The breakfast food choices of Millennials have been a hot topic this year, so the revelation that almost half of the generation of young Americans don’t like cereal is fitting. It is, however, surprising that the reason most Americans don’t like cereal is due to the inconvenience of cleaning up afterwards.
This disinterest has deeply damaged the profitability of cereal giant Kellogg’s, who are also embroiled in a damaging struggle with news website Breitbart News. The feud began when Kellogg’s made the decision to retract its advertising from the right-wing website, citing a clash of values. In an unusual (and ominous) move, the website, which is aligned with President Trump, retaliated by calling for a boycott of the cereal company. The #DumpKelloggs petition caused a 75% decline in social media sentiment, a massive drop which had an evident effect on the brand’s image and sales.
Although Kellogg’s is the worst affected brand, this is an escalation of a general trend in cereals. Cereal consumption started to decline in the 1990s and has been continually re-marketed, as snack foods or as edible nostalgia, to no avail. Although Kellogg’s took positive steps to appeal to the Millennial market, their shares and profit margins have not been stabilised.
The latest blow came when Financial company Credit Suisse reclassified their rating of Kellogg’s from “Outperform” to “Neutral” due to its inability to engage young consumers. This downward trend has also been seen in Australia, where the younger consumers’ are increasingly demanding healthier breakfast options.
However, Kellogg’s Australia is still the biggest cereal maker in the country, mostly thanks to Nutri-grain. As with the USA, the biggest consumers are not young people but those 65 years and older. Kellogg’s Australia has managed to stave off a decline in profitability by increasing their supply of healthy cereals. It remains to be seen how much impact the situation with the Kellogg’s headquarters will have upon its Australian counterpart.