Kellogg (K) Introduces New Flavor to Revive Cereal Sales
Kellogg Company K is launching a new flavor of cereal under the Kellogg's Frosted Flakes brand. The latest Kellogg's Chocolate Frosted Flakes has been developed in collaboration with the company’s consumers.
To ensure the latest flavor meets consumer expectations, Kellogg ensured consumer participation in almost every step of the development process of Chocolate Frosted Flakes by “testing how different cocoas interacted with the cereal flake and the milk left at the bottom of the bowl.”
Kellogg’s mainstay U.S. cereal business, which accounts for 40–45% of sales, has been performing poorly since 2012 due to sluggish category growth. Revenues at the U.S. Morning Foods segment, which includes cereals, slipped 6.5% in the first six months of 2017.
Lower demand for cereals due to competitive pressure from other breakfast alternatives, including yogurt, eggs, bread and peanut butter, has been hurting category growth. Moreover, changing consumer preference toward healthier products has hurt sales of Kellogg’s along with that of other food giants like General Mills, Inc. (GIS, B&G Foods, Inc. BGS and Mondelez International, Inc. MDLZ.
The latest addition is expected to boost cereal demand to some extent. The company is making aggressive efforts to improve its product line. It is channeling funds toward product and packaging innovation as well as reformulation of many existing products to meet the rapidly changing taste of consumers pertaining to health and wellness.
This apart, Kellogg’s is focused on its restructuring program (Project K) to drive growth and profitability. The program aims to optimize the supply chain, improve productivity and bring a new global focus on categories. The company also started an aggressive zero-based budgeting program in 2015 in its North American business to generate savings in addition to that from Project K.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
B&G Foods, Inc. (BGS) : Free Stock Analysis Report
Kellogg Company (K) : Free Stock Analysis Report
Mondelez International, Inc. (MDLZ) : Free Stock Analysis Report
General Mills, Inc. (GIS) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
