Kellogg has been on top of the heap of the U.S. ready-to-eat cereal market for so long that unseating it as No. 1 might be cause for rejoicing or outright bragging.
But management at General Mills, which sneaked ahead of Kellogg in recent Information Resources Inc. data, knows better than to do any crowing.
After all, Big G’s lead is a scant half of 1 percent–General Mills holding 31.8 percent, versus Kellogg’s 31.3 percent, of what IRI tracked as a $7.67 billion cereal business for a 52-week period ended Oct. 10.
General Mills has been increasing its share, and Kellogg has been fighting hard to maintain its lead. Other players are Kraft, whose Post division has 16.5 percent, followed by Quaker Oats Co., 9.3 percent.
Some years back, General Mills bragged about getting a 25 percent share, even putting that number in a banner on one of its buildings in Minneapolis. Such boasting didn’t sit well with the brass at Kellogg in Battle Creek, Mich.
So this time around, General Mills is downplaying its achievement, well aware that its rival has plenty of marketing muscle and promotional resources to counterattack.
“There’s no reason to say anything,” says a General Mills spokesman. “It’s still close.”
Kellogg didn’t have any immediate response to the new IRI data, which tracks only supermarkets, drugstores and mass merchandisers. Not counted are convenience stores and other retail outlets, including warehouse and club stores. Moreover, IRI monitors dollar volume and not unit sales.
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If Big G had any thoughts about bragging, highly respected analyst John McMillin advises: “You don’t want to get the big bear mad.”
McMillin, senior food analyst and managing director of Prudential Securities New York, notes that globally, Kellogg is well ahead of General Mills in cereal sales.
Kellogg probably has close to 40 percent, double that of Big G, in global ready-to-cereal sales, which top $15 billion a year.
Outside the U.S., General Mills has a joint venture with Nestle, having formed Cereal Partners Worldwide.
Consumption of cereals is fairly high in English-speaking countries, so there’s lots of room to grow globally. Kellogg still is in the driver’s seat, even with its sluggish sales in this country.
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