Charmy Malem Principles of MarketingBSAT-III 2:30-4:00pm (T-Th)

Kellogg’s Cereals

The History of Breakfast Cereals

The first modern and commercial cereal foods were created by the American Seventh-day Adventists. The Adventists formed the Western Health Reform Institute in the 1860s. The Institute was later renamed the Battle Creek Sanitarium after its location in Battle Creek, Michigan. The Adventists manufactured, promoted, and sold wholesome cereals.

Cereal or grain is a member of the grass plant family, with starchy seeds used for food. Common cereals are: wheat, rice, rye, oats, barley, corn (maize), and sorghum.

Will Keith Kellogg was the founder of the W.K. Kellogg Foundation, founded in 1906. In 1894, Kellogg was trying to improve the diet of hospital patients. He was searching for a digestible bread substitute using the process of boiling wheat. Kellogg accidentally left a pot of boiled wheat to stand and the wheat became tempered (soften). When Kellogg rolled the tempered or softened wheat and let it dry, each grain of wheat emerged as a large thin flake. The flakes turned out to be a tasty cereal. Kellogg had invented corn flakes.

Reference: http://inventors.about.com/library/inventors/blcereal.htm

A Historical Overview

1900s

Will Keith (W.K.) Kellogg, was born April 7, 1860. W.K., along with his brother, Dr. John Harvey Kellogg, was the co-inventor of flaked cereal. Although W.K. lacked a formal education beyond the sixth grade, the cereal giant forever changed the way we eat breakfast. In 1906, W.K. Kellogg entered the cereal business, as American eating habits began shifting from heavy, fat-laden breakfasts to lighter, more grain-based meals. W.K. discovered that a better flake was produced by using only the corn grit or "sweet heart of the corn." To help consumers distinguish Kellogg's Corn Flakes® cereal from the products of the 42 other cereal companies in Battle Creek, Michigan, W.K. put his signature on each package, saying that these Corn Flakes are the "The Original." The company succeeded because it believed the entire populace, not just those on special diets, might be interested in wholesome cereal foods, and because it continually improved its product line and packaging techniques to meet the needs of an ever-changing and evolving consumer base.

1910s

With the advent of pasteurization of milk, the ready-to-eat cereal business expanded. To keep up with a growing market, Kellogg Company developed new product, packaging and marketing innovations to fit consumer needs. In 1914, Kellogg Company created Waxtite® wrappers, a new concept in packaging technology. W.K. Kellogg believed that if people tried a good product, they would keep buying it. To ensure that consumers would continue to seek out his products, he distributed free samples of his Corn Flakes, and then followed up with advertising in magazines and on billboards. Kellogg also held a children's art contest, selecting the best entries for use in Kellogg advertisements. The first Kellogg premium, the "Funny Jungleland Moving Picture Book," was distributed to consumers in 1910. Kellogg's® Bran Flakes and All Bran® cereals were introduced in 1915 and 1916. After having success in the U.S. market, Kellogg opened its first foreign cereal facility in 1914 in Canada.

1920s

Kellogg continued to expand into new markets, exporting cereal to England in the early 1920s and later building a plant in Sydney, Australia. In the U.S., Kellogg introduced ready-to-eat cereals in individual servings for use in hospitals, hotels and rail dining cars. The 1920s also brought new marketing innovations. A mail-in promotion made Battle Creek, Michigan a household word when millions of youngsters clipped and mailed in Kellogg's® boxtops for "Stuff-Yourself Nursery Rhyme Rag Dolls." Kellogg also established one of the first home economics departments in the food industry in 1923, the same year that Kellogg's® Pep™ wheat flakes was introduced. The famous Kellogg's® Rice Krispies® began talking to consumers in 1927.

1930s

W.K. Kellogg made an unprecedented move as the United States sank into the Great Depression. Instead of cutting back, he doubled his advertising spending - and Kellogg cereal sales increased. In response to the hard times created by the Depression, Mr. Kellogg reduced the hours of the three plant shifts and created a fourth shift, spreading the payroll among more workers. Others earned their paychecks by developing a 10-acre park on the Battle Creek plant grounds. Declaring "I'll invest my money in people," in 1930, Mr. Kellogg founded the W.K. Kellogg

Foundation. He also continued to invest resources into developing the nutritional quality of Kellogg's products. Kellogg expansion continued with a new plant in Manchester, England. Kellogg's® Pep™, became the first cereal fortified with vitamins through the "spray" method. Kellogg also brought new partnerships by sponsoring "The Singing Lady - Irene Wicker," the nation's first radio network program for children, and the "Howie Wing" radio show, based on the adventures of a young aviator. Adm. Richard E. Byrd's expedition to the South Pole was equipped with a two-year supply of Kellogg cereals.

