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TheBigMarketing.com

Kellogg’s Marketing Strategy 2024: A Case Study

Kellogg’s, founded in 1906 by Will Keith Kellogg, is a global leader in the production of cereal and convenience foods. With products available in over 180 countries, Kellogg’s marketing strategy plays a crucial role in shaping its market presence and consumer engagement. This case study will delve into the various aspects of Kellogg’s marketing strategy for 2024 and highlight the key techniques and objectives employed by the company.

Key Takeaways:

• Kellogg’s Marketing Strategy encompasses various advertising techniques to promote its brand and products.
• Digital marketing plays a vital role in Kellogg’s overall marketing plan.
• Kellogg’s focuses on conducting thorough market research and competitive analysis to stay ahead in the industry.
• The company targets a specific audience and tailors its marketing campaigns accordingly.
• Kellogg’s marketing objectives revolve around brand promotion, increasing market share, and driving consumer engagement.

Understanding Kellogg’s Marketing Strategic Planning

When it comes to executing a successful marketing strategy, Kellogg’s has consistently demonstrated its expertise and effectiveness. In this section, we will delve into the intricacies of Kellogg’s marketing strategic planning and explore the factors that shape their decision-making process. Through real-life case studies, we can gain valuable insights into Kellogg’s marketing strategy and the key principles they employ to achieve their goals.

The Role of Marketing Strategic Planning at Kellogg’s

Kellogg’s understands the importance of strategic planning in guiding their marketing initiatives. Intensive research, data analysis, and market insights drive their decision-making process. Through careful evaluation and identification of opportunities and challenges, Kellogg’s develops comprehensive marketing strategies that align with their business objectives.

Factors Influencing Kellogg’s Marketing Strategy

Kellogg’s marketing strategy is influenced by a multitude of factors. These include market trends , consumer preferences, competitive analysis, and technological advancements. By closely monitoring and analyzing these factors, Kellogg’s ensures their marketing strategies remain relevant, innovative, and impactful in an ever-evolving marketplace.

Insights from Case Studies

Examining real-life case studies provides us with valuable insights into Kellogg’s marketing strategic planning. By analyzing the challenges they faced, the strategies they implemented, and the outcomes they achieved, we can gain a deeper understanding of Kellogg’s decision-making process and the factors that contribute to their marketing success .

Through these case studies and the analysis of their marketing strategic planning, we can uncover valuable lessons and apply them to our own marketing strategies. Kellogg’s serves as an excellent example of how meticulous planning, adaptability, and innovation can drive marketing success.

Launch of Kellogg’s India and Initial Challenges

Kellogg’s, a global leader in the production of cereal and convenience foods, made its foray into the Indian market with a massive investment from the parent brand. However, the company faced significant challenges during the initial phase, including a decline in sales and struggles to establish a foothold in the market. This section delves into the factors that contributed to these setbacks and analyzes the marketing challenges faced by Kellogg’s in India.

Product Launch

The launch of Kellogg’s in India aimed to introduce the brand’s globally recognized breakfast cereals to the Indian consumers. With a diverse range of products catering to different tastes and preferences, Kellogg’s intended to capture a significant share of the Indian breakfast cereal market.

Marketing Challenges

Despite its strong brand reputation, Kellogg’s encountered various marketing challenges in the Indian market. One of the notable difficulties was the lack of awareness and familiarity among Indian consumers regarding the concept of breakfast cereals. This required Kellogg’s to educate the target audience about the nutritional value and convenience of their products.

Additionally, Kellogg’s faced competition from local players offering traditional Indian breakfast options like poha, upma, and parathas. Adapting to the Indian palate and preferences posed another challenge for Kellogg’s to appeal to the taste buds of the Indian consumers.

The pricing strategy was also a crucial aspect that contributed to the marketing challenges faced by Kellogg’s in India. The premium pricing of Kellogg’s products in comparison to traditional breakfast options made it difficult to convince price-sensitive Indian consumers to switch to cereals.

Sales Decline

Kellogg’s experienced a noticeable decline in sales during the initial phase of its operations in India. The combination of lack of awareness, competition from traditional breakfast options, and pricing challenges resulted in sluggish sales growth.

The sales decline further intensified the struggle for Kellogg’s to establish a strong presence and gain a considerable market share in India’s highly competitive breakfast cereal market.

To overcome these challenges and turn the tide, Kellogg’s needed to formulate effective marketing strategies and adapt its approach to suit the Indian market dynamics.

Analyzing Kellogg’s Mistakes and Learnings

Kellogg’s initial entry into the Indian market was marked by a series of mistakes that hindered its success. These mistakes encompassed overlooking cultural aspects, misinterpreting consumer behavior, and implementing a premium pricing policy. In order to understand the impact of these missteps, let’s analyze each one in detail:

1. Overlooking Cultural Aspects

One of Kellogg’s key mistakes was disregarding the cultural nuances and dietary preferences of Indian consumers. The company failed to recognize that breakfast in India often includes savory and homemade options, rather than the sweet and packaged cereals that Kellogg’s specializes in. This oversight resulted in a disconnection between Kellogg’s offerings and the local food culture.

2. Misunderstanding Consumer Behavior

Kellogg’s also stumbled in accurately comprehending Indian consumer behavior. The company assumed that replicating its successful marketing strategies from Western markets would suffice. However, Indian consumers have distinct preferences and buying habits, which required a tailored approach. Kellogg’s initial advertisements failed to resonate with Indian consumers, leading to a lack of brand recall and inefficient marketing spend.

3. Adopting a Premium Pricing Policy

Kellogg’s decision to position its cereals as a premium product in India further compounded its challenges. The pricing strategy created a perception that Kellogg’s products were luxurious and inaccessible for the average Indian consumer. As a result, affordability became a deterrent, curtailing the brand’s potential market penetration.

These mistakes highlight the importance of understanding cultural aspects and consumer behavior when entering a new market. However, Kellogg’s was quick to recognize and rectify these errors, and the learnings from these experiences contributed to their subsequent success in India. By adapting their strategies to align with Indian preferences and introducing localized variants, Kellogg’s was able to overcome these initial setbacks.

Key Learnings

Kellogg’s experience in India serves as a valuable lesson for companies venturing into new markets. It underscores the importance of conducting thorough market research, adapting to local cultural nuances, and tailoring marketing strategies to suit consumer behavior. By analyzing their mistakes and implementing effective solutions, Kellogg’s was able to overcome initial challenges and establish a strong foothold in the Indian market.

Stay tuned for the next section where we will explore the revival of Kellogg’s image and its subsequent success in India.

Reviving Kellogg’s Image and Success in India

To revive its image and regain market share, Kellogg’s implemented a strategic shift in its target audience and introduced new products tailored to the Indian market. By exploring innovative marketing strategies and embracing Indianization, Kellogg’s successfully revived its image and achieved significant sales growth in India.

Target Change: Appealing to Children

Kellogg’s recognized the need to adapt to the preferences and demands of the Indian market. Instead of solely targeting parents, the company shifted its focus to appeal directly to children, recognizing their influence in the purchasing decisions of cereals. Understanding the importance of brand loyalty established during childhood, Kellogg’s developed marketing campaigns that resonated with young consumers, leveraging characters, storytelling, and appealing packaging.

New Product Launches: Chocos and Frosties

Part of Kellogg’s strategy to revive its image in India involved introducing new products that catered to the Indian palate. Two iconic offerings, Chocos and Frosties, were specifically developed and launched in the Indian market. These cereals took into account local flavor preferences, incorporating traditional Indian flavors and ingredients while maintaining the nutritional value and quality that Kellogg’s is known for.

Indianization: Adapting to Local Culture

Recognizing the significance of cultural sensitivity, Kellogg’s incorporated Indianization into its marketing strategy. By adapting its offerings to align with local tastes and traditions, the company established a deeper connection with consumers in India. Additionally, Kellogg’s engaged in localized advertising campaigns, collaborating with local influencers and celebrities to enhance brand visibility and resonate with Indian consumers.

The revival of Kellogg’s image and success in India serves as a testament to the power of targeted marketing strategies and understanding the nuances of the local market. By shifting its target audience, launching new products, and embracing Indianization, Kellogg’s not only revived its brand but also achieved significant sales growth, solidifying its position in the Indian market.

Kellogg’s Market Segmentation and Promotion Mix

Kellogg’s understands the importance of market segmentation in effectively catering to diverse customer segments. By dividing the market into distinct groups, Kellogg’s can tailor its products and marketing efforts to meet the unique needs and preferences of each segment.

Tasty Start

Under the Tasty Start category, Kellogg’s offers a range of delicious and nutritious breakfast options. These products are designed to provide a delicious start to the day while fulfilling the nutritional requirements of the consumers. With flavors that appeal to a wide range of tastes, Kellogg’s Tasty Start options are a favorite among breakfast enthusiasts.

Shape Management

Kellogg’s Shape Management products are specifically developed for consumers who prioritize maintaining a healthy weight and following a balanced diet. These offerings provide a convenient and satisfying way to manage portion control, making it easier for individuals to make better dietary choices without compromising on taste.

Mum Approved

Kellogg’s recognizes the critical role that mothers play in making purchasing decisions for their families. To cater to this segment, Kellogg’s offers a range of products that are convenient, nutritious, and come with the seal of approval from moms. These products provide assurance to mothers that they are making the right choices for their loved ones.

Kid Preferred

Kellogg’s understands the importance of appealing to children, who often have unique preferences when it comes to breakfast options. The Kid Preferred product line incorporates fun and exciting flavors and characters that resonate with children, making breakfast a delightful and enjoyable experience.

Inner Health

Kellogg’s Inner Health line is designed to promote overall well-being and support consumers in maintaining a healthy lifestyle. These products focus on incorporating ingredients that provide essential nutrients, vitamins, and minerals to support consumers’ inner health needs.

Competitors Analysis in the Breakfast Cereal Industry

Kellogg’s operates in a highly competitive breakfast cereal industry, where it faces various players vying for market share. Two prominent competitors of Kellogg’s in this industry are Pepsico’s Quaker Oats and Nestle Corn Flakes. To gain a deeper understanding of Kellogg’s competitive landscape, let’s analyze the key factors and insights.

When comparing Kellogg’s with Pepsico’s Quaker Oats, we observe that both brands have a wide range of cereal products catering to different consumer preferences. However, Kellogg’s emphasizes its strong brand reputation and heritage, while Quaker Oats focuses on promoting its health benefits and oats-based offerings.

In terms of market presence, Kellogg’s has a more extensive global footprint than Quaker Oats, with products available in over 180 countries. Quaker Oats, on the other hand, primarily concentrates on the North American market.

Moving on to Nestle Corn Flakes, we find that it also competes directly with Kellogg’s in the breakfast cereal segment. However, Nestle Corn Flakes differentiates itself through its Swiss heritage and commitment to producing quality food products.

Looking at the market share, Kellogg’s currently holds a significant portion of the breakfast cereal market, maintaining its position as a leader in the industry. However, Pepsico’s Quaker Oats and Nestle Corn Flakes continue to pose a challenge with their strong brand presence and diverse product offerings.

In conclusion, Kellogg’s faces tough competition from Pepsico’s Quaker Oats and Nestle Corn Flakes in the breakfast cereal industry. Despite being a leader in the market, Kellogg’s needs to continuously innovate and adapt its marketing strategies to maintain its competitive edge.

Competitive Analysis Overview:

Current scenario and market share of kellogg’s.

The breakfast cereal industry in India is currently experiencing steady growth, with an impressive annual growth rate of 20%. Kellogg’s, the global leader in cereal production, has established a dominant position in this industry, capturing a significant market share of approximately 70%. With sales reaching Rs. 500 crore, Kellogg’s has firmly solidified its presence in the Indian breakfast cereal market.

