Jun 5 - 6 Breakfast Cereals Americans No Longer Love

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 7 years ago '04        #1
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MGz 953 heat pts953
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Jun 5 - 6 Breakfast Cereals Americans No Longer Love
 

 

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These are 24/7 Wall St. Breakfast Cereals Americans No Longer Love.

1. Special K
> Company: Kellogg
> Year Introduced: 1956
> 52-Week Sales Through April: $88.9 million
> Pct. Change During That Period: -1.4%
> Pct. Change Sales 2007-2010: -15.9%


One of the first diet foods. It's still a good way to start your day on the right track — nutritionally speaking. Too bad that it is elbowing for attention in a very crowded market.

2. Corn Pops
> Company: Kellogg
> Year Introduced: 1951
> 52-Week Sales Through April: $73.8 million
> Pct. Change During That Period: -19%
> Pct. Change Sales 2007-2010: -12.8%


Corn Pops are a tough sell these days. Parents — smart ones anyway — are not thrilled if their children ingest sugary cereals. Adults don't want them either because they are not healthy with 117 calories and 14.8 grams of sugar.

3. Rice Krispies
> Company: Kellogg
> Year Introduced: 1928
> 52-Week Sales Through April: $121.5 million
> Pct. Change During That Period: -8.7%
> Pct. Change Sales 2007-2010: -10.3%


Snap, Crackle and Pop are among the most recognized brand icons in history. The product has morphed from a health food to a snack food product. It's kind of tough to argue that something that's an ingredient in delicious snacks is healthy.

4. Raisin Bran
> Company: Kellogg
> Year Introduced: 1926
> 52-Week Sales Through April: $115.1 million
> Pct. Change During That Period: -8.4%
> Pct. Change Sales 2007-2010: -7.9%


Raisin Bran is the victim of its own success, which has spawned legions of knock-off brands. Many of them are made by private makers and sold for a fraction of the cost of the real thing. Cash-strapped consumers probably can't tell the difference.

5. Cheerios
> Company: General Mills
> Year Introduced: 1941
> 52-Week Sales Through April: $282.9 million
> Pct. Change During That Period: -3.86%
> Pct. Change Sales 2007-2010: -6.9%

Cheerios has been the part of the diets of babies and toddlers for generations. Birth rates have fallen, however, as the economy went south. Moreover, the market for healthy cereals has exploded in recent years, further pressuring the venerable brand.

6. Corn Flakes
> Company: Kellogg
> Year Introduced: 1894
> 52-Week Sales Through April: $107.5 million
> Pct. Change During That Period: -5.86%
> Pct. Change Sales 2007-2010: -3.8%


Originally developed in 1894 by Dr. John Harvey Kellogg, the superintendent of the Battle Creek Sanitarium, as a way to promote the benefits of a vegetarian diet, it's an American classic like apple pie that is facing hard times because of the growth of private label brands.
Also, it's being undermined by newer, organic brands.
The average American spends about 13 minutes a day preparing and eating breakfast, the meal nutritionists consider to be the most important of the day, according to NPD Group. Increasingly, people are eating less cold cereal, which has been part of breakfast for more than 100 years.

Sales of ready-to-eat cereals fell 2.55% in the 52 weeks ending April 17 to $6.41 billion, according to data from Symphony/IRI which covers retail outlets such as supermarkets. Sales of cheap, private label cereals dropped 7.2% to $637.5 million during that same time frame. Sales and units shipped have been lackluster since at least 2007, predating the Global Recession and the recent rise in grain prices. This represents a change in fortunes for Kellogg Co. (NYSE: K - News), General Mills Inc. (NYSE: GIS - News) Ralcorp Holdings Inc. (NYSE: RAH - News), parent of Post, and Quaker Oats owner PepsiCo Inc. (NYSE: PEP - News).

Six cereal brands have been hit particularly hard by American's changing breakfast tastes. These include Kellogg's Corn Flakes, Cheerios, Raisin Bran, Rice Krispies, Corn Pops, and Special K. Sales of some of these brands fell by double digits between 2007 to 2010, and those declines have continued in the most recent period measured by Symphony/IRI.

