Kellogg’s Moves Ahead of General Mills in Cereal

May 14, 2002

Kellogg Co.’s nearly two-year-old plan to build U.S. cereal sales is finally paying off, reports The company has reasserted its category lead during a recent three-month period with a strategy that puts ad spending and innovation behind a handful of brands with the most growth potential.

Information Resources Inc. data show that Kellogg’s cereal sales totaled $541 million compared to General Mills’ Big G’s $523 million for the 12-week period ended March 24. Sales of heavily advertised Special K and Smart Start brands rose 22 percent and 72 percent, respectively. Kellogg’s recent first-quarter earnings show a nine-percent dollar sales growth and two percent volume growth in U.S. cereals. Credit Suisse First Boston analyst Dave Nelson attributes the growth to the fact “the company is simply executing better in new product innovation, advertising and marketing.”

Moderator Comment: What are the relative strengths and weaknesses of (any or all) the top RTE cereal manufacturers, Kellogg’s, General Mills and Post? [George
Anderson – Moderator

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