Kellogg has had few new-product winners of late and appears to be trying to extend its larger brand names with new items. Last year, the company rolled out Honey Crunch Corn Flakes.
That assignment went to J. Walter Thompson USA, New York, rather than regular Corn Flakes shop Leo Burnett USA, Chicago, and was given media weight commensurate with the debut of a wholly new product.
Cocoa Frosted Flakes is being handled by Burnett, agency for regular Frosted Flakes.
Industry analysts said the latest product comes none too soon for Kellogg, whose share is in "long-term decline," according to analyst Bill Leach of DLJ Securities. "U.S. revenues were down 20% in the third quarter, which is one of the biggest declines for any of the food companies." One reason, said Mr. Leach, is that their products-such as Raisin Bran and Corn Flakes-"are more commodity-oriented" than some of the competition's.
According to Information Resources Inc., Kellogg's share of the $7.6 billion ready-to-eat cereal category for the year ended Nov. 17 was 33.9%, compared to 27.7% for General Mills and 16.2% for Kraft Foods' Post.
Frosted Flakes is the country's leading cereal brand, with $302.4 million in sales and a 4% market share. But its sales dropped 10% for the period ended Nov. 17.