1940s

In support of the American war effort during World War II, Kellogg provided packaged K-rations for the U.S. armed forces and Kellogg engineering personnel used the company machine shop to manufacture parts for the "Manhattan" atomic bomb project in 1945. As a result of the company's many efforts during WWII, Kellogg was awarded the Army-Navy "E" flag for excellence. Kellogg's® Rice Krispies® Marshmallow Treats ® recipe, first advertised in 1940, became a popular food for mailing to service people abroad. Despite the war, Kellogg launched new whole-grain product lines like Kellogg's Raisin Bran® in 1942 and opened the company's second U.S. plant in Nebraska.

1950s

On October 6, 1951, Kellogg Company's legendary founder, W.K. Kellogg, died at the age of 91. His body lay in state for three days in the main lobby of the company office building so that hundreds of workers and Battle Creek residents could pay their respects. Throughout the 1950s the company introduced some of today's most beloved cereals including: Kellogg's® Corn Pops®, Kellogg's Frosted Flakes®, Kellogg's® Honey Smacks™, Kellogg's® Cocoa Krispies™ and Kellogg's® Special K®, which was the first high-protein breakfast cereal ever offered to consumers. Cereal icon, Tony the Tiger® also made his first appearance in the 1950s and became an instant hit as the spokescharacter for Kellogg's Frosted Flakes®. In 1956, a Battle Creek tradition was started when more than 32,000 people sat down together at "the world's longest breakfast table" in Battle Creek, Michigan to celebrate the company's 50th anniversary. Renowned artist Norman Rockwell produced a series of illustrations for the company featuring

six children and Santa Claus. For Kellogg, the 1950s also meant national expansion into California and Tennessee, as well as internationally into Mexico and New Zealand.

1960s

For Kellogg Company, the 1960s were marked by a wide range of new product introductions. There were five new cereals: Kellogg's Froot Loops®, Kellogg's Apple Jacks®, Kellogg's Frosted Mini-Wheats®, Kellogg's Bran Buds® and Kellogg's Product 19®, as well as Kellogg's Pop-Tarts® toaster pastries and Kellogg's® Croutettes™ croutons. Kellogg's Product 19® was the first 100-percent fortified cereal created for consumers. Kellogg also enjoyed extensive global expansion, opening facilities in South America, Canada, Scandinavia, Europe and Asia. Kellogg even went into outer space, as part of the Apollo 11 space crew's breakfast during their historic mission to the moon in 1969. A growing interest in nutrition led to the expansion of the company's already broad consumer nutrition information programs.

1970s

Kellogg Company responded to America's renewed awareness of the importance of nutrition and fitness. The company published its nutrition policy, outlining its fortification practices and commitments to nutrition, responsible advertising and consumer education. Kellogg became the first cereal company to voluntarily list the amount of sugar in its cereals on the side panel of its packages. This was the strongest decade of growth in the history of ready-to-eat cereal consumption. New cereals included Kellogg's® Frosted Krispies® and Cracklin' Oat Bran®. Kellogg entered the frozen foods business when Fearn International and its line of Eggo® brand frozen waffles joined the company. Kellogg also acquired Mrs. Smith's Pie Company and Pure Packed Foods. Company expansion continued in Central America, Great Britain and Spain.

1980s

New cereal products of the 1980s including Kellogg's® Squares™ line, Kellogg's® Crispix® and Kellogg's® Just Right®, would remain consumer favorites into the next century. Science-based groups affirmed the importance of grain in the diet, enabling Kellogg to make health claims, particularly for high-fiber cereals such as Kellogg's® All-Bran®. The company built advanced-technology cereal plants in Battle Creek and London, Ontario. It also opened a new plant in South Korea and improved its manufacturing capabilities around the world. In 1986, Kellogg Company's new headquarters opened in downtown Battle Creek. True to its tradition of social responsibility, Kellogg strongly supported the United Negro College Fund, the Statue of Liberty-Ellis Island renewal and the fight against apartheid in South Africa.