To gain a better understanding of Kellogg’s market share and the current scenario, let’s take a closer look at the data:

This data clearly reflects Kellogg’s dominance in the breakfast cereal industry in India. With an extensive range of products and a strong marketing strategy, Kellogg’s has successfully captured the attention and loyalty of consumers, thereby securing a sizable market share. As the industry continues to grow, Kellogg’s remains well-positioned to capitalize on the increasing demand for breakfast cereals in India.

Key Insights from Kellogg’s Marketing Case Study

The Kellogg’s marketing case study provides valuable insights into the factors that contributed to the company’s success in India. By examining the key takeaways and success factors identified from this case study, marketers and businesses can gain valuable lessons and apply them to their own strategies.

One of the key insights from the Kellogg’s case study is the importance of a well-defined marketing strategy. Kellogg’s success in India can be attributed to its effective marketing approach, which encompassed a mix of digital marketing, market research, and understanding of consumer behavior. This highlights the significance of developing a comprehensive marketing strategy that aligns with the target audience and business objectives.

Another crucial insight is the emphasis Kellogg’s placed on product localization and adaptation. By introducing products like Chocos and Frosties, specifically designed to cater to the Indian market’s taste preferences and cultural context, Kellogg’s was able to successfully revive its image and achieve significant sales growth. This underscores the importance of understanding local consumer preferences and tailoring products accordingly.

Additionally, the Kellogg’s case study demonstrates the power of effective brand promotion and positioning. Kellogg’s leveraged its established brand reputation and capitalized on its association with health and nutrition to position itself as a trusted choice for families in India. This highlights the significance of creating a strong brand image and effectively communicating key brand attributes to the target audience.

Furthermore, the case study highlights the value of continuous innovation and staying relevant in a dynamic market. Kellogg’s consistently introduced new products and flavors to cater to evolving consumer preferences and maintain consumer interest. This serves as a reminder to businesses that staying ahead of the competition and constantly adapting to changing market trends is critical for long-term success.

Key Insights from Kellogg’s Marketing Case Study:

• A well-defined marketing strategy is crucial for success.
• Product localization and adaptation play a significant role.
• Effective brand promotion and positioning are essential.
• Continuous innovation is key to staying relevant in the market.

The Importance of Marketing Strategy in Business Success

A well-executed marketing strategy is crucial for achieving business success. It serves as a roadmap that guides businesses in reaching their goals and objectives by effectively connecting with their target audience.

Strategic thinking is at the core of a successful marketing strategy. It involves analyzing market trends, identifying opportunities, and developing innovative approaches to differentiate a business from its competitors. By leveraging strategic thinking, businesses can gain a competitive edge and position themselves as industry leaders.

Customer insight plays a vital role in crafting a powerful marketing strategy. Understanding the needs, preferences, and behaviors of the target audience allows businesses to create tailored marketing campaigns that resonate with their customers. By gaining customer insight, businesses can deliver personalized experiences that drive customer engagement and loyalty.

A well-crafted marketing strategy not only helps businesses attract new customers but also enables them to retain existing ones. It ensures that businesses stay relevant in a rapidly changing business landscape and adapt to emerging trends and technologies. By continually refining their marketing strategies based on customer feedback and market analysis, businesses can sustain long-term success.

To further illustrate the importance of marketing strategy, let’s take a look at the following table:

As demonstrated in the table, a well-executed marketing strategy can lead to numerous benefits such as increased brand awareness, improved customer acquisition, enhanced customer retention and loyalty, effective competitor analysis, and optimized resource allocation.

Overall, the significance of marketing strategy in achieving business success cannot be overstated. By embracing strategic thinking and leveraging customer insight, businesses can develop marketing strategies that not only drive growth but also create lasting customer relationships.

In conclusion, Kellogg’s marketing strategy has played a pivotal role in establishing its strong market presence and driving consumer engagement. Through its innovative approaches, strategic product launches, and deep understanding of consumer behavior, Kellogg’s has successfully overcome various challenges and achieved remarkable growth in the competitive breakfast cereal industry. This comprehensive case study serves as an invaluable resource for marketers and businesses alike, highlighting the significance of a well-crafted marketing strategy and the critical factors that contribute to a company’s marketing success.

By harnessing the power of consumer insights, Kellogg’s has been able to develop and implement effective marketing campaigns that resonate with its target audience. The company’s commitment to continuous innovation and staying ahead of market trends has enabled it to capture the attention of consumers and maintain their engagement over time. The success of Kellogg’s marketing strategy can be attributed to its ability to deliver products that not only meet consumer needs but also align with their values and aspirations.

As the breakfast cereal industry continues to evolve, with changing consumer preferences and increased competition, Kellogg’s marketing strategy remains a driving force behind the brand’s continued growth and success. By leveraging its deep understanding of consumer behavior and employing innovative marketing techniques, Kellogg’s has been able to stay relevant and connect with consumers on a deeper level. This case study serves as an inspiration for businesses looking to achieve marketing success and underscores the importance of a well-executed marketing strategy in driving business growth and market leadership.

What is a marketing strategy?

A marketing strategy is a plan of action that an organization uses to promote its products or services, reach its target audience, and achieve its business objectives.

What is Kellogg’s marketing plan?

Kellogg’s marketing plan is a strategic roadmap that outlines the company’s marketing goals and objectives, target audience, marketing tactics, and budget.

What are some advertising techniques used by Kellogg’s?

Kellogg’s uses various advertising techniques such as television commercials, digital advertisements, social media campaigns, influencer marketing , and product placements.

How does Kellogg’s promote its brand?

Kellogg’s promotes its brand through various marketing channels, including advertising, public relations, sponsorship, event marketing, and online marketing campaigns.

What is Kellogg’s digital marketing strategy?

Kellogg’s digital marketing strategy involves leveraging online platforms, such as social media, websites, and mobile applications, to reach and engage with its target audience, increase brand awareness, and drive sales.

Who is Kellogg’s target audience?

Kellogg’s target audience includes individuals of all age groups, with a focus on families, children, and health-conscious individuals looking for convenient and nutritious breakfast options.

What is Kellogg’s marketing campaign?

Kellogg’s marketing campaign refers to a coordinated series of marketing activities designed to promote a specific product or brand, create brand awareness, and persuade consumers to make a purchase.

How does Kellogg’s conduct market research?

Kellogg’s conducts market research by gathering and analyzing data on consumer preferences, purchasing behavior, market trends, and competitor analysis to inform its marketing strategies and decision-making.

What is Kellogg’s competitive analysis?

Kellogg’s competitive analysis involves evaluating the strengths and weaknesses of its competitors, identifying market opportunities, and devising strategies to gain a competitive advantage in the breakfast cereal industry.

What are Kellogg’s marketing objectives?

Kellogg’s marketing objectives include increasing brand awareness, expanding market share, driving product sales, building customer loyalty, and maintaining a strong competitive position in the breakfast cereal industry.

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Home » Management Case Studies » Case Study: Kellogg’s Business Strategy

Case Study: Kellogg’s Business Strategy

Kellogg’s is the world’s largest cereal maker since 1906 and is located in the United States. Kellogg’s products has become a part of the delicious mornings for the people around the world since a century. Its business is operated in two segments: Kellogg’s North America and Kellogg’s International. 66% of the revenue to the company comes from North America region which consists of the Canada and the United States. The remaining 34% comes from the Kellogg’s international market which consists of Europe (20%), Latin America (8%) and Asia Pacific (6%). The products vary from ready-to-eat cereals to convenience foods such as cereal bars, cookies, toaster pastries, crackers, frozen waffles, snacks and veggie foods. Obesity and Health & Wellness is the primary concern for people in the world today. Kellogg’s has invested on this trend by introducing many health focused products like Kellogg’s ®, Pop-Tarts ®, Cheez-It ®, Mini-Wheats ®, Nutri-Grain ®, Rice Krispies ®, Keebler ®, Special K ®, Chips Deluxe ®, Famous Amos ®, Morningstar Farm ®, Sandies ®, Eggo ®, Austin ®, Club ®, Murray ®, Kashi ®, Bear Naked ®, Gardenburger ®,All-Bran ®,and Stretch Island ®. The demand for its products came from the continuous advertising since 1906. The main competitors are General foods, Quaker Oats, General Mills and Ralston-Purina. It started out in Battle Creek, Michigan with 44 employees which eventually has grown into a multinational company with 30,000 employees. The manufacturing of its products is taking place in 18 countries and selling them over 180 countries successfully with the implementation of intelligent strategies and leadership .

Key Success Factors of  Kellogg’s

The main key factors for Kellogg’s Success are it perceived to have a healthy image when compared to other daily breakfasts and snacks like chocolates and crisps. They made the products convenient enough so that they can be carried anywhere easily. They offer a range of cereal bars which are quite useful for people on the morning rush. Few Kellogg’s products are really versatile as mom’s can give them as a snack between breakfast and lunch to their kids. Sodium content in the food is a major issue that the company has to deal with. Kellogg’s are trying to develop products with less salt content and including more amount of fruits in the bars and cereals for people with health concerns. They have created a high level of brand awareness in the people which allowed them to win the customer loyalty. They have designed various products since a century for all age groups from children’s to adults. Innovation has influenced Kellogg’s market to a greater extent. Introducing new products according to the changing markets and tastes of people from time to time has made Kellogg’s to win the customers. They offered the products at a lower price which made an average household to afford, hence retaining the customers at large. Kellogg’s market its products itself. It do not manufacture cereals for any other company who sells them under their own brand. All these factors added for the company to run successfully and become the world market leaders in the highly competitive market.

Kellogg’s Business Strategy

Kellogg’s aim was to be the food company of choice and also make customers understand the importance of a balanced lifestyle which can be achieved by their products. The mission is “to drive sustainable growth through the power of the people and brands by better serving the needs of customers, consumers and communities.” Based on their vision and mission they crafted their strategy to achieve aims and objectives with the power of position and brand image. Kellogg’s targeted various groups of people and deigned the products accordingly to attract their mind sets. ‘Balanced Lifestyle’ is the broad strategic objective of the company. It implemented these strategies by some tactical plans like supporting the physical activity among all age groups and to sponsor these activities with the use of companies resources, the communication of the balance diet to consumers using the cereal packs, and also introduction of food labelling which would allow consumers to understand the balanced diet content of their products. Kellogg’s has introduced the recommended Guideline Daily Amounts (GDA) to their packaging labels. This allowed the customer to have a knowledge of the amount of nutrients in take in a serving of Kellogg’s food. Their strategy is to attract customers by encouraging them to take part in the swimming programs organised by the company in relationship with the Amateur Swimming association (ASA). Kellogg’s has sponsored almost 1.8 million awards every year to the swimmers. This idea of teaming up with ASA has helped the company to reinforce its brand image. It also has started many community programs and breakfast clubs to create awareness of their products in people. By all these activities it shows that the company is trying to create a good CSR image in the industry. Kellogg’s believed that if consumers are given proper information about their products, they can retain them. So, they chose various methods to communicate their objectives to the world such as using cartoon characters, and also through effective advertising. It also distributed nutrition magazines for the employees to make them better understand about the objectives.

Market Research

It is seen that  Kellogg’s consumers buying behavior is mostly dependent on the company’s focus towards customers and how well they treat them rather than manufacturing, pricing or merchandising of the products. Consumers tend to purchase the products which are more healthy. Hence they want to know all the available information about the products they want to buy or consume. The product’s information, beliefs, intentions and attitudes of the customers influence the decision process . So Kellogg’s has to perform a market research on whether the consumers buy their products based on the label information or not. The visual inspection of the product or the experience of purchasing the product play a major role in the decision making of the consumer. Advertising and promotion of the product might as well have a greater impact on the buying pattern. It is difficult enough to understand the consumer behavior within the borders of a single country. Understanding and serving the needs of consumers from different countries can be daunting. The values, behaviors and attitudes of the consumers vary greatly across the world. Kellogg’s must design the marketing programs and products according to the peoples needs. For example, in the United Kingdom where most people eat cereal regularly for their breakfast, Kellogg’s should try persuading consumers to buy their brand rather than a competitors brand. In France, however where most people prefer croissants and coffee or no breakfast at all, it should advertise to convince people to eat cereal for breakfast and in India, where many consumers eat heavy fried breakfasts and skip meal all together, the company should make attempts to convince the buyers to shift to a lighter, more nutritious breakfast diet.

