Thursday, January 17, 2008

Kellogg's Reformulation

The sweet heart of the corn, 1900

When a publicly traded company undertakes a strategy in the public interest at the risk of slowing its growth in the short term, we ought to take notice. Kellogg's decision to curtail advertising to children for products that do not meet specific nutritional guidelines is a bold redirection of some of its largest and most profitable portfolios.

In June, 2007 Kellogg announced that by the end of 2008 it would stop advertising to children under twelve those cereals and snacks that do not meet specific n
utrient guidelines. Those guidelines require that a single serving not:

1. Exceed 200 calories
2. Contain any trans fats
3. Exceed 2 grams of saturated fat
4. Exceed 230 grams of sodium (except frozen Eggo waffles)
5. Exceed 12 grams of sugar, not counting sugar from fruit, dairy or vegetables
The announcement is specific in its definition of advertising media, encompassing television, radio, internet and print. Kellogg further stipulated that it would not:
  • Use licensed characters, (such as Shrek or other Disney characters) on the front panels of products marketed to preteens
  • Sponsor product placements in media directed at preteen or use branded toys connected to products that do not meet the guidelines. However, Tony the Tiger, Snap, Crackle, Pop, Toucan Sam and other characters that are owned by Kellogg Company may continue to be used in identifying Kellogg products.

Kellogg fully understands the importance of preteen advertising; this announcement is about its intent to be a leader in providing nutritious products. Implicitly Kellogg is committing its resources to invest in reformulating some of its best-selling and most profitable products. For, while most cereals fall within the calorie and fat guidelines, many exceed the sodium and sugar limits.

Many may not realize that Kellogg's commitment to nutrition is as old as the Kellogg Company itself. W.K. Kellogg founded the modern company in 1906 to market a product that had its roots in a formulation developed by his brother, John Harvey Kellogg, the director of the Battle Creek Sanitarium. In 1930 W.K. Kellogg's trust established the W.K. Kellogg Foundation, an $8 billion charitable organization that has made major contributions in support of nutrition and healthy living worldwide. The Foundation is the single largest stockholder of Kellogg Company, holding 24% of the company's stock.

In announcing its intention to curtail advertising of certain products to children, Kellogg Company is resolving a longstanding internal conflict between its goals to promote health and shareholder value.

See the announcement of the expansion of the W.K. Kellogg Institute for Food and Nutrition Research made 12-December-2007 (click here)

For a humorous, fictionalized account of the early days of "Cereal City", when Battle Creek, Michigan was the center of a grain-based health food craze, see The Road to Wellville, by T.C. Boyle (Viking, 1993) and the movie by the same title, directed by Alan Parker, 1994.

See: "A case study of sodium reduction in breakfast cereals and the impact of the Pick the Tick food information program in Australia," by Peter Williams, Anne McMahon and Rebecca Boustead in Health Promotion International (2003) click here

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