1990s

In the 1990s, as consumers purchased "On the Go" foods like never before, convenience foods grew as a percentage of Kellogg's sales. Kellogg's® Rice Krispies Treats® squares and Kellogg's® Nutri-Grain® bars won broad consumer acceptance. Kellogg's® Pop-Tarts® toaster pastries became the company's top-selling product. In the cereal category, the 1990s were the company's most difficult decade, amid unprecedented branded and private-label competition in the U.S. and increased competition overseas. Still, Kellogg remained the global cereal leader and opened its first plants in India, China, Thailand and Latvia. A second Mexican plant was added thanks to very strong growth in that market. In 1997, Kellogg made a significant step forward in its food science research activities by opening the $75 million W.K. Kellogg Institute for Food and Nutrition Research in Battle Creek. In 1999, Kellogg acquired Worthington Foods, the top producer of soy-based meat alternatives.

2000s

Kellogg has generated strong upward momentum in the new century based on growing the dollar – rather than volume – sales of its cereal products, expanding its convenience foods business and pursuing profitable growth. After stabilizing in 2000, the Kellogg U.S. cereal dollar share began a multi-year rise. In 2001, Kellogg completed the largest acquisition in its history, the $4.56 billion purchase of Keebler Foods Company, a leading producer of cookies and crackers. Cereal, once Kellogg Company's only product line, now represented 53 percent of its worldwide sales, with 32 percent coming from snacks and the remaining 15 percent from other grain-based foods. Kellogg also has benefited from the acquisition of health foods leader Kashi Company, the multi-country success of products such as Kellogg's® Special K® Red Berries cereal and a relentless focus on superior day-to-day execution of its product development and marketing initiatives. In 2006, Kellogg Company celebrated its 100th Anniversary.

Reference: http://www.kellogghistory.com/history.html

Kellogg Company (often referred to as Kellogg or Kellogg's in its corporate logo, or even more formally as Kellogg's of Battle Creek), is a producer of cereal and convenience foods, including cookies, crackers, toaster pastries, cereal bars, fruit-flavored snacks, frozen waffles, and vegetarian foods. The company's brands include Corn Flakes, Keebler, Pop-Tarts, Eggo, Cheez-It, Nutri-Grain, Rice Krispies, BearNaked, Morningstar Farms, Famous Amos, Special K, All-Bran, Frosted Mini-Wheats, Club and Kashi. Kellogg products are manufactured in 18 countries and marketed in more than 180 countries around the world.

Its global headquarters are in Battle Creek, Michigan, USA. Its largest factory is Trafford Park in Manchester, UK which is Kellogg's European headquarters. Kellogg trades under the ticker symbol NYSE: K. The Kellogg Company also holds a Royal Warrant from HM Queen Elizabeth II and the Prince of Wales.

Kellogg's was founded as the Battle Creek Toasted Corn Flake Company on February 19, 1906, by Will Keith Kellogg as an outgrowth of his work with his brother John Harvey Kellogg at the Battle Creek Sanitarium following practices based on the Seventh-day Adventist Christian denomination. The company produced and marketed the hugely successful Kellogg's Toasted Corn Flakes and was renamed the Kellogg Company in 1922.

In 1930, the Kellogg Company announced that most of its factories would shift towards 30 hour work weeks, from the usual 40. This practice remained until World War II, and continued briefly

after the war, although some departments and factories remained locked into 30 hour work weeks until 1980.[4] From 1969 to 1977, Kellogg's acquired various small businesses including Salad Foods, Fearn International, Mrs. Smith's Pies, Eggo, and Pure Packed Foods;[5] however, it was later criticized for not diversifying further like General Mills and Quaker Oats were.