Customer Focus and Retention Strategy

There is a huge discussion in the EU market about the food nutrition and labeling and the negative media image produced about the products of the company. The Kellogg’s products are criticized by food standard agency (FSA) as red products and junk food. They said that the company is trying to show their products healthier than they actually are. These statements and actions of FSA has not only affected the overall business and its image but also the consumer attitude towards the products.

To cover up the damage caused due to the labeling issue by FSA, Kellogg’s Should determine the customer’s needs and convert them into requirements. In order to fulfill them, it should fully understand the current and future needs of the customers, identify the customers, determine their key product characteristics, identify and assess market competition, identify opportunities and weakness , define financial and future competitive advantages , ensure that it has sufficient knowledge about the regulatory requirements, identify the benefits to be achieved from exceeding compliance and also identify their role in the protection of community interests. Kellogg’s can start launching some new products aimed at the health conscious consumers. They can start selling them for a lowest price in the market and satisfy them with a good value products for every penny they spend. They can concentrate more on three groups of people like individuals, families and supermarkets who wanted to have a healthy diet. They can focus more on health conscious people from age group from 25-50 by promising them healthy diet with their products. By the introduction of these products in the market they can show the customers that Kellogg’s is being paid attention to what they want and how important their health is to the company. They can start collecting information from consumers and people by conducting surveys about what kind of products they are actually looking for and based on that they can prepare them and position them to win the competitive advantage. So the only mantra to attract the customers again and to cover up the loss created by FSA is obsessive customer attention. Even though making health conscious customers happy might affect the short term profits, yet it helps to acquire a loyal customer base which pays off in the future. Making these products available at all consumer stores and super markets at a lower retail price might assist in building up the brand image yet again. Advertisements play a crucial role in winning the brand image and loyalty of the customers. If the company tries to create an awareness about the product and the low price buying strategy, it would encourage the consumers to buy them that results in the greater sales of the product.

Awareness of changing dynamics of the consumer market will definitely help Kellogg’s to gain a competitive edge in the cereal industry. The increasing trend of health consciousness and the changing tastes can be known time to time by extensive market research. The feed back from consumers and the surveys conducted will allow the company to learn about their drawbacks and work up on them. It enables the business to minimize price sensitivity, improve profitability , differentiate itself from the competition , improve its image in the eyes of customer, achieve a maximum number of advocates for the company, increases customer satisfaction and retention, enhance its reputation, improve staff morale , ensure products and services are delivered right ‘first time’, increase employee satisfaction and retention, encourage employee participation, increase productivity and reduce costs, create a reputation for being caring customer-oriented company, foster internal customer / supply relationships and also bring about continuous improvements to the operation of the company.

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How Kellogg's Went From Corn To Multinational Food Manufacturer

Table of contents.

Like most specialty foods, breakfast cereal is the result of a kitchen accident rather than deliberate planning. The brothers, who worked as a superintendent and a bookkeeper at a local sanitarium, were experimenting with various diets and accidentally discovered the process for making delicious and crunchy cereal.

After several name changes, the company that eventually became the Kellogg Company has grown into a multinational organization selling its breakfast treats in 180 countries. Over the decades, both the ingredients and the recipe have changed significantly: Originally intended as diet food, and later with large amounts of sugar added, the company has now refocused on healthy eating.

In this article, we take a look beyond the controversial founders to learn how a small cereal company became a Fortune 500 corporation and what its business looks like today.

A few key facts about Kellogg's:

• The Kellogg Company was founded in 1906.
• Kellogg's employs 31,000 people around the world.
• Kellogg's reported $13.77 billion net sales for 2020 .
• The gross profit in 2020 was 3% of net sales .
• In 2020, the company spent $780 million on marketing .
• Kellogg's is marketed in 180 countries around the world .
• The company sells 54 different products .
• The Kellogg Company spends less than 1% of its revenue on Research and Development .

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The Story Of The Kellogg Company

Two brothers, a sanitarium, and a kitchen accident.

The Seventh-day Adventists are a church group founded in the 1860s that preaches strict vegetarianism (and a ban on alcohol, tobacco, and other drugs). The Kellogg brothers, Will Keith Kellogg and John Harvey Kellogg were among the church's most ardent followers and made every effort to live a lifestyle consistent with religious observances. The meat was not part of their diet, so they tried to spice up their otherwise rather monotonous meals with a variety of grains. The monotony stemmed not from the ban on meat, but from the fact that John Harvey liked a hard meal and, along with Seventh-day Adventists, was a staunch follower of Sylvester Graham, the inventor of graham crackers and graham flour. He held that salt, sugar, and various spices should be avoided, in addition to meat, because they cause undesirable passions in the human body.

The Kellogg brothers ran a large and popular resort sanatorium in Battle Creek, Michigan, where patients were required to follow a strict diet in addition to regular enemas and exercise. According to some contemporary accounts, the spa was a transition between a luxury hotel and a military training camp. Methods included ice-cold showers, frequent enemas, and the use of bizarre devices of the spa's own design.

But the severity with which he treated his patients did not stop celebrities of the time from turning to Kellogg for their health. Female aviation legend Amelia Earhart and Hungarian-born Olympian Johnny Weissmuller, who played the first Tarzan, were among the patients who had access to Kellogg's sanatorium, and automobile magnate Henry Ford also willingly submitted to the doctor's will. It was here that cornflakes were born - initially from wheat.

The idea for cereal did not come first from Kellogg's. The idea came from Dr. James Caleb Jackson, who made the first dry granola in 1863, which he called "granola." It was not particularly successful until the Kellogg Company finally made the real breakthrough with sweetened cereals.

The Kelloggs found the recipe for success by accident: they had accidentally left a batch of grain in the soaker, but, short of cash, decided to use the shaken-up raw material. The wet grains were then pressed together to produce the distinctive flakes, which were initially offered to "invalids with digestive problems", constipation or other problems resulting from overly fatty, salty, or spicy American cuisine, and excessive caffeine and alcohol consumption.

How Will took over the family business

Will also realized he could make better quality by using much tastier corn instead of less exciting-tasting grains, and with his excellent business sense, he realized the market was not just people with stomach problems, but almost anyone who wanted a quick and convenient nutritious breakfast. 

As soon as guests left the sanitarium, hundreds of mail-order requests from them were made for flaked wheat. Will was forbidden by Dr. John Harvey to distribute cereal beyond the boundaries of his consumers. Consequently, the brothers fell out, and Will founded Battle Creek Toasted Corn Flake Company on February 19, 1906. He persuaded his brother to give him the rights to the product, which was then developed and produced by his company, and renamed the Kellogg Toasted Corn Flake Company in 1909, later becoming the Kellogg Company in 1922.

Turning the company into a responsible organization

"I'll invest in people," Will declared as the United States plunged into the Depression in 1930. The company split shifts and hired new workers. He also established his own foundation (named after him), which still exists today, to give poor children a start in life. For further commitment to people, Kellogg began displaying cereals' nutritional information on their boxes, so customers knew exactly what they were eating.

The company’s engineers helped manufacture supplies in Kellogg's machine shops during World War II and produced K-rations for the US military overseas. Introducing Kellogg's Raisin Bran helped the company bring new whole-grain cereal to life, helping America get more nutrition.

In 1969, while Neil Armstrong, Buzz Aldrin, and Michael Collins were on the Apollo 11 mission to the moon, the Kellogg Company provided breakfast for them.

From the late 60s, the company invested more (but as later turned out, not enough) in marketing and expanded its advertising activities to television. This has been one of the busiest periods of the company’s history with events including:

• Sunday morning TV shows used the slogan "Kellogg's puts more into your day" from 1969 to 1970.
• As of 1977, Kellogg's had acquired Salada Foods, Fearn International, Mrs. Smith's Pies, Eggo, and Pure Packed Foods, among others. The company was later criticized for not diversifying further as its competitors did at that time.

Kellogg's market share in the US dropped to 36.7% in 1983 after it underspent on marketing and product development. Wall Street analysts called it "a fine company that's past its prime".

The overall market reception encouraged Kellogg chairman William LaMothe to improve, which primarily involved marketing cereals to the 80 million baby boomers rather than children. As a result of emphasizing cereal's convenience and nutritional value, Kellogg's helped increase cereal consumption among US consumers aged 25 to 49 by 26% over the last five years.

In 1983, the US ready-to-eat cereal market was worth $3.7 billion, but by 1988, it had grown to $5.4 billion and had expanded three times as fast as average grocery categories. In addition to Crispix, Raisin Squares, and Nutri-Grain Biscuits, Kellogg's introduced Just Right for Australians and Genmai Flakes for Japanese consumers. The company, which marketed largely children's cereals, maintained a competitive edge over its top competitors: General Mills and Post, which faced challenges in the adult cereal market.

Preparing for the future with acquisitions

Kellogg's bought Keebler in 2001 for $3.87 billion, while also cutting 470 jobs at the same time. The company has also acquired Morningstar Farms and Kashi over the years. In addition, the company owns Bear Naked, Natural Touch, Cheez-It, Murray, Austin cookies and crackers, Famous Amos, Gardenburger (acquired in 2007), and Plantation brands.

As part of a cash transaction, Kellogg's acquired Pringles from Procter & Gamble in 2012 for $2.7 billion , becoming the world's second-largest snack food company (after PepsiCo). 5 years later, Rxbar, a simple food company in Chicago, was acquired for $654 million .

Ferrero SpA announced on April 1, 2019, that they would be acquiring Famous Amos, Murray's, Keebler, Mother's, and Little Brownie Bakers from Kellogg’s. The acquisition deal was completed later that year. The Kellogg Company kept the Keebler cracker line but brought it under the Kellogg's brand umbrella.

Key takeaways

The Kellogg brothers were unable to settle their cornflakes dispute until their deaths, and their relationship was forever damaged after they started their own company. But this personal tragedy does not diminish their joint achievement of inventing one of the world's most famous and beloved foods.

From the company's history, it's clear that Will, a skilled accountant, quickly understood what they needed. Kellogg's needed to capture more and more markets. After focusing on specific regions, the company moved on to targeted market segmentation - primarily targeting children and their parents with its products.

Kellogg’s Brands And Flagship Products

Who owns the company today.

Today, Kellogg’s is among the largest food manufacturing and grocery holdings companies traded on the stock exchange. The major shareholders of the company are the following, according to Market Screener .

Kellogg’s brands

The world's largest food and beverage brands are controlled by about ten companies. These companies are:

• General Mills
• Associated British Foods

And, of course, Kellogg’s .

The Company’s brands include Kellogg’s, Keebler, Pop-Tarts, Eggo, Cheez-It, All-Bran, Mini-Wheats, Nutri-Grain, Rice Krispies, Special K, Chips Deluxe, Famous Amos, Sandies, Austin, Club, Murray, Kashi, Bear Naked, Morningstar Farms, Gardenburger and Stretch Island.

Kellogg’s flagship products

According to a study by IRI Worldwide in 2017, Kellogg’s had a share of 30.01% in the US breakfast cereals market. This was because the company produced 4 out of the 10 favorite bowls of cereal:

• Raisin Bran
• Frosted Mini Wheats
• Fruit Loops
• Frosted Flakes

Sunshine Biscuits

The American Biscuit & Manufacturing Company was founded in 1890 by 33 Midwest and western bakers. The goal of consolidation, i.e., the merger of small, local companies, was to oust the two largest U.S. companies from the top of the market. The American Biscuit and New York Biscuit groups tried to eliminate the competition by opening bakeries in each other's areas and lowering prices. The National Biscuit Company (Nabisco) was formed by combining 114 factories in February 1898.

