BATTLE CREEK, MICH. — The Kellogg Co. has identified a “small” weakness in its product portfolio that it plans to address during the next few years.
|Paul Norman, president of Kellogg North America.|
“We under index relative to our competitors in terms of the amount of food we sell, in snacks in particular, in single-serve sizes,” said Paul Norman, president of Kellogg North America, during a presentation Nov. 20 at the company’s annual investor’s day. “That’s an opportunity gap that we think we can go after big time in the next three, four years.”
Deanie Elsner, president of U.S. Snacks, said Kellogg has been successful at growing its brands in big-box stores, but there is room for improvement in smaller, on-the-go sizes. Unfortunately, the company is in catch-up mode compared to its competitors.
|Deanie Elsner, president of U.S. Snacks|
“If I look at single serve and I look at a really big cookie and cracker competitor that I think about every single day our single-serve offer is about 50% of what they have in their portfolio,” Ms. Elsner said. “They are double in terms of volume that they deliver in single serve.
“If I compare myself to a rather large salty snack competitor in the marketplace, I only have about one-third of my volume in single serve versus them. So getting to the right channels, getting to the right format; that is the key unlock with this consumer.”
While snacks will be a focus, company executives emphasized the transition to single serve will extend across product lines.
|Craig Bahner, president of U.S. Morning Foods|
“We’re doubling down on Pop-Tarts in 2016 to dramatically expand our single-serve distribution, putting it at the front of the store so it’s top of mind and within arm’s reach of desire,” said Craig Bahner, president of U.S. Morning Foods.
Eggo waffles also will start appearing in single-serve pack options, said Andrew Loucks, president of U.S. frozen foods for Kellogg.
The company also will be introducing Kellogg’s To Go Breakfast Mix that will be packaged in single-serve pouches and made to be enjoyed without milk. The cereal pieces are made with snacking in mind and are larger than traditional cereal pieces. The resealable pouch is designed to fit in a car’s cup holder. Noting that cereal in a cup is a fast-growing segment at retail, the company is putting some of its cereals in grab-and-go cups, including Frosted Flakes with Energy Clusters, Special K Protein, Froot Loops Bloopers and Special K granola.
Identifying a trend is only one aspect of an effort to capitalize on it and achieve success. Ms. Elsner noted that while single serve is a significant opportunity for Kellogg, the space and the market landscape need to be approached carefully, “because going into one area that a consumer is not going to go is ultimately financially damaging for the company,” she said.
From an infrastructure perspective, initial efforts will focus on co-manufacturers.
“As they hit critical mass how do we then think about repatriating that production and capacity back into the network of Kellogg?” she said. “The hope would be that when we get to that point we are going to have a line of site in proven points on the board in terms of what that volume is going to be in a sustainable long-term perspective.”