Kellogg Company headquarters

After underspending its competition in marketing and product development, Kellogg's U.S. market share hit a low 36.7% in 1983. A prominent Wall Street analyst called it "a fine company that's past its prime" and the cereal market was being regarded as "mature". Such comments invigorated Kellogg chairman William E. LaMothe to improve, which primarily involved approaching the demographic of 80 million baby boomers rather than marketing children-oriented cereals. In emphasizing cereal's convenience and nutritional value, Kellogg helped persuade U.S. consumers age 25 to 49 to eat 26% more cereal than people that age ate five years prior. The U.S. ready-to-eat cereal market, worth $3.7 billion at retail in 1983, totaled $5.4 billion by 1988, and had expanded three times as fast as the average grocery category. Kellogg's also introduced new products including Crispix, Raisin Squares, and Nutri-Grain Biscuits and reached out internationally with Just Right aimed at Australians and Genmai Flakes for Japan. During this time, the company maintained success over its top competitors: General Mills, who largely marketed children's cereals, and Post, who had difficulty in the adult cereal market.

In March 2001, Kellogg made its largest acquisition, the Keebler Company. Over the years it has also gone on to acquire Morningstar Farms and Kashi divisions or subsidiaries. Kellogg also owns the Bear Naked, Natural Touch, Cheez-It, Murray, Austin, Famous Amos, Gardenburger (acquired 2007) and Plantation brands

Corporate governance

Current members of Kellogg Company's board of directors include: James M. Jenness, chairman; David Mackay; Dr. Benjamin S. Carson, Sr.; John T. Dillon; Gordon Gund; Dorothy A. Johnson; Donald R. Knauss; Ann McLaughlin Korologos; Rogelio M. Rebolledo; Sterling K. Speirn; Robert A. Steele and Dr. John L. Zabriskie.

On January 24, 2005, the former CEO (since April 1999) and chairman of the board of directors (since April 2000), Carlos Gutierrez became U.S. Secretary of Commerce in the second term of former President George W. Bush. Kellogg's board of directors named James M. Jenness as chairman and CEO to replace Gutierrez.

On October 23, 2006, Kellogg's announced that president and chief operating officer David Mackay would become the chief executive officer, effective December 31, 2006. Jenness will continue to serve as chairman of the Board of Directors.[7]

In June 2007, Kellogg announced that by the end of 2008 it would stop advertising to children under twelve those cereals and snacks that do not meet specific nutrient guidelines.[8]

January 2, 2011, John A. Bryant succeeded David McKay (retired effective January 1, 2011) as CEO.

A list of cereal products produced by Kellogg's, with available varieties:

All-Bran: All-Bran Original, All-Bran Bran Buds, All-Bran Bran Flakes (UK), All-Bran Extra Fiber, All-Bran Guardian (Canada)

Apple Jacks Bran Buds Bran Flakes Cars 2 (2011) Choco Krispis (Latin America) Chocos (India, Europe) Cinnabon Coco Pops (Europe, Australia) Coco Pops Coco Rocks Coco Pops Mega Munchers Coco Pops Moons and Stars Cocoa Hoots Cocoa Krispies Corn Flakes Complete Wheat Bran Flakes/Bran Flakes Corn Pops Country Store Crispix Crunch: Caramel Nut Crunch, Cran-Vanilla Crunch, Toasted Honey Crunch Crunchy Nut Cornflakes Cruncheroos (current only available through food service sales and not retail) Disney cereals: Disney Hunny B's Honey-Graham, Disney Mickey's Magix, Disney Mud

& Bugs, Pirates of the Caribbean, Disney Princess Cereal Eggo Froot Loops: Froot Loops, Froot Loops 1/3 Less Sugar, Marshmallow Froot Loops Frosted Flakes (Frosties outside of the US/Canada): Kellogg's Frosted Flakes, Kellogg's

Frosted Flakes 1/3 Less Sugar, Tony's Cinnamon Krunchers Frosted Mini-Wheats (known in the UK as Toppas until the early 1990s, when the name

was changed to Frosted Wheats. The name Toppas is still applied to this product in other parts of Europe, as in Germany and Austria)

Fruit Harvest: Fruit Harvest Apple Cinnamon, Fruit Harvest Peach Strawberry, Fruit Harvest Strawberry Blueberry

Fruit 'n Fibre (not available in US; not related to the Post cereal of the same name sold in the US)

Fruit Winders (UK) Genmai Flakes (Japan) Guardian (Australia/NZ), Canada Honey Loops Honey Smacks (US)/Smacks (other markets)

Just Right: Just Right Original, Just Right Fruit & Nut, Just Right Just Grains, Just Right Tropical, Just Right Berry & Apple, Just Right Crunchy Blends – Cranberry, Almond & Sultana (Australia/NZ), Just Right Crunchy Blends – Apple, Date & Saltana (Australia/NZ)

