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Kellogg's Nutri-Grain Market Analysis

Kellogg's had worldwide sales of almost $11 billion in 2006 and was Britain's biggest grocery brand in 2007 with over £550 million in sales. It produces ready-to-eat cereals and nutritious snacks that are household names around the world, including brands like Rice Krispies, Special K, and Nutri-Grain. Kellogg's commitment to corporate social responsibility means its business aims promote healthy living. The company divides its market into six segments including cereals for starting the day, wholesome options, those for shape management, and kid and mum approved brands. Originally designed to provide a portable breakfast, Nutri-Grain became immediately successful after its 1997 launch but later faced competition that slowed its

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119 views1 page

Kellogg's Nutri-Grain Market Analysis

Kellogg's had worldwide sales of almost $11 billion in 2006 and was Britain's biggest grocery brand in 2007 with over £550 million in sales. It produces ready-to-eat cereals and nutritious snacks that are household names around the world, including brands like Rice Krispies, Special K, and Nutri-Grain. Kellogg's commitment to corporate social responsibility means its business aims promote healthy living. The company divides its market into six segments including cereals for starting the day, wholesome options, those for shape management, and kid and mum approved brands. Originally designed to provide a portable breakfast, Nutri-Grain became immediately successful after its 1997 launch but later faced competition that slowed its

Uploaded by

rajan4raj
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd

In 2006, Kellogg's had total worldwide sales of almost $11 billion (£5.5 billion).

In 2007, it was
Britain’s biggest selling grocery brand, with sales of more than £550 million. Product lines
include ready-to-eat cereals (i.e. not hot cereals like porridge) and nutritious snacks, such as
cereal bars. Kellogg’s brands are household names around the world and include Rice Krispies,
Special K and Nutri-Grain, whilst some of its brand characters, like Snap, Crackle and Pop, are
amongst the most well-known in the world.

Kellogg's has achieved this position, not only through great brands and great brand value, but
through a strong commitment to corporate social responsibility. This means that all of Kellogg’s
business aims are set within a particular context or set of ideals. Central to this is Kellogg’s
passion for the business, the brands and the food, demonstrated through the promotion of healthy
living.

The market

The company divides its market into six key segments. Kellogg's Corn Flakes has been on
breakfast tables for over 100 years and represents the ‘Tasty Start’ cereals that people eat to start
their day. Other segments include ‘Simply Wholesome’ products that are good for you, such as
Kashi Muesli, ‘Shape Management’ products, such as Special K and ‘Inner Health’ lines, such as
All-Bran. Children will be most familiar with the ‘Kid Preferred’ brands, such as Frosties, whilst
‘Mum Approved’ brands like Raisin Wheats are recognised by parents as being good for their
children.

Nutri-Grain was originally designed to meet the needs of busy people who had missed breakfast.
It aimed to provide a healthy cereal breakfast in a portable and convenient format. Many
products do well when they are first brought out and Nutri-Grain was no exception. From launch
in 1997 it was immediately successful, gaining almost 50% share of the growing cereal bar
market in just two years. Nutri-Grain’s sales steadily increased as the product was promoted and
became well known. It maintained growth in sales until 2002 through expanding the original
product with new developments of flavor and format. This is good for the business, as it does not
have to spend money on new machines or equipment for production. The market position of
Nutri-Grain also subtly changed from a ‘missed breakfast’ product to an ‘all-day’ healthy snack.
Successful products attract other competitor businesses to start selling similar products. This is
the time of maximum profitability, when profits can be used to continue to build the brand.
However, competitor brands from both Kellogg's itself (e.g. All Bran bars) and other
manufacturers (e.g. Alpen bars) offered the same benefits and this slowed down sales and
chipped away at Nutri-Grain’s market position. Kellogg's continued to support the development
of the brand but some products (such as Minis and Twists), struggled in a crowded market.
Although Elevenses continued to succeed, this was not enough to offset the overall sales decline.
By mid-2004 Nutri-Grain found its sales declining whilst the market continued to grow at a rate
of 15%. Clearly, at this point, Kellogg's had to make a key business decision. Sales were falling;
the product was in decline and losing its position. Should Kellogg's let the product ‘die’, i.e.
withdraw it from the market, or should it try to extend its life?

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