The Kellogg Company advertising & marketing assignments

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It's quite a leap from breakfast cereal to cheese crackers and vegetarian sausages, but food giant Kellogg's has worked hard to adapt to a changing marketplace over the past 30 years. Its core market of breakfast cereals first came under attack in the 1990s from both competitors and consumers, forcing the group to acknowledge that it had been outflanked in the fiercely contested US market by General Mills. Careful attention to core brands and a barrage of high quality, premium priced cereal variants helped Kellogg's regain its leading position but a bigger problem has been the steady global decline in sales of its traditional breakfast cereals, from a high of $6.7bn in 2011 to $5.0bn for 2019. That decline prompted the group to broaden its portfolio with a range of snacks and convenience foods. The most notable add-on was Pringles, acquired from P&G in 2012. Other significant purchases included protein-based Rxbar and Bear Naked natural snacks. However most of the group's Keebler cookies business was sold in 2019 to Ferrero. Kellogg's kept only a few leading brands such as Cheez-It crackers. Despite the shift towards snacks Kellogg's retains a huge breakfast cereal business, with some 40 brands and variants. Key brands include Special K, All-Bran, Frosted Flakes (known as Frosties or Zucaritas in some markets), Mini-Wheats, Froot Loops, Rice Krispies, Coco Pops (or Choco Krispies), Crunchy Nut and Corn Flakes. Kashi is a more specialist natural cereal brand in the US, partnered in some international markets by WK Kellogg organic and vegan cereals. Several brands have also been extended into cereal bar snacks along with Nutri-Grain. In the US, especially, the group also has a collection of other breakfast items such as Pop-Tarts, Eggo waffles and Morningstar Farms frozen vegetarian meals. Group sales for 2019 were up only very slightly to $13.6bn, reflecting the sale of most of Keebler, but net income fell sharply to $960m despite the sale of Keebler. (Despite a sale price of $1.3bn in cash, Kellogg's net gain from the sale was just $38m). Snacks now account for the largest proportion of group sales: $6.7bn in 2019. Steven Cahillane is CEO.

Capsule checked 15th January 2021

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Recent stories from Adbrands Update:

Adbrands Update 21st Jun 2022: In a split reminiscent of the break-up of the old Kraft empire into Mondelez and Kraft Foods Group, Kellogg's announced plans to break itself up into three separate entities by the end of 2023. Kellogg's will spin out its cereal business in North America as one standalone entity, and its plant-based products such as Morningstar Foods as another. International cereal, global snacks and crackers and frozen brands (including Eggo) will remain in the core company, which will represent around 80% of the current group by revenues, or $11.4bn. The North American cereal division had sales of around $2.4bn and plant-based foods just $340m. Neither of the smaller units is likely to remain independent for long, with a private equity or trade buyer likely to come calling, even before the stated 2023 deadline.

Adbrands Daily Update 19th Aug 2019: Kellogg's announced the appointment of Zenith as its media agency for Australia & New Zealand, ending a 35-year relationship with Mindshare. However, the appointment has been surrounded by a certain amount of controversy. Neither Interpublic nor Omnicom agreed to participate in the review, and Mindshare declined the opportunity to defend the business. The reason was identified earlier this summer by Initiative CEO Mat Baxter, who told the Mumbrella 360 conference in June, "Just in this market, right now, there is a pitch going on for a consumer packaged goods client. The mandatory requirement to participate in that pitch: you've got to agree to 120-day payment terms and, if you don't, you're out. And I want to call out publicly Omnicom['s], PHD, who took a stand with us on not participating in that pitch. The really good agencies have got to start saying no." That 120-day payment arguably takes the demands placed by clients on media agencies to a new level. However, Kellogg's themselves said Baxter's comments misrepresented the process, though they also did not deny the stated terms.

Adbrands Daily Update 2nd Apr 2019: In another big push into the US, Ferrero sealed a $1.3bn deal to acquire the Keebler cookies division of Kellogg Company. Brands changing hands include Keebler, Mother's, Famous Amos and Murray's, as well as cookies manufactured for Girl Scouts of the USA.  The deal also includes the company's Fruit Twistables fruit snacks, pie crusts, and ice cream cones businesses, as well as several production facilities across the US. Combined sales were around $900m. Kellogg's is holding on to Pringles, Cheez-It and its protein and cereal-based bars.

Adbrands Social Media 23rd Jan 2019: "What's Your Perfect Bowl?". There's nothing particularly out of the ordinary in J Walter Thompson's latest campaign for Kellogg's in Australia, but its warmth and lightness of touch take it a cut above your usual cereal ad. The casting in particular is first-rate. Unusually for a TV ad, JWT hired specialist casting agent Lucky Price, best-known for his work on long-running local reality show 'The Block', to find real-life cereal fans for the campaign. "To have the opportunity to apply a television approach to casting an advertising campaign is really exciting," said Price. "From bikers to baristas, school teachers to surfers, you name it, we saw it. The quality of our submissions was incredible, and the final cast was whittled down from almost seven thousand respondents." That diligence pays dividends in the final film. Interesting to see some of the different pack branding Down Under too. "Rice Bubbles"?

Adbrands Weekly Update 15th Feb 2018: Kellogg's is continuing to wrestle with steep declines in its core business of breakfast cereals. Sales in the US Morning Foods division fell 5% year-on-year, while Keebler, Pringles and other snacks were down 4%. Combined revenues slipped below $13bn for the first time since 2010 to $12.92bn. The decline would have been even greater without a lift from Brazil's Parati Group, acquired mid-year. However attributable net income continued to rise, almost doubling to $1.30bn as a result of lower costs and expenses and a one-off $400m pension plan adjustment. Without exceptional items, the increase in operating profit was around 8% year-on-year.

Adbrands Weekly Update 12th October 2017: Kellogg's new CEO Steven Cahillane got off to a quick start, signing off on a deal to acquire niche protein bar manufacturer Rxbar for an astronomical $600m, around six times this year's revenues. Traditional food companies are facing an alarming slump in sales of their established brands as a result of surging consumer demand in more exotic, healthful fare. Rxbar is made with all-natural ingredients, and no added sugar, gluten, soy or dairy.

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