As a member of Nabisco's Board of Directors, Joseph Loose created the Loose-Wiles Biscuit Company in Kansas City in 1902, along with his brother Jacob and John H. Wiles. They imagined a factory that was filled with sunlight, so they called their products SUNSHINE. The company began expanding, opening plants in Boston and then New York.

It took Loose-Wiles forty years to dissuade other companies from using the term "sunshine" or any related term in products or advertising because it did not register its brand name. Sunshine Biscuit, Inc. finally became the official name of the Loose-Wiles Company in 1946.

The company developed new products and acquired established brands from smaller competitors in the early part of its history. There are many products and their names that resemble those of their biggest competitor, the National Biscuit Company.

The company was purchased by the American Tobacco Company in 1966. Following the sale to GF Industries, a privately held California company, the company merged with Keebler in 1996. In 2001, it joined Kellogg's group, already part of Keebler.

Cheez-It snack crackers, as well as Krispy Crackers saltines, are Sunshine's best-known products.

Frank Dorsa developed a process for cooking, freezing, and packaging waffles in San Jose, California. In 1953, similar to Kellogg’s, the Dorsa family came up with Eggo frozen waffles as "Froffles" (putting together the words "frozen" and "waffle"). A waffle iron was not necessary to prepare frozen waffles, which immediately made the product unique to the market.

Customers called them Eggos because of the egg flavor. As more and more people started calling their frozen waffle products Eggos, the owning family realized it was worth taking the opportunity to rename the company.

Eggo potato chips (and Golden Bear potato chips) and Eggo syrup were also produced by the Dorsa brothers, in addition to frozen waffles. In San Jose, CA, a sprawling plant and factory on Eggo Way produced all of the products. As active members of their local community, the Dorsas donated a great deal to local schools and community projects.

Kellogg Company acquired Eggo in 1968 as a means of diversifying. Through their television commercials, their advertising slogan "L'eggo my Eggo" was developed in 1972.

The Eggo brand of breakfast cereals is shaped like waffles and is produced by Kellogg's. It comes in flavors such as maple syrup and cinnamon toast. Originally produced from 2006 to 2012, the brand was reintroduced in 2019 following a successful campaign.

Fredric J. Baur (1918-2008) was tasked by Procter & Gamble in 1956 with creating a new kind of potato chip in response to consumer complaints about broken, greasy, and stale chips, as well as air in the bags. A canister was selected as the container for the saddle-shaped chips that Baur created from fried dough for two years. Pringles chips have a saddle shape known as a hyperbolic paraboloid.

Baur's work was restarted by P&G researchers in the mid-1960s, and they succeeded in improving the taste. The patent name on the Pringles chip is Liepa's, not Baur's, even though Baur designed the chip's shape. The machine that cooks them was developed by Gene Wolfe, an author and mechanical engineer. Pringles were first sold in Indiana in 1968 by P&G. Throughout most of the US, they were available by 1975, and internationally by 1991.

The product was originally called crisps, but due to a competitor's veto, the product was eventually required to include the words crisps made from dried potatoes. However, for understandable reasons, the company could not easily use this name in its advertising, so it was changed to "crisps".

The deal would have more than tripled the size of Diamond Foods' snack business if it were to sell the brand to P&G in April 2011. After a year-long delay, Diamond's accounts caused the deal to collapse in February 2012. As part of its strategy to grow its international snack business, The Kellogg Company acquired Pringles for $2.695 billion on May 31, 2012. As a result of its acquisition of Pringles, Kellogg became now the world's second-largest snack company.

Pringles has five plants worldwide as of 2015: in the US, in Belgium, in Malaysia, in Poland, and China.

GardenBurger

Paul Wenner developed the Gardenburger at his vegetarian restaurant, The Gardenhouse, in Oregon, around the early 1980s. In March 1985, Wholesome & Hearty Foods, Inc., was incorporated. Paul Wenner and Allyn Smaaland received their first funding as part of a venture capital investment program of Louisiana-Pacific Corp. As a result, L-P took a controlling stake in the company immediately. About a year later, the company received a second round of venture capital financing. Despite filing for bankruptcy in 2005, Gardenburger continued to operate by becoming privately owned.

It announced in 2006 that it would remove eggs from all of its products, except for one item sourced privately, which now contains organic, cage-free eggs. In 2006, the company renamed itself Wholesome & Hearty Foods. A year later, Kellogg’s acquired the company to broaden and diversify its portfolio.

The Kellogg's Company has been very involved in product development since its founding. Without it, the breakfast cereal market would not exist - although it should be added that countless studies have shown that these products have contributed greatly to the morbid obesity of American children. However, the company's strategy was clear: drive product development through the creation of new brands and acquisitions.

Today, Kellogg's has developed a complex portfolio of products and brands that includes all types of breakfast and snack foods - from frozen waffles to hamburgers.

The most famous of the acquired brands are undoubtedly Pringles, which reformed the potato chip market with its distinctive shape and flavor. In almost a decade, the group has become one of the strongest brands in the industry.

The Outline Of The Company’s Strategy

The kellogg’s better days program.

‍ Kellogg's Better Days , Kellogg's signature purpose platform, has provided 3 billion servings of food to people in need since 2013. As part of Kellogg's commitment to increase ambition in 2019, the company captured a wider range of goals and aligned with the United Nations Sustainable Development Goals.

Kellogg will address food security and create Better Days for 3 billion people by 2030 through its updated program goals. To drive positive change for people, communities, and the planet, the company focuses on wellbeing, hunger relief, and climate resilience. Kellogg's specifically supports:

• Delivering nutrients of need to 1 billion people while addressing hidden hunger.
• Providing food donations and expanded child-feeding programs to 375 million people in need.
• Achieving science-based targets, sourcing ingredients responsibly, reducing organic waste, and providing sustainable packaging while supporting 1 million farmers and workers across the value chain.
• Advancing the values of the founder by advocating for children facing hunger, encouraging employee volunteering, ensuring an ethical supply chain, and supporting diversity and inclusion.

Raw materials

As a result of the COVID-19 pandemic, food companies have run into serious difficulties as labor shortages have led to sharp price fluctuations in the commodity market. Kellogg's normally sources its raw materials from local growers but says it is increasingly reliant on imports. To compensate, Kellogg's is gradually extending contracts with its suppliers, tying up capacity in advance to ensure predictability and planning.

The trend in the international market is that the strong fluctuations in raw material prices mainly affect the US market, so Kellogg's other factories can continue to operate smoothly.

Research and Development

At the WK Kellogg Institute for Food and Nutrition Research in Battle Creek, Michigan, and other locations around the world, researchers support and expand the use of existing products and develop new products. Despite having a dedicated research institute dedicated to food quality, safety, and new product development, the company spends surprisingly little: 2020-$135; 2019-$144; 2018-$154.

Food scientists at Kellogg's world-class research facility develop innovative breakfast foods that meet consumers' expectations for taste, nutrition, and convenience.

Nine conference rooms, a boardroom, a 120-seat auditorium, a 3-story atrium, a stainless steel staircase, and state-of-the-art technology are all included in the new building. As a result, the WK Kellogg Institute consolidates the Company's global food research efforts in one location. This enables Kellogg researchers and technical experts to better share knowledge while enabling new products to be introduced to consumers more quickly.

Equity and diversity within human resources

Kellogg established a separate, independent Diversity & Inclusion Office in 2005. A major focus of this internal organization has been to recruit and retain a diverse workforce, create awareness about diversity issues, foster a supportive, inclusive work environment, and embed accountability for diversity across all lines of business. The company strives to reflect the diversity of its consumers. ED&I (Equity, Diversity, and Inclusion) is reported directly to the Board of Directors periodically.

This organization is divided into 8 different Business Employee Resource Groups:

• KVets and Supporters
• Kellogg Multinational Employee Resource Group
• Kellogg’s Young Professionals
• Kellogg African American Resource Group
• Women of Kellogg
• Hola (Latino resource group)
• KPride & Allies (LBGTQ+ resource group)
• Kapable (support group for people with disabilities).

Risk assessment with a COVID-19 focus

Kellogg's is being unusually open about the risks that management sees in COVID-19 and the economic difficulties that have followed in its wake, mainly, of course, under pressure from and for the information of its shareholders.

In its annual report, the company cites the negative impact of COVID -19 on the supply chain as the biggest risk. Forced shutdowns due to regulatory quarantine and illnesses within the company (including Kellogg Company subcontractors) make it very difficult to meet order backlog. This applies primarily to the US but could affect any other country if the outbreak worsens.

A decline in national and global economic conditions, as well as volatility in financial markets, could have a variety of effects on the business and operations, including the following:

• In economic downturns, consumers may opt for cheaper or more generic offerings or may forego certain purchases altogether, which could result in lower sales revenue or a shift in product mix to lower profit offerings, adversely affecting business results.
• As a result of disruptions or uncertainties related to the COVID-19 pandemic, Kellogg’s could be hindered in efforts to reduce operating costs, both in the supply chain and in overhead, and the ability to implement strategic plans and initiatives.
• Currency translation losses and currency transaction losses would result if the US dollar strengthened relative to foreign currencies in the countries where the company operates.
• As a result of illness or government restrictions, a considerable portion of the workforce may not be able to work.
• Because many of Kellogg's employees work remotely, Kellogg's is increasingly susceptible to cyberattacks due to its reliance on information technology systems.
• Due to illness, government restrictions, or other workforce disruptions, a manufacturing, warehousing, or distribution facility may close down, or the supply chain may be disrupted.
• As a result of reduced in-store visits and travel restrictions, it's difficult to modify trade promotion and advertising activities effectively.
• During the COVID-19 pandemic, unemployment may lead to a decrease in demand for products.
• A significant increase in commodity and other input prices could have a substantial impact on the results of operations.
• Volatility in equity markets or interest rates can significantly affect the cost of pensions and the required contribution.

Numerous measures have been taken by the Company to help fulfill key objectives and reduce industry-related risks during the pandemic:

• Keeping employees healthy and safe.
• Produce and deliver food safely to consumers and customers.
• Kellogg's supports the communities in which it operates.
• Flexibility in financial matters.
• This process involved close collaboration with medical, regulatory, and other experts.

Among the above measures, maintaining financial flexibility is discussed most openly. According to Kellogg’s, operating activities are expected to generate $1.6 billion in cash for the company in 2021, while capital expenditures will be about $500 million. Additionally, it has access to commercial paper markets and currently has revolving credit agreements totaling $2.9 billion, including $1.5 billion effective through 2023 and $1 billion through 2022.

The Kellogg Company’s operating strategy is multi-faceted and highly diversified. The Better Days program and internal strategy HR demonstrate that the company is socially responsible, to provide food to as many underdeveloped, poor regions as possible and strengthen the equity and inclusion of external and internal human resources (employees and contractors).

At the same time, another important element of the operational strategy is to ensure the stability of the company during the pandemic COVID-19. This involves ensuring that the huge demand for raw materials can be met (especially in the U.S., where shutdowns are most difficult) and providing financial stability, for which Kellogg's considerable liquidity is a great help.

But it is also surprising how little one of the world's largest food conglomerates spends on food safety and innovation. This is especially true given the pressure on the company to produce ever healthier, sugar-free products that are more beneficial to children's development - but so far this is happening more at the level of communication.

Production, Sales, and Marketing

Manufacturing breakfast.

Three nutrients - nitrogen, phosphorus and potassium - are injected into the soil in April to help the seeds grow. Two months later, the corn undergoes a growth spurt, reaching five feet tall and blooming. It is time to harvest the corn between October and November, when it is ready for sifting, cleaning, and rolling at a mill, before it is shipped to Kellogg's. Flakes are formed from corn grits in the factory. Kellogg's Corn Flakes are cooked, dried, and toasted to create these flakes, which are then sold at supermarkets.

