CHICAGO (AdAge.com) -- The Food and Drug Administration is going after a claim that has been the center of Cheerios' marketing campaign for two years -- and backed with tens of millions of dollars in spending -- but in the end, it could be the FDA that loses.
The agency warned General Mills of "serious violations" arising from Cheerios' cholesterol-reduction claims. In its letter to General Mills last week, the FDA pointed to the claim that eating Cheerios can lower cholesterol 4% in six weeks. The FDA's stance might not only have immediate financial and marketing implications for General Mills, but could also result in a ripple effect for other marketers mulling specific health claims.
Big G wouldn't discuss the letter beyond a statement that indicates it will fight. "The scientific body of evidence supporting the heart health claim was the basis for FDA's approval of the heart health claim, and the clinical study supporting Cheerios' cholesterol-lowering benefit is very strong," Mr. Forsythe said. "We look forward to discussing this with FDA and to reaching a resolution."
But so far, public sentiment is on the cereal's side. Cheerios is one of the most beloved brands in the entire food industry -- and among the most trusted. Noted one health-care ad executive: "They're messing with a brand that parents put on their kids' high chairs."
'FDA got it wrong'
"It think the FDA got it wrong on this one," supermarket expert Phil Lempert said. He pointed to the inevitable chest pounding associated with a new administration and FDA leadership. "To go after a major brand like Cheerios is [for] headlines that say to everybody 'We're doing our job,'" Mr. Lempert said.
The company is currently working with the FDA to assess what changes need to be made to packaging. However, it's too soon to determine what those changes will be. Mr. Lempert said any changes are likely to cost General Mills "millions and million of dollars." Packaging is, of course, the most expensive component of most food products, and redesigns are expensive, even if product doesn't have to be pulled from shelves. It's also likely the ads would have to be retooled should the FDA prevail, though it's possible only the 4% figure could be fudged in the campaign. General Mills' agencies include Saatchi & Saatchi, New York, and Campbell Mithun, Minneapolis.
Even if the company is forced to scrap the claim, Lynn Dornblaser, director of consumer package goods insight at Mintel, a global consumer, market and product research firm, said it's not like consumers will change their minds about Cheerios or forget the messages they've seen in recent years. "They've gotten the message out already," she said. "The specific language has done what it needs to do." After all, Ms. Dornblaser noted, such an FDA complaint is not going to convince consumers that whole grains are bad for them. And changes to packaging, including specific health claims, may capture consumer interest for awhile, but after that, Ms. Dornblaser said, "it becomes wallpaper."
King of the cereal aisle
Indeed, Cheerios brands rule the cereal aisle. According to Information Resources Inc., a Chicago-based market-research firm, the yellow-box classic rang up $323 million in grocery sales for the 52 weeks ended April 19. It's now running behind Honey Nut Cheerios, with $332 million. All told, sales for the Cheerios franchise, including Honey Nut, Multigrain and fruit-flavored Cheerios, totaled $695 million over the same period. IRI data does not include Wal-Mart or club stores.
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General Mills began making the 4% cholesterol-reduction claim associated with Cheerios two years ago. During that time, according to TNS Media Intelligence, the brand has spent about $89 million in measured media. Yellow-box Cheerios has grown share in recent years, but not considerably. According to IRI, Cheerios rang up $301 million in retail sales in 2004, with 4.75% of cereal sales, compared to 4.89% presently.
The FDA has appeared more active on the food front of late. In April, it announced that it had warned -- and promptly settled with -- Kellogg Frosted Mini-Wheats. The brand asserted in its marketing that the product enabled children to be 20% more attentive than those who hadn't eaten breakfast.
Bruce Silverglade, legal director of the Washington-based Center for Science in the Public Interest, said claims such as Cheerios' 4% message have been prohibited since 1993, as part of the Nutrition Labeling and Education Act. Now, he said, the new administration is sending a message that enforcement will be tougher. "They're signaling the rest of the industry that the agency is not going to let a big market leader get away with it and won't let anybody else get away, either," he said.
Dissent within FDA?
Still, it seems there is some dissent about this warning even inside the FDA. Peter Pitts, a former FDA associate commissioner, said he spoke to two senior FDA officials who said they had not seen the warning letter until it became public. The letter originated from the FDA's Minneapolis field office. "They did not know, they were upset and said this was a field office that was freelancing," said Mr. Pitts, now director-global health care, Porter Novelli. "That being said, what upset FDA most about this is it makes them look foolish."
In an e-mail, an agency spokeswoman said that FDA "warning letters speak for themselves," and declined to comment further.