional hot cereal offerings.”

Still, Kellogg on Thursday reduced its 2015 revenue forecast to a gain of 1 percent to 3 percent — down from an earlier forecast of 3 percent to 4 percent growth.





Precooked cereal costs too much. Go make some old-fashioned oatmeal or non-instant grits or buckwheat or Cream of Wheat or something real.


I agree, it costs too much and it doesn't fill me up. If I have cereal I'm hungry again an hour later. A bowl of oatmeal with nuts and fruit keeps me going til lunchtime.


Costs too much, isn't filling, and it's loaded with 50 tons of sugar. No thanks. There's this wonderful invention called a breakfast sandwich. Couple slices of toast, a few pieces of bacon, some sausage, a couple eggs scrambled, and a slice of cheddar cheese. Filling, fast, delicious, and inexpensive, because I'm not going to eat the whole box to feel full.

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