by Michael Moss
The commission staff didn’t throw these accusations around lightly. To compile their report, they went out and gathered hard data, conducting a nine-month survey of weekend daytime TV to show how stacked the decks were in favor of sugary fare. There were 3,832 ads for mostly sugary cereals, 1,627 for candy and gum, 841 for cookies and crackers, 582 for fruit drinks, and 184 for cakes, pies, and other desserts. The total number of ads for unsweetened foods, like meat, or fish, or vegetable juice, on the other hand? Four.
The FTC report didn’t stop there. The report named names and quoted from the industry’s own documents, including a Kellogg memo that summed up the bottom line on children’s advertising quite succinctly: “Television advertising of ready-to-eat cereals to children,” the memo said, “increases children’s consumption of these products.” The commission also went after the broadcasters, citing an exuberant house ad in Broadcast magazine that offered some blunt advice to advertisers. “If you’re selling, Charlie’s Mom is buying,” it said. “But you’ve got to sell Charlie first. His allowance is only fifty cents a week, but his buying power is an American phenomenon. When Charlie sees something he likes, he usually gets it. Just ask General Mills or McDonald’s. Of course, if you want to sell Charlie, you have to catch him when he’s sitting down. Or at least standing still. And that’s not easy. Lucky for you, Charlie’s into TV.
“And, of course, Charlie won’t be watching alone!” the magazine added. “You’ll also be reaching Jeff and Timmy, Chris and Susie, Mark and his little brother John.
“That’s what we mean by Kid Power.”
The outraged staff continued: “The examples we have collected include a commercial in which children are taught that breakfast is ‘no fun’ without a particularly heavily sugared brand of cereal, and another in which the message is that a certain brand of heavily sugared fruit-flavored cookies is actually preferable to fresh fruit—as is shown by a fruit peddler’s abandoning of his entire stock of fruit after being introduced to the cookies. We have also collected a great number of commercials in which the message is that eating sugar is desirable and fun, that this is the normal, accepted way to satisfy hunger, either at breakfast or between meals, and that boys and girls who do this are healthy and happy.”
Dubbed “kidvid” by the media, the FTC’s proposal to curb TV advertising aimed at kids caught fire with reporters, who broadcasted the findings. Even when the FTC’s crusade ended in 1980, the sugar in processed foods continued to garner public attention. In 1985, the group that had started the proceeding, the Center for Science in the Public Interest, released a handy wall chart for consumers that served as a guide to the sugar levels in the most popular brands of food. In writing about the chart, Jane Brody, the influential Times health specialist, expressed what every American who saw the chart likely thought: “The amount of sugar commonly consumed at one time is astonishing.”
The persistent attacks on sugar had an effect. That same year, Post changed the name of its Super Sugar Crisp Cereal to Super Golden Crisp, though its sugar levels remained at more than 50 percent. A spokeswoman said at the time that the change was made in “recognition that there’s a sensitivity to the word sugar.”
“It’s a marketing tool to give a modern image to an old product,” she added.
This followed Kellogg’s earlier move to drop the word sugar from two of its own 50-percent-plus mega-sellers: Sugar Frosted Flakes became Frosted Flakes, and Sugar Smacks turned into Honey Smacks. But if touting the sugar in cereal was no longer a smart marketing move, Kellogg would soon find itself under intense pressure to find another way to sell cereal that was better than smart.
The 1990s opened with nothing but trouble for Kellogg. For starters, the cereal aisle, once the exclusive domain of the Big Three, was invaded by retailing giants like Safeway and Kroger. They began selling their own generic knockoffs of the name brands. They also avoided the Big Three’s costly advertising, which brought their prices down by a third and sent their annual sales surging to nearly $500 million by 1994, or nearly 10 percent of the cereal market.