"In the 1980s and the first half of the 1990's, the RTE (ready-to-eat) cereal industry was one of the most profitable of all food manufacturing industries, with profits averaging 17 percent of sales," according to a 2000 report from the USDA. "Consumers' consumption of RTE cereals declined in the early 1990's because of the high prices of name-brand cereals and the rising popularity of convenient breakfast foods such as bagels and toaster pastries."

These struggles continue.

Indeed, Dean Foods (NYSE: DF - News) CEO Gregg Engles recently blamed "soft" milk sales partly on a "a weak cereal category, which drives roughly 30% of milk use." The company is the largest U.S. processor and distributor of milk.

Cereal would seem like one of the most recession-resistant meals because it's fairly cheap and easy to prepare. S&P equity analyst Mark Graves, for one, said he was surprised by the softness in sales, which he doesn't believe is attributable much to restrictions on marketing food to children that the food industry implemented several years ago. Volume and sales should remain soft for at least the rest of the year, he added.

"I would expect cereal to be doing better," he says.

Cereal is under a.ssault from many quarters. Government officials want to further restrict the use of cartoon characters such as Toucan Sam to sell sugary cereals because of concerns about soaring rates of childhood obesity. Companies have been reducing the amount of sugar in their products. They are also selling them in other ways such as breakfast bars, sales of which are soaring.

Much to the horror of nutritionists, the popularity of egg-based breakfast sandwiches is surging. It remains unclear how much this eats into cereal sales, however, since some people apparently eat a small breakfast at home and eat a "snack" like an Egg McMuffin later in the morning. What it does illustrate is the power of a convenient food item to drive sales at restaurants, which have seen breakfast sales remain strong throughout the economic downturn.

"The easiest way to prepare that meal is a power window," says Harry Balzer, chief industry analyst with NPD Group, in an interview.

When 24/7 Wall St. decided to compile a list of the cereals with the weakest sales growth, it found a few bright spots. General Mills, for instance, has a hit with Multi-Grain Cheerios. Symphony/IRI estimates that sales of the healthy cereal rose 11.62% to $107.4 million in the recent 52 week period, the biggest gain of any ready-to-eat cereal listed by the market research firm. Another General Mills product, Cinnamon Toast Crunch, gained 7.5% to $196.9 million. Both products have seen gains for the past few years. Sales at the diversified food company's Retail Business, which includes cereal, are struggling. Net sales and operating profit fell by more than 1% each. A General Mills spokesperson said the company was in an earnings quiet period and was unable to comment for this story.

Kellogg, the largest cereal company, isn't faring as well. Kellogg's Frosted Flakes, for instance, rose 1% to $246.7 million in the 52 weeks ending April 17, while sales of such stalwarts as Fruit Loops, Raisin Bran and Special K fell in the single digits. Sales of Kellogg's Corn Pops dropped 19% to $73.9 million. Kris Charles, a spokeswoman for Battle Creek, Michigan-based Kellogg, told 24/7 Wall Street that the Symphony/IRI data is misleading because it does not include its biggest customer, Walmart, or club stores such as Costco.

"Ready-to-eat cereal is a robust category; it's trusted by moms, great tasting, nutritious, convenient and on trend," she writes in an email, adding that ready-to-eat cereal accounts for about 50% of global net sales as it has for several years. When Kellogg reported first quarter earnings on May 4, 2011, the company increased its full-year 2011 internal net sales growth guidance to approximately 4 percent." She did not mention that Kellogg's earnings missed Wall Street estimates.

Indeed, many investors are bullish on the cereal makers, though not necessarily the product itself. Shares of Kellogg are up about 11% this year, as is General Mills. Ralcorp, which also makes private label cereals, is up 35% during the same time, buoyed by an unsolicited takeover bid from ConAgra Foods Inc. (NYSE: CAG - News). It acquired Post from Kraft Foods for $2.6 billion in 2007 and the business is under-performing. Sales of branded cereal fell 10% during the most recent quarter, the only Ralcorp business to do so. Volumes were off 14%. The unit, Ralcorp's most profitable, saw a 1% gain in segment profit because of cost cutting.

