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Success in the $8.1 billion ready-to-eat cereal industry depends largely on new products, probably more so than any other supermarket category. After all, no other category can claim more than 200 individual brand names.

By that measure, Kellogg USA has been a big success for the last two years. Nearly every new cereal product it's launched has been a winner, topped by the 1993 introduction of Rice Krispies Treats.

Under the stewardship of Carlos Gutierrez, exec VP-marketing, and Dave Vroom, VP-new products, Kellogg took a 50-year-old idea-the treat recipe on every box of Rice Krispies-and turned it into a new cereal.

Initial reception from retailers and consumers was so strong, Kellogg was caught flat-footed and had to apologize for product shortages in newspaper ads around the country. Kellogg also delayed the launch of introductory advertising, from Leo Burnett USA, Chicago, until it had production lines up to speed.

But once supplies were available, sales really took off. Rice Krispies Treats sold $87 million in its first year, giving it a 1.1% share of the cereal category, according to Information Resources Inc. figures for the year ending April 24.

The '93 hit joins Kellogg's impressive list of new-product successes, including Kellogg's Low-Fat Granola cereal, a 1992 introduction that also claims a 1% share.

Mr. Gutierrez has been at the helm as Kellogg revamped its product development system and also has overseen the company's aggressive marketing: He helped shape the "Breakfast Around the World" promotional program with NBC-TV (see Page S-26), was the key contact in working with ConAgra to develop Kellogg's new Healthy Choice cereals and spurred Kellogg's new value message in TV and print ads.

Well-liked internally and well-respected in the industry, Mr. Gutierrez still has a major task in front of him: Despite new-product success, Kellogg's corporate share of the cereal category, though still No. 1, remains flat.

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