Even more disconcerting to Kellogg: An old rival, General Mills, was gaining ground in the cereal aisle by wielding a brash new pricing strategy. For years, Post, Kellogg, and General Mills had all maintained a steady gain in profits simply by raising their prices in unofficial lockstep. Then, in the spring of 1994, General Mills broke from the group and dropped its prices. At the same time, it stepped up its marketing efforts so that it could make up for the lower prices by selling more cereal. Stephen Sanger, the president of the General Mills cereals division, had a watchword for attracting consumers to his brand: flux. The company’s products had to stay in constant motion. Every time shoppers hit the cereal aisle, they should find something different about their favorite cereals, something that would compel them to buy as much as, if not more than, they did on their last trip through the store. He called this “product news,” and he excelled at it. Product news could be a cereal that had more crunch, from more sugar in the formula. Or it could be a prize, known within the industry as an “incentive,” like the three-part collectable poster of Michael Jordan folded into boxes of Wheaties. Product news was anything that said to the consumer: This cereal is new and exciting. Executives from consumer research, product development, sales, and legal all pulled together to give the cereal continuous buzz, said Jeremy Fingerman, who held the position of marketing manager for children’s cereal at General Mills from 1990 to 1992. “Sanger pushed for product news,” Fingerman told me. “In this business, you have to stay fresh and nimble all the time.”
Sugar drove much of the product development at General Mills. Even Cheerios—its more wholesome brand, at just 3.5 percent sugar by weight, got a sweeter version in 1988: Apple Cinnamon Cheerios, which clocked in at 43 percent sugar. General Mills also chased hard after America’s growing appetite for snacks that could be eaten on the run—pizza, bagels, soda, and toaster pastries were the fastest-growing foods in the American diet, along with presweetened cereals. One key to their success was the product design and packaging that made them easy to wolf down on the go. General Mills jumped out early on this front in 1992 with a super-convenience food called Fingos, a cereal shaped to be eaten by the handful, rather than poured into a bowl. They even widened the mouth of the box to better accommodate a plunging hand.
Outmaneuvered, Kellogg’s share of the cereal market slipped a full 1 percent in 1990 to 37.5 percent, down significantly from its peak, in the 1970s, of 45 percent. The erosion seemed especially ominous given how fierce the competition had become with General Mills. “Getting a 0.5 percent share in this market is a real battle,” the Kellogg CEO, William LaMothe, said at the time. Kellogg had its own “product news” operation under way, but as LaMothe conceded in a 1991 interview, its development arm was running blind, introducing strings of cereal products—as many as four a year—but without doing the necessary market testing or, even worse, ignoring the results when testing showed low consumer enthusiasm. “You can get swept up in this,” LaMothe said, “and so you launch, and the product doesn’t do well and you’ve spent the money and don’t get the return.”
On the verge of panic, Kellogg went back to the drawing board, and this time, a total reset on its marketing strategy would be required. Nothing would be held sacred. Not the company’s famously strict—and, at times, bizarre—corporate etiquette, which rewarded rank over achievement and put a damper on creativity. (These rules, at one time, extended to the company parking lot, where only the president was allowed to drive up in a Cadillac. Vice presidents were allowed to drive Oldsmobiles, managers could have Buicks, and everyone else settled for Chevrolets.) Not the dress code, which was strictly suits and ties. Not even the rules on where its employees could socialize after work, which was something of a problem in tiny Battle Creek; they could hit the Tac Room at the Hart Hotel but not the Wee Nippy a few blocks away, where the competition gathered. Most pointedly, Kellogg, in rethinking how to make bette
r products, lifted its longstanding rule that outsiders be kept from seeing the company’s most sensitive operation—its research and development laboratories—for fear of corporate espionage. This shroud of secrecy had even applied to executives from the company’s ad agency, Leo Burnett, who had always been banned from the company’s labs, where the food inventions they were selling were born.
With Kellogg’s share of the cereal market in a free fall, all of these rules fell by the wayside. Rather than rely on food technicians, who traditionally held the reins when it came to inventing more cereals, Kellogg now put its marketing department in charge. The marketing folks, in turn, set up a special team whose members were exempt from the company norms. They left their suits in the closet and wore jeans instead. They went out on the town to brainstorm over booze and barbecue. They set up in the most sensitive corner of Kellogg’s operation, a building where the cereal puffers and other top-secret machinery were developed. The room they inhabited resembled a war room and was kept under lock and key. Boxes of cereal from all of the competing brands were brought in and stacked against the walls, forming what looked like a giant map detailing the enemy’s positions. They pored over these cereals like generals, but of course, the other food companies were not the target.
The target was the civilians who were buying the rival cereals.
