BATTLE CREEK, MICH. — WK Kellogg Co expects improvement next year from its underperforming Special K ready-to-eat cereal brand, aided by a new marketing campaign.
Five of WK Kellogg’s six largest cereal brands — Kellogg’s Frosted Flakes, Raisin Bran, Froot Loops, Frosted Mini Wheats and Rice Krispies — gained or held market share through the third quarter, ended Sept. 28. The exception was Special K, which lost 40 basis points of market share, according to chairman and chief executive officer Gary Pilnick.
Altogether, the six brands account for roughly 70% of WK Kellogg’s sales. Excluding Special K, the group of brands grew share by 30 bps in the third quarter and by 20 bps for the year-to-date, the CEO reported.
“Five of our six core brands are growing (share) faster or at the category rate; Special K is down 40 bps and was down 40 bps in Q2 as well,” Pilnick told analysts in a conference call about the third-quarter results. “So, we would say it’s stabilizing, but it’s not performing where we would expect the brand to perform. We do think ’25 will be different. We feel good about the complete activation plan we have.”
Pilnick said Special K dealt with some “mechanical issues” in fiscal 2024, including SKU (stock-keeping unit) changes and a retailer that shifted its promotional focus away from the brand.
“That’s in the base for 2024; those mechanical issues will largely be gone in 2025,” he said. “Execution is the second thing. This brand we know responds to display, to feature, to promotion, to innovation. And we were pretty light in 2024 as compared to 2023. We feel better about that for next year.”
TD Cowen analyst Robert Moskow described Special K as WK Kellogg’s “most significant weak point” in the third quarter, pointing to the brand’s market share shrinkage.
“We believe the brand’s challenges are partially attributable to its lack of identity since it shifted away from weight loss in the 2010s,” Moskow said in a Nov. 10 research note on WK Kellogg’s quarterly performance.
However, Pilnick said in the call that WK Kellogg has begun to put a bigger spotlight on Special K’s health and wellness attributes.
“We like where this brand is,” he said. “It is at the intersection of taste and health; it’s well-positioned for consumers. The key is, how do we get to those consumers? And we're not standing still. We’ve already started with that. When we think about Special K, it provides offerings that match a variety of consumer needs. The key is, how do you communicate that effectively to your consumers?”
At the end of the second quarter, WK Kellogg launched the “special for a reason” marketing campaign to highlight Special K’s range of nutritional benefits and product variety, in association with inspiring individuals. That included a collaboration with cookbook author and social media influencer Molly Baz.
On the Special K website, it reads, “Special K is special for a reason, and that reason is you. The real you. What makes Special K so special? Multigrain flakes, 11 vitamins and minerals combined with ingredients like real fruit or chocolate chunks. That’s why!”
The website also showcases the brand’s repertoire of products, which includes Special K Original, Red Berries, Fruit & Yogurt, Vanilla Almond, Chocolatey Delight, Blueberry, Protein, Cinnamon Pecan, Pumpkin Spice, Banana Crème and Zero Cinnamon (i.e. zero added sugar). A video, too, conveys the multigrain cereal’s healthful qualities and array of flavors.
“We’ve already started with a new campaign,” Pilnick said. “We’ve talked about ‘special for a reason.’ You can understand why we’re doing that, because Special K is special for the different reasons consumers are looking for. Early reads would say we’re getting some positive feedback. But that’s the key thing we have to do; that’s the right messaging. We’ve got to use our new marketing muscle to reach our consumers.
“So, what I just described were mechanical issues that we’re hoping are behind us. Execution, we hope to perform even better. And strategically, the team is on it already. So, the team is moving forward, and we feel better about 2025.”
Even with the additional marketing oomph and more focused brand messaging, Special K will remain challenged next year, according to Moskow.
“The company is introducing a new advertising campaign called ‘special for a reason,’ which will highlight the specific benefits of its wide variety of offerings, including zero sugar, high protein, fruit and chocolate,” he said. “While management is optimistic about the brand’s path forward in 2025 – especially as it laps mechanical issues, SKU rationalization and lower levels of brand activations – we believe it will continue to struggle to resonate with consumers seeking health and wellness solutions.”