7 - Carrying that weight: General Mills and Kellogg's

Summary

Companies such as General Mills and Kellogg's had to decide to what extent they would treat healthy foods as a threat or an opportunity. To what extent should they shift their portfolio of products in this direction? Both companies had many brands. They competed vigorously for the world's leading market share in ready-to-eat cereals. General Mills had yogurts (Yoplait), soups (Progresso), flour and cake mixes (Gold Medal and Betty Crocker), snack foods (Chex Mix, Fiber One, and Gardetto's), and vegetables (Green Giant). Kellogg's had snacks such as Pringles and Cheez-It, cookies such as Keebler, Famous Amos, Hydrox, and Mothers, and breakfast foods including Eggo Waffles and Pop-Tarts. Both companies also had nature bars. General Mills’ sold them under the Nature Valley and Larabar labels, while Kellogg's sold them under Nutri-Grain and Bear Naked labels. Kellogg's had meat and egg substitutes such as MorningStar Farms, Natural Touch, Gardenburger, and Worthington.

Both companies purchased firms whose main mission was to provide healthy options. General Mills bought Cascadian Farm and Kellogg's bought Kashi. Cascadian Farm, in the mountains of the state of Washington, and Kashi, mainly located in the suburbs of San Diego, were far from the Midwest headquarters of General Mills in Minneapolis and Kellogg's in Battle Creek, Michigan. They operated separately and independently of the two food companies that had acquired them.

Consumer tastes seemed to be shifting toward foods that were promoted as healthier options. For instance, consumers increasingly wanted high-protein, low-carbohydrate “foods on the go.” General Mills and Kellogg's for years had been trying to meet consumers’ demand for more convenience, but had been slow to recognize the consumer preference for added protein.