Kellogg pounces on toddlers

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In the first serious challenge to General Mills' $500 million Cheerios juggernaut, Kellogg is launching a toddler cereal dubbed Tiger Power.

The cereal, to arrive on shelves in January, will be endorsed by none other than Frosted Flakes icon Tony the Tiger and will be "one of our biggest launches next year," according to Kellogg spokeswoman Jenny Enochson. Kellogg will position the cereal-high in calcium, fiber and protein-as "food to grow" for the 2-to-5 set in a mom-targeted roughly $20 million TV and print campaign that begins in March from Publicis Groupe's Leo Burnett, Chicago.

General Mills has long had a lock on the first-finger-food positioning for its No. 1 Cheerios brand. Its sales totaled $525 million for both regular Cheerios and Honey Nut varieties in the food, drug and mass outlets excluding Wal-Mart that Information Resources Inc. tracks for the 52 weeks ended Oct. 31. Cereal category leader Kellogg is banking on Tiger Power's nutritional profile as well as the friendly face of its tiger icon, a new shape and a supposed "great taste with or without milk" to make a big showing in take-along treats for tots.

Kellogg's lightly sweetened whole-grain wheat O's differ from Cheerios by having three O's form a triangle-shaped piece. Plans call for major in-store demonstrations.

Retailers vary on whether the more kid-targeted Tiger Power can make a dent in the all-family Cheerios brand.

"I don't see it hitting Cheerios in terms of sales volume," said one West Coast retail executive, noting, however, that Kellogg's use of Tony the Tiger's picture on the box definitely shows "they're serious about this." One Midwest retail buyer offered that "It will be a big hit," and another said, "It tastes good and that's always a start," adding that Kellogg's track record with new products recently has been good.

government sanction

To gain incremental volume and reach its goal of making Tiger Power a top 10 cereal brand, Kellogg will push to get the cereal on the list of sanctioned nutritious products for the USDA's special supplement nutrition program for low-income women, infants and children (WIC). General Mills' entries (like Cheerios) have been better represented in WIC, according to an executive close to Kellogg. One Midwest retail executive noted that manufacturers on the list definitely see an increase in volume.

Tiger Power is Kellogg's further step toward offering more nutritious kid fare following the launch earlier this year of 1/3-less-sugar varieties of its Froot Loops and Frosted Flakes. By all accounts, those varieties are hardly setting the world on fire but retailers have not yet discontinued them. While General Mills has said it plans to convert its cereal lineup to whole grain in preparation for the upcoming shift in the USDA's food-pyramid guidelines, Tiger Power is Kellogg's first step toward the whole-grain movement.

Kellogg leads the $6 billion cereal category with a 33.5% share compared to General Mills' 31.5% share, for the Oct. 31 time period, according to IRI. Kellogg's Frosted Flakes is the No. 2 brand behind the base Cheerios line, with sales of $241.5 million. Kellogg plans to promote and advertise Tiger Power along with Frosted Flakes, recent creative for which has billed the cereal (and its Tony the Tiger mascot) as helping active kids be their best with the tagline, "Earn your stripes."

Tiger Power, like much of Kellogg's cereal portfolio, will be packaged in a 10 oz. box that retails for the same $3.49 suggested price as General Mills' 15 oz. boxes.

General Mills spent $40 million on Cheerios in 2003 and $16.2 million on the brand the first six months of the year, according to TNS Media Intelligence/CMR. Kellogg spent $7.3 million on Frosted Flakes in 2003 and $7 million on the brand for January through July of this year.

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