As a traditional FMCG company, Kellogg's does not sell directly to customers but is associated with small and large grocery chains such as Walmart and Tesco. About 20% of the group's employees are in sales, mainly account managers who sell products to store networks and make sure they are positioned correctly.

There is also a dedicated team for what is known as sampling, which overlaps with sales and marketing. This involves giving customers the opportunity to try the latest products in a country-specific, localized way. With a category like cereal, the company needs to create multiple touchpoints so consumers can experience the products. Sampling, along with the right pricing architecture, helps achieve this. In this series of innovations launched over the past few years, sampling and other promotional activities have taken center stage as they help consumers experience a product firsthand before they develop an affinity for it.

Kellogg's has focused on its core target group of children - or more specifically, families with children - almost from the beginning. This is a special market segment, because you have to both persuade and engage kids (if they do not like the product, parents will buy it for free) and send the right messages to parents. The company realized early on that the packaging of the products plays an important role in this, and continues to do so today.

To meet parents' expectations, the health benefits of healthy foods must be emphasized in advertising, on packaging, and on all company communication platforms.

Kellygg's invests more than 8% of its sales in brand building , which helps the company build a strong brand in the developing world. One of the current focus areas of the company is India. According to Bakery and Snacks , the 2019 brand value of Kellogg’s was $6.7 billion - the fourth largest globally.

Kellogg's marketing campaigns have changed significantly over the years. With a marketing budget slightly below the market average, the company typically thinks about more thoughtful campaigns. Before the 2000s, it was more typical to sponsor sporting events, advertise on TV (the best time to do this was before children's shows on weekends), but they also provided the fake money for the moon landing.

In developed countries, marketing spend is increasingly shifting to the Internet (the company has over 1 million followers on Facebook in the US alone), but in developing countries, print media and television remain the most effective channels. For the poorest regions of the developing world, not only is information an important goal, but Kellogg's must also educate the market. In India, for example, a significant proportion of children do not eat breakfast at all, so Kellogg's is also raising awareness in its local campaigns.

The Kellogg's group of companies is a traditional FMCG company, meaning that it does not sell its products directly to the consumer, but involves various distributors in the process. These are smaller, local grocery stores, which are visited individually by sales representatives, and large chains and supermarkets, which are in turn contacted by central customer service representatives.

For one of the world's best-known food brands, Kellogg's spends very little on brand building and marketing activities. Much of that spending goes to developing countries, where breakfast and fake foods are not as fashionable as they are in the U.S., for example. Kellogg's is trying to market itself through education.

Final Thoughts And Key Takeaways

Growth by numbers.

Kellogg Company Group sales clearly peaked in the past decade in 2014, followed by a sharp decline and another gradual increase. However, the coronavirus outbreak changed all scenarios - providing an unexpected surge in cereal purchases (only to later lose momentum due to supply chain disruption).

One of the big challenges for Kellogg Company is the growing competition in the market, fueled not only by cereals but also by breakfast offerings from fast-food chains. However, the company does not yet have an overarching global strategy that could differentiate it from the rest of the market.

Key takeaways from Kellogg’s story:

• Responsible recipes: Kellogg's focused on responsible practices relatively early on, which remains an important communication point today. However, values such as producing healthy food, promoting the trace elements necessary for children's development, and educating people about the importance of breakfast are not just marketing concepts; they play a major role in convincing families with children to buy the products in the long term.
• Building complementary brands: The company has slowly but steadily developed its numerous sub-brands. These were later complemented by acquisitions of companies already established in the market. The underlying strategy was to be present in the breakfast meal and snack market with all significant product lines.
• Taking responsibility within the company: Diversity and inclusion are not just buzzwords, they also help Kellogg to remain a world-leading group and provide opportunities for talent to flourish, regardless of background. It has also launched a special program to feed and educate people in poor regions.
• Brand building at low cost: One of the Kellogg Group's greatest advantages is that the product line it invented is still identified with the company, giving it an advantage in competing for customers even after 100 years. For this reason, brand building is primarily focused on global regions such as certain Asian countries where there is still room for market growth.

But competitors are on a more spectacular trajectory - both Nestlé and Danone are developing much broader product portfolios, giving them the opportunity to capture a larger segment of the food market. Kellogg's is still the market leader in breakfast cereals, but if the company does not increase its pace of innovation, spend more on marketing and overcome the risks associated with the global shortage of raw materials, it could lose its leadership position.

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About The Author

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Kellogg's Achieves Speed and Agility with AWS Cloud to Develop and Deliver Business Services

The Kellogg Company was founded in 1898 when founder W. K. Kellogg and his brother, Dr. John Harvey Kellogg, accidentally flaked wheat berry—a mistake that would result in the recipe for Kellogg’s Corn Flakes. The company, which is headquartered in Battle Creek, Michigan, now operates in 180 countries, providing ready-to-eat cereals and other food products. Its 2013 reported net sales totaled $14.8 billion. Kellogg’s brands include Froot Loops, Frosted Flakes, Special K, Rice Krispies, Pop Tarts, Eggo Waffles, Nutri-Grain Bars, and of course, Kellogg’s Corn Flakes.

Overview | Opportunity | Solution | Outcome | AWS Services Used | Architecture Diagram

The company, which is headquartered in Battle Creek, Michigan, now operates in 180 countries, providing ready-to-eat cereals and other food products. Its 2013 reported net sales totaled $14.8 billion. Kellogg’s brands include Froot Loops, Frosted Flakes, Special K, Rice Krispies, Pop Tarts, Eggo Waffles, Nutri-Grain Bars, and of course, Kellogg’s Corn Flakes.

Opportunity |  The Challenge

Margins are tight in the ready-to-eat cereal industry. For a company like Kellogg, approximately a third of its annual revenue is spent on promotional costs or trade spend: every dollar spent on coupons and special offers, promotions for special pricing, sponsorships, even the location each brand occupies on the grocery-store shelf. “Any improvements we make to trade spend go straight to our bottom line,” says Stover McIlwain, Senior Director of IT Infrastructure Engineering at Kellogg. “If we improve trade spend by just 1 percent, that’s $50 million dollars.”

The company keeps a close eye on its trade spend, analyzing large volumes of data and running complex simulations to predict which promotional activities will be the most effective. Kellogg had been using a traditional relational database on premises for data analysis and modeling, but by 2013, that solution was no longer keeping up with the pace of demand. Each day, Kellogg needed to run dozens of complex data simulations on things like TV ad spend, digital marketing, coupon campaigns and other promotions, sales commissions, display and shelving costs—but its system only had the capacity to run just one simulation a day. “Margins are very tight in our industry, and even slight changes in trade spend can swing market share,” McIlwain says. “Revenue growth is flat in some of our categories, so we need to be very agile to stay competitive. We needed to eliminate waste and invest more in the trade spend that drives faster time to market and greater revenue.” It was clear that Kellogg needed to move away from its traditional on-premises infrastructure.

By using AWS, we have happier customers and we work faster, cheaper, and better."

Stover McIlwain Senior Director of IT Infrastructure Engineering, The Kellogg Company

Solution |  Why Amazon Web Services

Kellogg needed a solution that could accommodate terabytes of data, scale according to infrastructure needs, and stay within its budget. The company became interested in an SAP solution called Accelerated Trade Promotion Planning, which is powered by SAP HANA, SAP’s in-memory database technology platform. Amazon Web Services (AWS) offered a fully SAP-certified HANA environment on a public cloud platform. Because SAP works on the AWS Cloud, the company knew it could achieve the speed, performance, and agility it required without making a significant investment in physical hardware. Kellogg decided to start immediately with test and development environments for its US operations.

The company is now running the SAP Accelerated Trade Promotion Management (TPM) solution, powered by SAP HANA and leveraging multiple AWS instance types for both the SAP application and HANA database layers. These Amazon Elastic Compute Cloud (Amazon EC2) instances process 16 TB of sales data weekly from promotions in the US, modeling dozens of data simulations a day.

The company also uses Amazon Virtual Private Cloud (Amazon VPC), which is connected directly to the Kellogg data centers to allow access to SAP TPM directly for employees who are on the company network. Amazon Simple Storage Service (Amazon S3) is used for data backups, including HANA, and Amazon Elastic Block Store (Amazon EBS) provisioned IOPS (P-IOPS) volumes for storage. The company logs events using AWS Identity and Access Management (AWS IAM).

Kellogg uses Amazon CloudWatch for monitoring, which helps the company allocate costs to each department based on their individual infrastructure use. “CloudWatch helps our people make better decisions around the capacity they need, so that they can avoid waste,” McIlwain says. “We were never able to do that with our on-premises infrastructure. AWS breaks down usage and cost to such a granular level that we can identify which costs come from which department, like a toll model.” Costs and benefits of this IT service can now be aligned so that Kellogg can assess the true return on investment.

For high availability, Kellogg leverages multiple AWS Availability Zones (AZs) without the additional cost of maintaining a separate datacenter.

Outcome |  The Benefits

Kellogg estimates that it will save close to a million dollars in software, hardware, and maintenance over the next 5 years, just by using AWS in its test and development environments. “Using AWS saves us more than $900,000 and lets us run dozens of data simulations a day so we can reduce trade spend. It’s a win-win, and a pretty compelling business case for moving to the cloud,” McIlwain says.

By using AWS, the company is also able to be more agile. Instead of having to wait 30 days to make changes to its trade spend analysis system, the company can spin up instances immediately to perform the necessary data simulations (or calculations). “The speed and agility that using AWS gives us lets us develop and deliver business services much more quickly than before, so that we can keep one step ahead of the market. Our staff can deploy instances 90 percent faster than with our previous on-premises solution,” McIlwain says. “The AWS Cloud drives a lot of business benefits for Kellogg.”

Kellogg engineers liked the accessibility and familiarity of the AWS platform, which enabled them to easily apply their existing knowledge and infrastructure skills to the AWS Cloud. In addition, by using AWS, the IT team’s internal customers can now self-fund IT projects—saving the IT team from having to budget for projects from other departments and driving more efficient use of resources. “AWS allows me to do the unprecedented: bill Sales directly for the infrastructure they’re using, instead of the hosting costs being lost in the overall Infrastructure annual budget,” McIlwain says. Kellogg is pleased that AWS supports the option to leverage existing HANA licenses that the company previously purchased from SAP; it allows the team to quickly provision instances and avoid having to repeatedly install and configure the software.

The company uses AWS Support , Business Level, and training, as well; one engineer already has successfully achieved the AWS Certified Architect certification . “The engineering support included training and documentation,” McIlwain says. “It exceeded expectations and became a key differentiator and added benefit in working with AWS.”

Kellogg is using AWS for its US operations, and plans to expand worldwide in 2014 — which should increase the amount of data being processed from 16 TB to 50 TB. “By using AWS, we have happier customers and we work faster, cheaper, and better,” McIlwain says.

About Kellogg Company

The Kellogg Company was founded in 1898 when founder W. K. Kellogg and his brother, Dr. John Harvey Kellogg, accidentally flaked wheat berry—a mistake that would result in the recipe for Kellogg’s Corn Flakes.

AWS Services Used

Amazon Elastic Compute Cloud (Amazon EC2) is a web service that provides secure, resizable compute capacity in the cloud.

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Provision a logically isolated section of the Amazon Web Services (AWS) Cloud where you can launch AWS resources in a virtual network that you define.

AWS Support

AWS Support brings Amazon’s tradition of customer-obsession to the B2B technology world. We focus on helping you achieve the outcomes you need to make your business successful.

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Amazon Elastic Block Store (EBS) is an easy to use, high performance block storage service designed for use with Amazon Elastic Compute Cloud (EC2).

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Case Study - Kellogg

Kellogg Company is a multinational food manufacturing company which produces cereal and convenience foods, including cookies, breakfast cereals, frozen waffles, and vegetarian foods. Learn why and how Kellogg set their science-based targets.