Krave (UK) Komplete (Australia) Low-Fat Granola: Low-Fat Granola, Low-Fat Granola with Raisins Mini Swirlz Mini-Wheats: Mini-Wheats Frosted Original, Mini-Wheats Frosted Bite Size, Mini-

Wheats Frosted Maple & Brown Sugar, Mini-Wheats Raisin, Mini-Wheats Strawberry, Mini-Wheats Vanilla Creme, Mini-Wheats Strawberry Delight, Mini-Wheats Blackcurrent

Mueslix: Mueslix with Raisins, Dates & Almonds Nutri-Grain Nut Feast Oat Bran: Cracklin' Oat Bran Optivita Pops Raisin Bran/Sultana Bran: Raisin Bran, Raisin Bran Crunch, Sultana Bran

(Australia/NZ), Sultana Bran Crunch (Australia/NZ) Raisin Wheats Rice Krispies/Rice Bubbles: Rice Krispies, Rice Krispies Treats, Frosted Rice Krispies,

Cocoa Rice Krispies, Rice Bubbles, LCMs, Rice Crispies Multi-Grain Shapes Ricicles: Like Rice Krispies, but with the addition of a frosted sugar coating. Scooby-Doo cereal: Cinnamon Marshmallow Scooby-Doo! Cereal Smart Start: Smart Start, Smart Start Soy Protein Cereal Smorz Special K: Special K, Special K low carb lifestyle, Special K Red Berries, Special K

Vanilla Almond, Special K Honey & Almond (Australia), Special K Forest Berries (Australia), Special K Light Muesli Mixed Berries & Apple (Australia/NZ), Special K Light Muesli Peach & Mango flavour (Australia/NZ), Special K Dark Chocolate (Belgium), Special K Milk Chocolate (Belgium), Special K Sustain (UK)

Spider-Man cereal: Spider-Man Spidey-Berry SpongeBob SquarePants cereal Start UK Strawberry Pops (South Africa) Sustain: Sustain, Sustain Selection Variety Vector (Canada only) Yeast bites with honey Yogo's Kringelz,(formerly known as ZimZ!) mini cinnamon-flavored spirals, sold only in

Germany and Austria[9][10]

2010 Cereal Recall

On June 25, the company voluntarily began to recall about 28 million boxes of Apple Jacks, Corn Pops, Froot Loops and Honey Smacks because of an unusual smell and flavor from the packages' liners that could make people ill. Kellogg's said about 20 people complained about the cereals, including five who reported nausea and vomiting. Consumers reported the cereal smelled or tasted waxy or like metal or soap. Company spokeswoman J. Adaire Putnam said some described it as tasting stale. However, no serious health problems have been reported.

The suspected chemical that caused the illnesses was 2-methylnaphthalene, used in the cereal packaging process. Little is known about 2-methylnaphthalene's impact on human health as the Food and Drug Administration has no scientific data on its impact on humans, and the United States Environmental Protection Agency (EPA) also does not have health and safety data. This is despite the EPA having sought information on it from the chemical industry for 16 years. 2-Methylnaphthalene is a component of crude oil, and is "structurally related to naphthalene, an ingredient in mothballs and toilet-deodorant blocks" that the EPA considers a possible human carcinogen.[12][13]

Kellogg's offered consumers refunds in the meantime. Only products with the letters "KN" following the use-by date are included in the recall. The products were distributed throughout the U.S. and began arriving in stores in late March 2010. Products in Canada were not affected.

Discontinued cereals and foods

Kellogg provides an online list of discontinued products.

Banana Bubbles

A banana-flavoured variation of Rice Krispies. First appeared in the UK in 1995, but discontinued shortly thereafter.

Bart Simpson's No ProblemO's

Sold in the UK for a limited period

Bigg Mixx cereal C-3PO's cereal

Introduced in 1984 and inspired by the multi-lingual droid from Star Wars, the cereal called itself a "a New (crunchy) Force at Breakfast" and was composed of "twin rings phased together for two crunches in every double-O". In other words, they were shaped like the number 8.

Choco Corn Flakes - A chocolate version of Corn Flakes. First sold in the UK in 1998, but discontinued a few years later.