In the most telling break from tradition, the Kellogg war room was opened to the same people who had been barred from the company’s sensitive operations: the advertising executives from Leo Burnett. With the company under pressure to come up with better-selling products, these ad men were not only put on the team, they were also given the most prominent seats at the table, relegating some of Kellogg’s own executives to the margins of the room. “You know how at meetings the junior people will be sitting away from the table, against the wall?” recalled Edward Martin, a marketing analyst at Kellogg who was assigned to the team. “Well, we’d have the Leo Burnett guy right at the table, with the assistant brand managers sitting against the wall. It set a tenor. The top guy at Leo obviously had access to the CEO of our company, and that filtered all the way down to our working team.”
This team would turn the traditional Kellogg way of creating products on its head. Instead of having the food technicians toil away in their labs experimenting with tastes and textures, the marketing folks hunted for ideas that suited the advertising needs at Kellogg first and worried about pleasing the palates of consumers second. The driver for this reversal was the recognition that branding was overwhelmingly important, explained Martin. The Kellogg icons—whether Rice Krispies or Frosted Flakes or Special K—all had distinct identities, carefully honed by hundreds of millions of dollars of advertising. Increasingly, image was all that stood between these icons and the less expensive private label knockoffs. Each brand had its own image to convey. Corn Flakes suggested tradition. Frosted Flakes, fun. Special K, nutrition and strength.
Kellogg had labored to burn these brands into the minds of American consumers over the years, and with this as their guide, the team would reject whole slews of great-tasting candidates that did not fit the image they needed to convey for each of the brands. “They’d come in with seven or eight different varieties, in little bowls, and we’d chow down and say, ‘Well, these taste good but they don’t really live up to the brand concept,’ ” Martin said. The war room at Kellogg began generating its own wild ideas for cereals that seemed to have blockbuster potential, but no one knew if they could actually be made. A case in point was the team’s takeoff on its legendary sweet snack Rice Krispies treats.
The concept drew on the psychology of perceptions. If a cereal could evoke the joy of an afternoon snack, it could generate sales not only as a breakfast food but also as a snack, in and of itself. Kellogg had made Rice Krispies since 1927 and had been promoting the homemade dessert—a combination of cereal, butter, and marshmallow—on the side of its box for nearly as long. What the team saw when they looked at these two parts—the cereal and the dessert—was a dessert-like cereal called Rice Krispies Treat Cereal that would have a huge, built-in, and powerful driver: Its homey image would evoke happy childhood memories for the moms and dads who would buy cereal for their kids. But when the team dispatched the technicians to turn this vision into reality, they came back weeks later and said they could not make it work. In trying to mimic the dessert, they had ended up with gooey clumps that turned to mush as soon as they were combined with milk. “Mush in the bowl was death,” said Martin. “Kids, especially, like crunch.”
Even when they upped the sugar content to get more crunch, they could not make it work. The technicians could not get both the crunch and the gooey marshmallow to coexist once milk was added. That’s when the marketing folks applied some of their magic. They set up focus groups to ask consumers about the idea of Rice Krispies Treat Cereal, and the consumers said the cereal didn’t actually have to be gooey like the dessert. It just had to have the flavor of gooey. In food marketing lingo, this is known as “permission.” It’s what people allow manufacturers to take away from their food in exchange for convenience or price. Yes, the consumers would have preferred a bowl of the real Rice Krispies treats they grew up on, but they were willing to settle for less. “The lightbulb moment finally came when consumers gave us that permission,” Martin said. “We didn’t have to be literal. We only needed the flavor to be spot on.”
Launched in 1993, Rice Krispies Treat Cereal helped catalyze Kellogg’s new marketing-driven development scheme. Strong sales that first year rocketed the cereal to eleventh place in the company’s vast lineup, handily beating out Smacks, Cocoa Krispies, and most of the company’s “better-for-you” brands like NutriGrain and All-Bran. The TV commercial that heralded the launch, crafted by Leo Burnett, captured the concept perfectly. It depicted a plate of Rice Krispies treats cut into squares and stacked in layers five high, spinning magically into a large bowl of the cereal. The bowl looked like it easily held four or five servings—a sugar load of eight teaspoons, as much as in a can of Coke. And as the kid in the ad dug in with gusto, the narrator exclaimed, “What a thought! The taste of Rice Krispies treats, in a big way!”