Kellogg Company (also known as Kellogg’s) is a multinational food manufacturing company headquartered in Battle Creek, Michigan. The company’s brands include Froot Loops, Corn Flakes, Rice Krispies, Special K, Pringles, Pop-Tarts, Nutri-Grain, and Morningstar Farms.

Kellogg products are manufactured in 18 countries and marketed in over 180 countries. In 2012, Kellogg became the world’s second-largest snack food company (after PepsiCo) by acquiring the Pringles potato crisps brand from Procter & Gamble. We spoke to Kellogg’s Senior Sustainability Manager, Amy Braun, about Kellogg’s science-based targets.

Why did you set a science-based target?

During COP21 we wanted to do something smart and long term that aligned with the ambition of governments going to Paris. We had already committed to setting targets for scopes 1, 2 and 3 and we decided we wanted to incorporate the science, as a way of making the target we set strongly justifiable. It was also a way for us to continuing to establish our leadership. And of course, there’s a strong business case as we need to ensure long-term access to the ingredients and resources needed for our foods.

What was the process like?

We are not subject matter experts in climate science: we make excellent food! So, we partnered with WWF, WRI, and CDP to come up with a plan to set targets using the latest information from the Intergovernmental Panel on Climate Change (IPCC). We really dug into the science from the outset: we wanted to understand the IPCC findings, the related global aspirations, and where we fitted in.

We convened our NGO advisors – including the Science Based Targets Initiative partners – and we looked with them at where the company was at in its journey, and the commitments it had made so far. We asked them: what do we need to do to make this more long term, more ambitious? They introduced us to the methods – the Sectoral Decarbonisation Approach and the 3% Solution – that helped us shape and validate our initial thinking.

It was really critical that we worked with others – the NGOs, but also government, suppliers, other stakeholders – to understand how we could make meaningful impacts.

What challenges did you encounter?

It was a challenge to change our internal culture to think more long-term and to understand how our short-term commitments (up to 2020) contributed to and helped to build a longer-term vision. We needed to think big, to recognise that as an established, successful company we were not going anywhere, and therefore needed to shift our time horizon from 5 to 35 years.

What changes came about as a result of having set the target?

This was the first time we had had a quantifiable emissions reduction target for scope 3 emissions. It meant that we had to engage with our suppliers, establish a baseline, and work with them to decide what changes could be made. Since we set the target, we have already begun to engage 75% of our suppliers (over 400 of them) by requesting they respond to the CDP Supply Chain questionnaire on GHG emissions. We have also developed materials to help them understand the challenge and the options they have.

We have 35 programs globally designed to help farmers decrease their footprint. We have committed to supporting half a million farmers to implement smart agricultural practices focused on emission reduction and resilience. We are collating research and aggregating learning from best practices and then sharing back with individual farmers so they can benefit from the collective information.

Having the headline, long term, science-based targets has also bought everyone in the business together, under the same tent. Now logistics, distribution, and manufacturing are all working together to drive towards the same target. This allows for everyone to be part of one company-wide team that is driving greater sustainability. It creates a different culture.

What benefits have you experienced as a result of setting a science-based target?

The benefits are huge. We are one of just a few companies that have set holistic scope 3 targets for all of our suppliers. This is so powerful and yields a real leadership dividend. It’s a demonstration of how quickly we have upped our game since 2008 when we first set emission reduction targets. This kind of acceleration leads to recognition from internal and external stakeholders, which is really valuable.

Having a science-based target helps us build relationships with government and changes the nature of the conversation we have with them. Overall, this is all part of our wider story as ‘brands with purpose’, and the actions we are taking as result of having set a science-based target are essentially proof points of our commitment to sustainability and to leadership to protect the planet.

Is this something you think your customers wanted you to do?

Our customers are retailers and they really want us to do this. Consumers are perhaps less knowledgeable but awareness is growing, and they are all interested in the ingredients in their food. With our Morningstar Farms brand for example, we can see that people are aware of their carbon footprint, and are excited about actions they can take to reduce it. We are running “Veg of Allegiance” campaign where people substitute one vegetarian product for a meat product they would normally eat. People love it.

What costs have you encountered?

There are obviously trade offs to be made but in most cases we see reductions in energy use as a direct benefit. Some things may be higher cost as a result of efforts to reduce emissions, but we are always looking for the win-win. This might mean we need to look over a longer time line. But the win-wins are there: we believe we can do this without having to accept higher costs.

Has this motivated innovation in the company?

Absolutely. For example, we now have fuel cell technology at our waffle-making facility in San Jose, which generates electricity. This is the first time Kellogg has explored this sort of thing and it was motivated directly by the emissions reduction target. It has led to new learning for the sustainability team, the plant, and the supply chain managers. It took a while to get it off the ground but it’s now working, and we are looking to replicate it in another facility. Overall, I think people are now more willing to try new things to help drive towards the target: it has created a ‘start-up mentality’.

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“Simplify and stabilise”: Kellogg Company’s journey to supply chain sustainability

In the second of two blogs ( read the first one here ), Charlotte Durrant, Sedex Marketing Communications Manager, reflects on key learnings from the keynote speech by Alistair Hirst, SVP Global Supply Chains at Kellogg Company, at the Sedex Conference 2016.

Kellogg Company have an organisation of 33,000 people, and Alistair Hirst has 20,000 in supply chain – that’s just his direct employees. When looking at their extended supply it becomes a significantly larger number. At the Sedex Conference Hirst outlined how, “ one of the things that I have learned is that if I don’t have a stable base to build on, then I know whatever I’m doing isn’t going to be sustainable. Simplifying can help you stabilise and vice versa .”

Hirst described the breadth of Kellogg Company’s operations – producing 1,600 foods in 20 countries, which it markets in 180 countries. This breadth makes transparency hugely important. Hirst said: “ Sustainability is no longer just about reducing your greenhouse emissions or energy footprint – it’s your end-to-end supply chain. We have a responsibility – whether it’s tier 1, tier 2, tier 3 or 4 supply chain – to understand what it going on throughout that whole supply chain .“

“ Business has a role to play, and it creates markets and opportunities, especially in the developing world for small farmers to improve their livelihoods. And our customers expect that. Everything we’re doing is being driven by our consumer and our customer. We don’t do it just because we think it’s a good idea, we know our consumers – particularly millennials – want to know where their food comes from. They want to buy from companies that have the same moral compass that they do .”

Hirst described the four things he thinks Kellogg Company needs to be to make sure it has a stable supply chain:

• Resilient : “ We need to be resilient against short term supply shocks, to react quickly, to get supply at short notice .”
• Predicable:  “ We need to predict longer term supply shocks, particularly around climate change, and what we can do to get ahead of it .”
• Rich data or predictive analytics:  “ There’s more data in the world than there’s ever been, but are we using it to predict what could be happening in the future? Predictive analytics can be a big enabler to stabilise the supply chain .”
• Partnership s: “ There’s no way Kellogg can do this on our own, we have to choose the partners who can help us be successful and get the positive outcomes we’re looking for. We work with the World Bank, with Sedex, with SGS; multiple organisations to help understand our supply chain and our sustainability agenda .”

Hirst then outlined four things that Kellogg Company is currently working on in its supply chain:

• Climate Smart Agriculture : “ Is about increasing productivity and crop resilience and reducing greenhouse gas emission. Kellogg Company is partnering with 15,000 farmers by 2020 to work on these practices .”
• Climate and Natural Resource Conservation : “ Two areas we’re particularly interested in are water availability and soil health, because without those crops cannot grow and we can’t be productive .”
• Human Rights:  “ A huge issue for us. We have our global code of ethics which our suppliers are expected to comply with .”
• Reputation : “ We know our reputation is a fragile thing. When information can travel round the world instantaneously, your reputation can be good today and before I’ve finished speaking it can be trashed around the world. This is where audits come in, I love audits. We need audits for continuous improvement – ‘a commitment made is a commitment delivered’ in the Kellogg’s supply chain .”

Hirst stressed the importance of clear metrics in responsible sourcing and gave some key examples of targets Kellogg Company is working towards. He also talked about the difficulty of measuring and meeting these targets: “ this is hard – our supply chain is constantly changing, but we don’t change our target, it stays the same whatever, we keep moving forward .”

He then noted three examples that Kellogg Company are proud of:

• Kellogg’s Origins:  The company has been working with UK farmers to increase biodiversity and take children from inner-city schools to see where their food comes from.
• Thai rice:  Kellogg Company has been working closely with the Thai government since 2008 to grow long grain rice in Thailand, in order to ensure resilience of supply. Last year they got the first commercial crop into the business. The Thai government says it’s the first time a public-private partnership has worked in this agro-space and Kellogg Company has created a market for the Thai farmers which gives them more security.
• Quinoa growers in Bolivia:  Kellogg Company helps farmers with crop husbandry to keep their organic certificate, which is critical for their livelihoods. There is no electricity on the farms, so they also invested in solar power which allows the farmers to irrigate the fields and light their homes at night.

Our customers want to buy real food, they care about where it comes from and who grows it, that we care about the planet. Simplify the work, stabilise the supply base, support the people, communities and environment where we work and source. But never forget, we’re still a business, we have to have front and centre: consumer and customer .

Hirst also talked about the power of partnerships. He described how, in his view, “ supply chains are too simplistic and linear in this VUCA world – we operate in supply webs now – and a spider rarely goes across its web in a straight line .”

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15 Kellogg’s in India

• Published: August 2022
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Today, Kellogg’s is an American owned organization that has a true global market. In the late 1980s, the company had reached an all-time peak, commanding a staggering 40% of the US ready-to-eat food market from its cereal products alone. By that time, Kellogg’s had over 20 plants in 18countries worldwide, with yearly sales reaching above US $6 billion. But since the 1990s, the company started receiving the pressure from its rivals, as a result the company started looking at the markets other than United States and that of UK’s.

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Case Study | Launching Kellogg’s Cornflakes in India

Case Study | Launching Kellogg’s Cornflakes in India 10 min read

“ Mothers know what they want and when; we can’t push our offering to them without giving them a reason they value, ” the Head of Marketing at Kellogg’s India clarified. The Kellogg’s cornflakes marketing team was struggling to find an appropriate positioning platform for the brand to increase sales and ensure brand growth. The brand was globally accepted but its journey in India has been bumpy. They had struggled to find a suitable place in consumer’s heart and mind, and again they were rethinking the growth strategy. Let’s delve into the classic case study of Kellogg’s launch in India and the valuable lessons it departs.

Table of Contents

Breakfast Market in India

The breakfast cereal market in India was pegged at Rs. 12 billion in 2014, an almost 15% growth from Rs. 10.4 billion in 2013, and was expected to grow at a CAGR of 13% over the five-year period. Due to increased health consciousness among consumers, hot cereals and muesli were the fastest growing product categories. Among hot cereals, oats had gained the highest popularity registering a 33% growth in 2014.

Cereal was not a popular breakfast item for Indians, and hence, the market was dominated by international brands from Kellogg’s and Pepsico. Bagry’s India Ltd and Mohan Meakin were the only two Indian players in the market. Kellogg’s India Ltd had the first-mover advantage and was the undisputed market leader with 37% value share in 2014.2 Regional players had a competitive edge over bigger brands because of their robust distribution network. Competition also stemmed from other FMCG chains that did not necessarily have packaged breakfast as their core product offering, for example, ready-to-eat players like MTR and Britannia with its range of ready-to-cook upma, porridge, and poha. These products provided consumers with healthy options that were not just quick but also healthy.

Consumer Behavior Towards Breakfast

India did not have the culture of breakfast. A typical, average middle-class Indian family did not have breakfast on a regular basis like their western counterparts. Breakfast was always combined with lunch—“Brunch” as it was popularly called. Breakfast habits (brunch) in India, for the most part, were inclined towards hot, cooked regional items, like flattened rice flakes (chivda/poha) in western and central India, whole wheat grits (dalia) and parathas in northern India along with traditional regional staples such as idli or dosa in the south. In the earlier days, women prepared fresh breakfast for the family. Serving ready-to-eat meals were not part of the cultural norm and such options were also not widely available.