Cinnamon Crunch Crispix Cinnamon Mini-Buns Concentrate Complete Oat Bran Flakes Corn Soya cereal Coco Pops Crunchers Coco Pops Strawss Double Dip Crunch Frosted Krispies Golden Crackles Golden Oatmeal Crunch (later revised to Golden Crunch) Kenmei Rice Bran cereal Kream Krunch Krumbles cereal

Manufactured approximately from the 1920s to the 1950s; based on shreds of wheat but different from shredded wheat in texture. Unlike the latter, it tended to remain crisp in milk. In the Chicago area, Krumbles was available into the late 1960s. It was also high in fiber, although that attribute was not in vogue at the time.

Marshmallow Krispies (later revised to Fruity Marshmallow Krispies) Mr. T's Muscle Crunch (1983–1985) OKs cereal (early 1960s)

Oat-based cereal physically resembling the competing brand Cheerios, with half the OKs shaped like letter O's and the other half shaped like K's, but did not taste like Cheerios. OKs originally featured a Scottish bagpiper on the box; this was replaced by the more familiar Yogi Bear.

Pep

Best remembered as the sponsor of the Superman radio serial.

Pokémon Cereal

A limited edition cereal that contained marshmallow shapes in the forms of Gen I Pokémon Pikachu, Oddish, Poliwhirl and Ditto.

Powerpuff Girls Cereal Puffa Puffa Rice (late 1960s–early 1970s) Raisins Rice and Rye Razzle Dazzle Rice Krispies Stars/All-Stars cereal

Reference: http://en.wikipedia.org/wiki/Kellogg_Company

Kellogg’s Cereal Company

1.) Idea Generation

Kellogg was trying to improve the diet of hospital patients. He was searching for a digestible bread substitute using the process of boiling wheat. Kellogg accidentally left a pot of boiled wheat to stand and the wheat became tempered (soften). When Kellogg rolled the tempered or softened wheat and let it dry, each grain of wheat emerged as a large thin flake. The flakes turned out to be a tasty cereal. Kellogg had invented corn flakes.

2.) Product Screening

W.K. discovered that a better flake was produced by using only the corn grit or "sweet heart of the corn." To help consumers distinguish Kellogg's Corn Flakes® cereal from the products of the 42 other cereal companies in Battle Creek, Michigan, W.K. put his signature on each package, saying that these Corn Flakes are the "The Original." The company succeeded because it believed the entire populace, not just those on special diets, might be interested in wholesome cereal foods, and because it continually improved its product line and packaging techniques to meet the needs of an ever-changing and evolving consumer base. To ensure that consumers would continue to seek out his products, he distributed free samples of his Corn Flakes

3.) Concept Testing

They conceptualized the idea of making ready-to-eat cereals especially instant children-oriented cereals.

4.) Business Analysis

The business boomed in the cereal industry however Kellogg's U.S. market share hit a low 36.7% in 1983. A prominent Wall Street analyst called it "a fine company that's past its prime" and the cereal market was being regarded as "mature". Such comments invigorated Kellogg chairman William E. LaMothe to improve, which primarily involved approaching the demographic of 80 million baby boomers rather than marketing children-oriented cereals.

5.) Product Development

Kellogg Chairman approached cereals for baby boomers rather than marketing children-oriented cereals alone. Kellogg's also introduced new products including Crispix, Raisin Squares, and Nutri-Grain Biscuits and reached out internationally with Just Right aimed at Australians and Genmai Flakes for Japan.

6.) Test Marketing

They tested the new products to market. During this time, the company maintained success over its top competitors: General Mills, who largely marketed children's cereals, and Post, who had difficulty in the adult cereal market.

7.) Commercialization

Kellogg continued to expand into new markets, exporting cereal to England in the early 1920s and later building a plant in Sydney, Australia. In the U.S., Kellogg introduced ready-to-eat cereals in individual servings for use in hospitals, hotels and rail dining cars. The 1920s also brought new marketing innovations. The Company also uses advertising by the way of giving children free game inside the cereals. The game “Mission Nutrition” was characterized by their popular mascot Tony the Tiger. Different Nutrition Campaign was also introduced. Kellogg also has benefited from the acquisition of health foods leader Kashi Company, the multi-country success of products such as Kellogg's® Special K® Red Berries cereal and a relentless focus on superior day-to-day execution of its product development and marketing initiatives.