Cereal: Big G extensions continue to challenge former leader Kellogg

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Cereal marketers, searching for a way to drive stagnant sales, are reinventing their products and marketing.

General Mills in early August launched a new line of single-serve pouches dubbed Chex Morning Mix, vitamin-fortified morning mixes (in Fruit & Nut, Cinnamon and Honey Nut varieties) that are intended to offer a nutritious breakfast alternative. The line is designed to appeal to on-the-go consumers who have steered clear of boxed cereal because of its lack of portability.

Big G, the nation's No. 1 cereal marketer with 32.4% of the market, has seen great success extending its Chex cereal brand into the snack aisle. The current introduction follows that of Chex Mix. The Morning Mix launch is receiving heavy TV support from Interpublic Group of Cos.' Campbell Mithun, Minneapolis.

The pouches follow on the heels of Big G's launch last year of Milk n' Cereal Bars, portable versions of three of its top cereal brands-Cinnamon Toast Crunch, Honey Nut Cheerios and Chex-with milk.


Success with convenience offerings has eluded No. 2 player Kellogg Co. at 30.8% share of market. Kellogg has seen the demise over the last two years of its Breakfast Mates combination milk and cereal kits and, more recently, of its line of Snack 'ums-larger, sweeter versions of Froot Loops and Corn Pops, among others.

But Kellogg is far from giving up. In early September, Kellogg signed a multiyear agreement with Walt Disney Co. to develop co-branded Kellogg/Disney breakfast foods including cereal, waffles and toaster pastries. Although Kellogg has often tied in with entertainment properties for limited-edition cereals based on current movies, the new permanent Disney items "have huge potential in the marketplace," says Jeff Montie, president of Kellogg's Morning Foods division. He adds "the deal allows us to continue to run major promotions every year with Disney across our portfolio."

The Kellogg/Disney co-brand launches, expected in early 2002, will be supported with extensive media from Bcom3 Group's Leo Burnett Worldwide.

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