However with urbanization, dual-working households, and lifestyle changes, there was a greater need for convenience. This was also coupled with increasing disposable income and health consciousness. Increasing awareness of health and susceptibility of Indians towards lifestyle ailments like heart disease and diabetes yielded a greater demand for value-added healthy breakfast options.

Hence, consumers, especially in urban areas, preferred a quick-fix breakfast and cereals would fit the bill. The influence of Western lifestyles and “eating out” trends also played a significant role in opening the gateway for experimenting with different tastes and varying eating preferences. This transition from traditional to modern breakfast took place among young Indians (24–35 years), mostly from dual income families. Choice of breakfast options was induced by personal factors like time constraint, work timings, social groups, and family members.

Kellogg’s Entry in India

In the late 1980s, ready-to-eat cereal giant and market leader, Kellogg’s had reached peak sales occupying a 40% market share in the US. The company had its presence in 18 countries and over 20 plants worldwide with annual sales of over $ 6 billion. However, in the 1990s, competition got tougher and Kellogg’s began to struggle when its nearest rival when General Mills introduced Cheerios brand. There was little room for growth in core markets; therefore, the company started looking beyond its traditional American and European countries as a potential cereal-consuming market.

India was a lucrative target market with population of over 950 million, out of which 250 million were middle class and untapped. In 1991, India went through an economic liberalization and removed the barriers to international trade. Three years later, Kellogg’s decided to invest $ 65 million towards launching its number one brand, Corn Flakes, in India. “ Even if Kellogg’s had 2% market share at 18 million consumers they would have a larger market than US itself , ” said Bhagirat B Merchant, Director of Bombay Stock Exchange in 1994.

Positioning at Launch

Globally, Kellogg’s cornflakes were positioned on the “fun and taste” platform, and they emphasized on the crispiness of its flakes. When Kellogg’s entered the Indian market in 1994, it positioned itself to families/households on the health platform, thus emphasizing on the nutritional benefits of the cereal. They tried to communicate to consumers that traditional Indian breakfast options were not as healthy, and hence, cornflakes were a good choice. This was done based on the insight that Indians consumers were not habituated to cereals as a breakfast item and needed to be educated to create acceptance and liking for not just the brand but cereal as a category.

Kellogg’s kicked off its India entry with three variants of breakfast cereal: Corn Flakes, Wheat Flakes, and Rice Flakes, packaged with an emphasis on the crispiness of its flakes compared to local cereals. These cereals were best served with cold milk without adding sugar. The tagline to reinforce the positioning was- “ Jaago jaise bhi, lo Kellogg’s hi ” (“No matter how you start your day, start it with Kellogg’s”). However, the proposition did not find much credibility with households. Average Indian did not pay much importance to iron/vitamin intake.10 The nutritional benefit was not a differentiated and strong enough proposition for Indians to change their habits and move away from traditional items as they considered their food to be equally or more nutritious.

The initial sales were impressive but Kellogg’s knew that this was a result of one-off purchases. Cereals were a new item for the Indian consumer and after the initial excitement wore off, repeat purchases were few. Another barrier to repeat purchase was the high price. A 500 grams box of corn flakes was almost 30% costlier than its nearest competitor. Indians did not find value in spending so much for an expensive breakfast and often the leftovers from the previous day were cooked or served differently for breakfast next day. In certain households, corn flakes were reserved as a Sunday or special occasions treat.

Also, the emphasis on crispy flakes failed in India as consumers were used to hot milk which made cornflakes soggy. This further diluted the Kellogg’s brand promise. On the heels of continuous unimpressive sales, Kellogg’s realized that their breakfast option was diametrically opposite to what generations of Indians have been eating. The typical Indian breakfast was still hot, home-made, heavy-as-a-meal, and savory rather than sweet. What Kellogg’s was offering was ready-to-eat, best served with cold milk, and bland unless you add a sweetener.

In early 1996, defending the company’s products, Managing Director, Avronsart said, “ Kellogg’s India is not here to change breakfast eating habits. What the company proposes is to offer consumers around the world a healthy, nutritious, convenient, and easy-to-prepare alternative in the breakfast eating habit. It was not just a question of providing a better alternative to traditional breakfast eating habits but also developing a taste for grain-based foods in the morning ”.

Indian consumers did not perceive the Kellogg’s differentiators relevant. They were not looking for thicker and crispier flakes with iron and vitamin. They sought basic health and taste which their traditional food and other competitor brands were also fulfilling.

Repositioning and Product Extensions

Kellogg’s saw that Indian households were difficult to target and moved their focus to kids with the launch of two of its highly successful international brands, Chocos in September 1996 and Frosties in April 1997. Chocos were wheat scoops coated with chocolate, while Frosties had sugar frosting on individual flakes. Frosties addressed the shortcomings of plain cereals because they were ready sweetened which sweeten the milk when it is added to the bowl. Both these variants were not positioned as breakfast items but as snack items on the proposition of fun and taste combined with health. Now the mother was urged to give Chocos as a mid-meal snack to fulfil nutrition requirement.

These variants found feet in the market and targeting kids helped. However, in 1998, Kellogg’s again tried targeting families and households by “Indianizing” its cereal range with the “Mazza” brand. Mazza cereals were available in fusion of local flavours like mango-elaichi, coconut-kesar and rose. The variant did not work. Mazza was more to do with the taste of the product and many consumers thought these were too outlandish.

In 1999, Kellogg’s began offering fortified cereals. The “Iron Shakti” cornflakes positioned on the nutrient value of cornflakes and addressed iron deficiency in children. The nutrition platform was more focused and relevant here as no other brand or product spoke of iron supplement. This became the differentiator and sales increased by 17%. Making the brand and proposition sound Indian by using words like “Iron Shakti” and “Calcium Shakti” gave it a local feel. This approach was more successful than the brand’s previous attempt to imply that the traditional Indian breakfast was not nutritious—messaging which made the Indian housewife rather indignant. The proposition this time was a nutritious and fun breakfast for kids coupled with goodness of iron (which mothers worry about).

Besides positioning, Kellogg’s also changed the communication. It removed the rooster which had an integral association with Kellogg’s globally from all its advertisements in India. The promotions focused on inducing product trial by targeting schools across the country. In March 1996, the company gave out specially designed 50 gm packs to shoppers at select retail stores, and door-to-door sampling exercise offering one-serve sachets to housewives in the city.

However, the company knew that very few Indians had breakfast and they could grow only by growing the category. In 1997, they launched the “Kellogg Breakfast Week” in Mumbai, Delhi, and Chennai, a community-oriented initiative to create and increase awareness. The campaign focused on making people aware about the prevention of anemia, an iron deficiency disorder, and conducted a series of nutrition workshops to educate individuals and families.

As the brand had sub-segmented the market and offered specific customized variants to each with the relevant proposition, its agency, JWT, wanted to identify the triggers that enabled customers to move towards this category. Their research suggested that though Kellogg’s was positioned to kids, they were consumed by the entire family. They also found that healthy afternoon snacking was a large consumer need. Lastly, women in India were becoming more health conscious and desperately wanted to get into shape.

Using these insights, Kellogg’s launched Kellogg’s multi-grain, fortified cornflakes targeted to adult taste buds. Advertisements also began showing adults eating the cereal, rather than focusing on children alone. The assault on the afternoon-snack segment was led by Chocos. This brand was already popular with children, who were their key consumers for “4 pm munches”. The launch communication offered the Chocos variant as a nutritious substitute for chips and other junk food.

Special K: Get into Shape

In 2008, Kellogg’s launched their $1.5 billion “Special K” brand as a weight management cereal targeted at women (25–44 years) who wanted to keep in shape. It was positioned as a low-calorie weight control meal. This was again not categorized as breakfast item but a complete meal. Consultants pointed out that Kellogg’s’ brand extension strategy helped to increase its relevance across categories. It was a player in the Rs 500-crore weight management market and the Rs 750- crore convenience foods market, apart from the Rs 250-crore breakfast cereal market (which, in turn, was part of the Rs 2,000-crore health foods segment).

The marketing team knew that as against other markets, Kellogg’s not only adapted its portfolio to match Indian needs but also made changes to their global positioning to appeal to Indian consumers. Indian market is diverse and unique, and expects the offerings to fit their life pattern. The marketing head at Kellogg’s had recently read an article that incorrect positioning was the reason behind 80% brand failures. Kellogg’s have been relooking at their 5-year strategy as they have always wanted to be confident on the delivering the promise they have made to its consumers.

Also Read: Case Study | Launching And Establishing Oreo in India

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Jennifer Howard-Grenville and Ujjwal Pandey

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Hydrogen is often hyped as the “Swiss army knife” of the energy transition because of its potential versatility in decarbonising fossil fuel-intensive energy production and industries. Making use of that versatility, however, will require hydrogen producers and distributors to cut costs, manage technology risks, and obtain support from policymakers.

To cut carbon dioxide emissions, hydrogen production must shift from its current reliance on fossil fuels. The most common method yields “grey hydrogen”, made from natural gas but without emissions capture. “Blue hydrogen,” which is also made from natural gas but with the associated carbon emissions captured and stored, is favourable.

But “green hydrogen” uses renewable energy sources, including wind and solar, to split water into hydrogen and oxygen via electrolysis. And, because there are no carbon emissions during production or combustion, green hydrogen can help to decarbonise energy generation as well as industry sectors — such as steel, chemicals and transport — that rely heavily on fossil fuels.

Ultimately, though, the promise of green hydrogen will hinge on how businesses and policymakers weigh several questions, trade-offs, and potential long-term consequences. We know from previous innovations that progress can be far from straightforward.

Wind power, for example, is a mature renewable energy technology and a key enabler in green hydrogen production, but it suffers vulnerabilities on several fronts. Even Denmark’s Ørsted — the world’s largest developer of offshore wind power and a beacon for renewable energy — recently said it was struggling to deliver new offshore wind projects profitably in the UK.

Generally, the challenge arises from interdependencies between macroeconomic conditions — such as energy costs and interest rates — and business decision-making around investments. In the case of Ørsted, it said the escalating costs of turbines, labour, and financing have exceeded the inflation-linked fixed price for electricity set by regulators.

Business leaders will also need to steer through uncertainties — such as market demand, technological risks, regulatory ambiguity, and investment risks — as they seek to incorporate green hydrogen.

Test yourself

This is the third in a series of monthly business school-style teaching case studies devoted to responsible-business dilemmas faced by organisations. Read the piece and FT articles suggested at the end before considering the questions raised.

About the authors: Jennifer Howard-Grenville is Diageo professor of organisation studies at Cambridge Judge Business School; Ujjwal Pandey is an MBA candidate at Cambridge Judge and a former consultant at McKinsey.

The series forms part of a wide-ranging collection of FT ‘instant teaching case studies ’ that explore business challenges.

Two factors could help business leaders gain more clarity.

The first factor will be where, and how quickly, costs fall and enable the necessary increase to large-scale production. For instance, the cost of the electrolysers needed to split water into hydrogen and oxygen remains high because levels of production are too low. These costs and slow progress in expanding the availability and affordability of renewable energy sources have made green hydrogen much more expensive than grey hydrogen, so far — currently, two to three times the cost.

The FT’s Lex column calculated last year that a net zero energy system would create global demand for hydrogen of 500mn tonnes, annually, by 2050 — which would require an investment of $20tn. However, only $29bn had been committed by potential investors, Lex noted, despite some 1,000 new projects being announced globally and estimated to require total investment of $320bn.

Solar power faced similar challenges a decade ago. Thanks to low-cost manufacturing in China and supportive government policies, the sector has grown and is, within a very few years , expected to surpass gas-fired power plant installed capacity, globally. Green hydrogen requires a similar concerted effort. With the right policies and technological improvements, the cost of green hydrogen could fall below the cost of grey hydrogen in the next decade, enabling widespread adoption of the former.

