Kellogg to Launch Origins Cereal Amid Category Slump
Kellogg Co., long known for its colorful cereal marketing, is going back to basics with the launch of a brand called Origins. The product will be sold under the Kellogg's master brand name and will come in varieties such as muesli, "ancient grains" and granola.
The new offering comes as Kellogg struggles to grow its cereal brands in the midst of changing consumer eating habits and new breakfast competition from products such as yogurt. Kellogg, like most big packaged food companies, is putting a new emphasis on simpler ingredient lists as consumers shy away from heavily processed foods.
Origins will launch mid-year, according to a Kellogg presentation delivered on Wednesday at the Consumer Analyst Group of New York annual meeting in Boca Raton, Fla. The company described the brand as "real food prepared simply" made with "ingredients you can see and pronounce."
"We believe this is exactly where the category needs to lean into," said Paul Norman, Kellogg's chief growth officer. Competing brands have also jumped on the trend. Cheerios, for instance, recently launched its own "ancient grains" variety that includes puffed spelt and kamut wheat.
Total cereal category sales in the U.S. fell 3.8% to $8.9 billion in the 52 weeks ending Jan. 25, according to IRI. Kellogg fared worse, with its sales dropping 5.4% to about $2.7 billion, according to IRI.
A big source of the company's woes comes from its struggling Special K brand. The company is seeking to fix the longtime cereal stalwart with new positioning that emphasizes "wellness" rather than touting the cereal as a brand for dieting, as it had been doing. The old method no longer works because consumers are less interested in "an absence of negatives" and care more about what is in the actual food, executives said.
In recent years, seven out of every 10 dollars Kellogg invested in Special K has gone to selling diet plans. But going forward, eight of 10 dollars will be spent "selling the food, selling the taste of our foods, selling why our food is good," Mr. Norman said.
Kellogg also recently launched a new digital platform called openforbreakfast.com that is meant to encourage a "two-way diaglogue" with consumers about "nutrition, sustainability and community, in a completely transparent way," Mr. Norman said. The site, which launched in January, is meant to answer consumer questions using videos, infographics and interviews with Kellogg employees.
"People expect more from the brands they buy and they expect more from the companies that make those brands. This is an initiative in the U.S. that we'll roll out globally as we go forward to engage more with consumers on a platform of transparency," Mr. Norman said.
But Kellogg will still keep some frivolity in its marketing. Cereal "has always been about and will always be about fun at its core," Mr. Norman said. To that end, Kellogg recently launched a "Frozen" cereal licensed from the popular Disney movie property. The brand is "doing extremely well for us," Mr. Norman said.