There was only so much the product development team could do for Kellogg, however. New products are exceedingly difficult to bring to market, and they fail far more often than they succeed. By 2005, Kellogg’s share of the cereal market had slipped again, even further this time, falling below one-third as the private label grocery brands grew to nearly half its size. If Kellogg was to regain its supremacy, it needed to invent ways to reinvigorate its existing brands. For this, the company turned once again to the marketing side of the business, including the advertising specialists from Leo Burnett. Based in Chicago, the agency had always distinguished itself—and proudly—from the New York firms by being homey and a little corny. Its creations included the Jolly Green Giant, Charley the Tuna, and Tony the Tiger. The growing consensus among the advertising trade, however, was that homey no longer worked as well as edgy.
So Leo Burnett got edgy.
In 2004, it rolled out a new campaign for one of Kellogg’s marquee cereals, Apple Jacks, which embraced this change. In the commercial, three girls sit around a table eating the cereal as two cartoon characters appear. One is a cinnamon stick named CinnaMon, who is agile and amiable, tall and thin, with a West Indian accent. The other is an apple named, astonishingly, Bad Apple. He is short, round, grouchy, and scheming. “When you pour a bowl of Apple Jacks cereal,” the voice-over said, “sweet CinnaMon races to you. But there’s a Bad Apple who’s trying to get there first.” And with that, the race is on. CinnaMon is jumpy with energy as he surfs subway cars, hops through open windows, and leaps park benches. Bad Apple, the dumpy grouch, gets his due at every turn. He trips, stumbles, is smashed into pieces. The voice-over delivers the punch line: “Once again the sweet taste of CinnaMon with new CinnaMon-shaped marshmallows … is the WinnaMon.”
Why Kellogg felt compelled to go after the apple
is not entirely clear. Forty years earlier, when Apple Jacks was invented, fruit in the cereal aisle was novel and exciting. One of the cereal’s creators, William Thilly, was a sophomore at MIT interning at Kellogg for the summer, and he told me he had been inspired by the apple farm where he grew up. “I was used to cooking with apples and knew it would fit in with lots of foods,” he said. The early advertising even stressed the nutritional power of apples, depicting a kid who was scrawny and bullied until he ate the cereal. The talking apple that appeared in these ads was big, strong, and friendly. Somewhere along the line, Kellogg appears to have started to worry that kids, in fact, didn’t like the taste of apples all that much, though it’s also not clear how much apple taste the cereal has. The largest ingredient in Apple Jacks is sugar, with three teaspoons per cup, or 43 percent of the cereal.
Kellogg responded to a complaint from the Better Business Bureau by agreeing to give the apple a softer demeanor, but insisted that children who saw the ads came away with the view that apple flavor was not an appealing taste in cereal, rather than apples themselves being bad. Consumer advocates, however, were aghast and worried about the potential damage to one of the central tenets of better childhood nutrition. The federal government had been redoubling its efforts to encourage children to eat fresh fruit, and here was Kellogg giving it an evil face. “Though Apple Jacks contains very little apples—less apple or apple juice concentrate than salt—it is inappropriate for Kellogg to disparage the taste of apples,” the Center for Science in the Public Interest wrote to chief executive and chairman of the board of Kellogg, James Jenness. “Also, it is more likely that Apple Jacks tastes sweet because it has more sugar than any other ingredient, not because of the added cinnamon.”
Jenness was no ordinary Kellogg CEO. Traditionally, and to a degree that exceeded most other food companies, Kellogg had been run by men who worked their way up through the ranks, selling cereal and even driving a truck like Jenness’s predecessor, Carlos Gutierrez, had done. When Gutierrez stepped down in 2004 to become the Bush administration’s commerce secretary, however, Kellogg felt pressed to break with tradition. Jenness had never worked at Kellogg but had spent much of his career in advertising, at Leo Burnett. He had what Kellogg felt it needed to compete. “With the game we’re in and the quality of the competitors, it’s dog eat dog,” Jenness told a group of Rotarians after he’d been on the job for two years. “The moment you let up … you’re gonna get nailed.”
