But even as cereal makers leverage their vast global marketing
budgets to spur growth, they are finding that breakfast is still
influenced by local customs. Indeed, the toughest competition might
be from breakfast foods that have been in place for centuries, like
a watery rice gruel called congee in China. "Breakfast around the
world is probably the meal that is most rooted in tradition," said
Gannon Jones, chief marketing officer for PepsiCo's Global
And even when foreign consumers eat cereal, they often eat it
differently than Americans do.
In Spain, for instance, Kellogg has found that people like to
dump All-Bran cereal into their coffee, so the marketer is now
advertising it that way. In France, the company has formulated its
Kellogg's Extra brand to go with yogurt, while it shows the brand
with hot milk across Europe, where cold milk is a less popular
pairing. In India, Corn Flakes with saffron is planned.
The strategy looks "at how we can adapt our foods to the local
habit, as opposed to trying to change the local breakfast habit,"
Kellogg CEO John Bryant told Wall Street analysts earlier this
year. Leo Burnett handles brand support in North America, Europe
and Latin America, while JWT has Asia Pacific.
To be sure, the cereal business remains rooted in the U.S.,
Canada, U.K. and Australia, which together account for 54% of
global consumption despite having just 6% of the population,
according to Switzerland-based Cereal Partners Worldwide, which
operates in more than 130 countries. But in the U.S. -- where
yogurt is taking hold as a breakfast option -- cereal will grow by
just 3.6% from 2011-2016, compared with 38% in China and 108% in
India, according to a Euromonitor forecast.
Although Quaker has only an 8.9% cereal share globally according
to Euromonitor, it dominates hot cereals, which could give it an
edge in some markets. In China, for instance, hot cereal holds 54%
of the cereal market, compared with 11% in the U.S. In other key
markets cold cereal holds the advantage, such as in Brazil, where
it accounts for 74% of the cereal market.
Quaker is seeking to boost its international prospects with a
new global identity that positions its oatmeal as "healthy fuel," a
more universal message than the heart and cholesterol health claims
the brand had been making for the past 15 years.
"We became fixated on a narrowly targeted, functional message.
We started to lose relevance," said PepsiCo's Mr. Jones, whose
Global Nutrition Group is leading the initiative. "Consumers all
around the world -- whether you are in China, India, U.S., U.K. --
there's a timeless, universal truth that drives all of them: this
notion that starting my day off right sets me up to be my best. And
what we also discovered is energy, or lack of energy, is the
greatest unmet need."