Post Honey Bunches of Oats, one of its flagship brands, fell 11.69% to $271.2 million in the April 52-week period, Symphony/IRI says. St. Louis-based Ralcorp said during its recent earnings conference call that sales of the product "grew revenue" by 8% in the quarter. A company spokesperson could not be reached for comment on the discrepancy. It plans to continue to improve its product pipeline.

[pic - click to view]

 breakfast-cereals-declining-popularity-247: Personal Finance News from Yahoo! Finance


Last edited by MGz; 06-05-2011 at 11:52 AM..

99 comments for "Jun 5 - 6 Breakfast Cereals Americans No Longer Love"

 7 years ago '10        #2
Trill Livin 65 heat pts65
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man rice krispies used to be the sh*t ...All bout that captain Crunch now
 06-05-2011, 12:07 PM         #3
Jets Fool 
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 yaboyantonio said:
man rice krispies used to be the sh*t ...All bout that captain Crunch now

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 7 years ago '05        #4
240sx 
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 Jets Fool said:

[pic - click to view]



Those berries were good but all sugar...
 7 years ago '10        #5
smokinthe420 4 heat pts
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Raisin bran is crack... But not as good as captain crunch thou
 7 years ago '04        #6
badboy600 15 heat pts15
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I used to eat cinnamon toast crunch right out the box. fu*k the bowl & milk
 06-05-2011, 12:18 PM         #7
spactn 
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i just think people dont like corn pops as much cuz some where along the line they changed what it taste like. or just added that coat of sugar. either way i know i aint trippin they changed it a long time ago but i remember not buying it anymore cuz it wasnt as good.
 7 years ago '04        #8
fkucdaw0rld 
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i'll stick to my honey nut cheerios, honey bunches of oats, and froot loops...throw some raisin bran crunch in there and some cocoa rice krispies and im set
 7 years ago '04        #9
DERRTY CHYBO 12 heat pts12
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Raisin Bran >>>
 7 years ago '05        #10
Fresh|B 977 heat pts977
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I Only Buy Corn Pops, Applejacks, and HoneyCombs.
 7 years ago '04        #11
notoriousthugzz 41 heat pts41
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haven't eaten cereal in years..
 7 years ago '08        #12
AC_89 200 heat pts200
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I still fu*k with corn pops but not like how i used too
 7 years ago '04        #13
krispie333 1 heat pts
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i've never been into any of those.
 7 years ago '06        #14
01seay 83 heat pts83
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 spactn said:
i just think people dont like corn pops as much cuz some where along the line they changed what it taste like. or just added that coat of sugar. either way i know i aint trippin they changed it a long time ago but i remember not buying it anymore cuz it wasnt as good.
Yea, we use to buy it all the time..they definitely changed the taste.
 7 years ago '09        #15
Zaosyn 261 heat pts261
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fu*k outta here

Special K is ALWAYS on my grocery list and I still eat corn pops and Raisin Brand :dancingcool:
 06-05-2011, 12:34 PM         #16
IronMaiden 
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5. Cheerios
bull fu*king sh*t, i don't know one person that doesn't have a box of cheerios in his/her kitchen, same with raisen brain and special k.

those things sell like hotcakes, who came up with this list? bullsh*tter mc bullsh*t sh*tter bull?
 7 years ago '05        #17
Nyse03 14 heat pts14
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Thats bcuz theres no freakin money to buy the sh*t nomore...if unemployment is rising then there should be less consumption...am i reachin?



But then again...i didnt even read da sh*t
 7 years ago '10        #18
Heredia24d 4 heat pts
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I use to love Cheerios, it'd all about them Frosted Flakes now.
 7 years ago '06        #19
allstarookie 1 heat pts
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 badboy600 said:
I used to eat cinnamon toast crunch right out the box. fu*k the bowl & milk
same here
 7 years ago '04        #20
Exs 153 heat pts153
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 IronMaiden said:
bull fu*king sh*t, i don't know one person that doesn't have a box of cheerios in his/her kitchen, same with raisen brain and special k.

those things sell like hotcakes, who came up with this list? bullsh*tter mc bullsh*t sh*tter bull?


Honey Nut >

:doglaugh: at " raisen brain " though.


Last edited by Exs; 06-05-2011 at 05:39 PM..
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