Countries around the world are introducing new and varied incentives to address this gap between the expected demand and supply of green hydrogen. In Canada, for instance, Belgium’s Tree Energy Solutions plans to build a $4bn plant in Quebec, to produce synthetic natural gas from green hydrogen and captured carbon, attracted partly by a C$17.7bn ($12.8bn) tax credit and the availability of hydropower.

Such moves sound like good news for champions of green hydrogen, but companies still need to manage the short-term risks from potential policy and energy price swings. The US Inflation Reduction Act, which offers tax credits of up to $3 per kilogramme for producing low-carbon hydrogen, has already brought in limits , and may not survive a change of government.

Against such a backdrop, how should companies such as Hystar — a Norwegian maker of electrolysers already looking to expand capacity from 50 megawatts to 4 gigawatts a year in Europe — decide where and when to open a North American production facility?

The second factor that will shape hydrogen’s future is how and where it is adopted across different industries. Will it be central to the energy sector, where it can be used to produce synthetic fuels, or to help store the energy generated by intermittent renewables, such as wind and solar? Or will it find its best use in hard-to-abate sectors — so-called because cutting their fossil fuel use, and their CO₂ emissions, is difficult — such as aviation and steelmaking?

Steel producers are already seeking to pivot to hydrogen, both as an energy source and to replace the use of coal in reducing iron ore. In a bold development in Sweden, H2 Green Steel says it plans to decarbonise by incorporating hydrogen in both these ways, targeting 2.5mn tonnes of green steel production annually .

Meanwhile, the global aviation industry is exploring the use of hydrogen to replace petroleum-based aviation fuels and in fuel cell technologies that transform hydrogen into electricity. In January 2023, for instance, Anglo-US start-up ZeroAvia conducted a successful test flight of a hydrogen fuel cell-powered aircraft.

The path to widespread adoption, and the transformation required for hydrogen’s range of potential applications, will rely heavily on who invests, where and how. Backers have to be willing to pay a higher initial price to secure and build a green hydrogen supply in the early phases of their investment.

It will also depend on how other technologies evolve. No industry is looking only to green hydrogen to achieve their decarbonisation aims. Other, more mature technologies — such as battery storage for renewable energy — may instead dominate, leaving green hydrogen to fulfil niche applications that can bear high costs.

As with any transition, there will be unintended consequences. Natural resources (sun, wind, hydropower) and other assets (storage, distribution, shipping) that support the green hydrogen economy are unevenly distributed around the globe. There will be new exporters — countries with abundant renewables in the form of sun, wind or hydropower, such as Australia or some African countries — and new importers, such as Germany, with existing industry that relies on hydrogen but has relatively low levels of renewable energy sourced domestically.

How will the associated social and environmental costs be borne, and how will the economic and development benefits be shared? Tackling climate change through decarbonisation is urgent and essential, but there are also trade-offs and long-term consequences to the choices made today.

Questions for discussion

Lex in depth: the staggering cost of a green hydrogen economy

How Germany’s steelmakers plan to go green

Hydrogen-electric aircraft start-up secures UK Infrastructure Bank backing

Aviation start-ups test potential of green hydrogen

Consider these questions:

Are the trajectories for cost/scale-up of other renewable energy technologies (eg solar, wind) applicable to green hydrogen? Are there features of the current economic, policy, and business landscape that point to certain directions for green hydrogen’s development and application?

Take the perspective of someone from a key industry that is part of, or will be affected by, the development of green hydrogen. How should you think about the technology and business opportunities and risks in the near term, and longer term? How might you retain flexibility while still participating in these key shifts?

Solving one problem often creates or obscures new ones. For example, many technologies that decarbonise (such as electric vehicles) have other impacts (such as heavy reliance on certain minerals and materials). How should those participating in the emerging green hydrogen economy anticipate, and address, potential environmental and social impacts? Can we learn from energy transitions of the past?

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Lessons from Beyoncé on Navigating Exclusion

• Ella F. Washington,
• Hildana Haileyesus,
• Laura Morgan Roberts

The star’s path from CMA Awards backlash to Cowboy Carter is a case study in strategic response.

In 2016, Beyoncé’s performance at the CMA Awards sparked backlash from fans complaining about everything from her attire to her lack of connection to the genre. This year, she released her first country album, which debuted at number one on the Billboard 200. Her actions over the past eight years have been a case study in how to navigate workplace exclusion. As a first step, it often makes sense to exit the conversation and wait for a better moment to respond. Then, work behind the scenes, ideally with collaborators, to push for change. Finally, consider focusing on your own authenticity and strengths to create your own lane within your organization or outside it.

Beyoncé, the globally revered singer, songwriter, and entrepreneur, last month released her new album Cowboy Carter.   However, this project is much more than another musical release from a leading star. It offers a case study in how to navigate workplace exclusion.

• Ella F. Washington  is an organizational psychologist; the founder and CEO of Ellavate Solutions, a DEI strategy firm; and a professor of practice at Georgetown University’s McDonough School of Business. She is the author of  The Necessary Journey: Making Real Progress on Equity and Inclusion  (HBR Press, November 2022) and  Unspoken: A Guide to Cracking the Hidden Corporate Code  (Forbes Books, May 2024). 
• Hildana Haileyesus  is a DEI consultant at  Ellavate Solutions with a background in training and facilitation, client strategy, and research. She has worked across higher education and business and applies a sociological lens to equity-driven change efforts.
• Laura Morgan Roberts is a Frank M. Sands Sr. Associate Professor of Business Administration at the University of Virginia’s Darden School of Business. She is an organizational psychologist and the coeditor of Race, Work and Leadership: New Perspectives on the Black Experience (Harvard Business Review Press, 2019).

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A popular YouTuber's negative video of Humane's AI Pin raises questions about critical reviews in the age of innovation

• This post originally appeared in the Insider Today newsletter.
• You can sign up for Business Insider's daily newsletter here .

Hello there! If you're struggling to decide the foods worth buying organic, best-selling author Michael Pollan has some suggestions for the ones worth splurging on to avoid harmful chemicals .  

In today's big story, we're looking at a critical tech review that caused a bit of a stir on social media .

What's on deck:

Markets: Goldman Sachs quiets the haters with a monster earnings report .

Tech: Leaked docs show one of Prime Video's biggest issues, forcing customers to abandon shows .

Business: The best bet in business these days? Targeting young men who like to gamble .

But first, the review is in!

If this was forwarded to you, sign up here.

The big story

Up for review.

"The Worst Product I've Ever Reviewed… For Now"

Marques Brownlee, the YouTuber better known as MKBHD, didn't mince words with the title of his review of Humane's AI Pin .

In a 25-minute video , Brownlee details all the issues he encountered using the AI device. (Spoiler alert: There were a lot.)

Brownlee's review aligns with other criticisms of the device . But not all of those came from someone with as much sway. His YouTube channel has more than 18 million subscribers.

One user on X pointed that out , calling the review "almost unethical" for "potentially killing someone else's nascent project" in a post reposted over 2,000 times. 

Most of the internet disagreed, and a Humane exec even thanked Brownlee on X for the "fair and valid critiques." 

But it highlights the power of Brownlee's reviews. Earlier this year, a negative video of Fisker's Ocean SUV by Brownlee also made waves on social media . 

Critical reviews in the age of innovation raise some interesting questions.

To be clear, there was nothing wrong with Brownlee's review. Humane's AI Pin costs $700. Watering down his review to ease the blow would be a disservice to the millions of fans relying on his perspective before making such a significant purchase.

Too often, companies view potential customers as an extension of their research and development. They are happy to sell a product that is still a work in progress on the promise they'll fix it on the fly. ("Updates are coming!")

But in a world of instant gratification, it can be hard to appreciate that innovation takes time. 

Even Apple can run into this conundrum. Take the Apple Vision Pro. Reviewers are impressed with the technology behind the much-anticipated gadget — but are still struggling to figure out what they can do with it . Maybe, over time, that will get sorted out. It's also worth remembering how cool tech can be, as Business Insider's Peter Kafka wrote following a bunch of trips in Waymo's software-powered taxis in San Francisco . Sure, robotaxis have their issues, Peter said, but they also elicit that "golly-gee-can-you-believe-it" sense.

As for Humane, America loves a comeback story. Just look at "Cyberpunk 2077." The highly anticipated video game had a disastrous launch in 2020 , but redeemed itself three years later, ultimately winning a major award .

Still, Humane shouldn't get a pass for releasing a product that didn't seem ready for primetime, according to the reviews. 

And its issue could be bigger than glitchy tech. Humane's broader thesis about reducing screen time might not be as applicable. As BI's Katie Notopolous put it: " I love staring at my iPhone ."

3 things in markets

1. Goldman finally strikes gold. After a rough stretch, the vaunted investment bank crushed earnings expectations , sending its stock soaring. A big tailwind, according to CEO David Solomon, is AI spawning " enormous opportunities " for the bank. 

2. Buy the dip, Wedbush says. Last week's drop among tech stocks shouldn't scare away investors , according to Wedbush. A strong earnings report, buoyed by the ongoing AI craze, should keep them soaring, strategists said. But JPMorgan doesn't see it that way, saying prices are already stretched .   

3. China's economy beat analysts' expectations. The country's GDP grew 5.3% in the first quarter of 2024, according to data published by the National Bureau of Statistics on Tuesday. It's a welcome return to form for the world's second-largest economy, although below-par new home and retail sales remain a cause for concern .

3 things in tech

1. Amazon Prime Video viewers are giving up on its shows. Leaked documents show viewers are fed up with the streamer's error-ridden catalog system , which often has incomplete titles and missing episodes. In 2021, 60% of all content-related complaints were about Prime Video's catalog.

2. Eric Newcomer is bringing his Cerebral Valley AI Summit to New York. The conference, originally held in San Francisco, is famous for producing one of the largest generative AI acquisitions ever. Now, it's coming to New York in June .

3. OpenAI is plotting an expansion to NYC. Two people familiar with the plans told BI that the ChatGPT developer is looking to open a New York office next year. That would be the company's fifth office, alongside its current headquarters in San Francisco, a just-opened site in Tokyo, and spots in London and Dublin.

3 things in business

1. America's young men are spending their money like never before. From sports betting to meme coins, young men are more willing than ever to blow money in the hopes of making a fortune .

2. Investors are getting into women's sports. With women like Caitlin Clark dominating March Madness headlines, investors see a big opportunity. BI compiled a list of 13 investors and fund managers pouring money into the next big thing in sports.

3. Bad news for Live Nation. The Wall Street Journal reports that the Justice Department could hit the concert giant with an antitrust lawsuit as soon as next month. Live Nation, which owns Ticketmaster, has long faced criticism over its high fees.

In other news

Blackstone hires Walmart AI whiz to supercharge its portfolio companies .

Taylor Swift, Rihanna, Blackpink's Lisa: Celebrities spotted at Coachella 2024 . 

NYC's rat czar says stop feeding the pigeons if you want the vermin gone .

A major Tesla executive left after 18 years at the company amid mass layoffs .

Some Tesla factory workers realized they were laid off when security scanned their badges and sent them back on shuttles, sources say .

New York is in, San Francisco is very much out for tech workers relocating .

AI could split workers into 2: The ones whose jobs get better and the ones who lose them completely .

Oh look at that! Now Google is using AI to answer search queries .

A longtime banker gives a rare inside look at how he is thinking about his next career move, from compensation to WFH .

Clarence Thomas didn't show up for work today .

What's happening today

Today's earnings: United Airlines, Bank of America, Morgan Stanley, and others are reporting . 

It's Free Cone Day at participating Ben & Jerry's stores. 

The Insider Today team: Dan DeFrancesco , deputy editor and anchor, in New York. Jordan Parker Erb , editor, in New York. Hallam Bullock , senior editor, in London. George Glover , reporter, in London.

Watch: Nearly 50,000 tech workers have been laid off — but there's a hack to avoid layoffs

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