by Michael Moss
At its peak, Apple Jacks held no more than 1 percent of the cereal market, tenth place in Kellogg’s own lineup. Yet, as the company pushed to regain its dominance, even the smallest brands had their marketing campaigns honed to maximize sales. For the largest brands, Kellogg would pull out all the stops the moment they showed even the slightest sign of weakness.
In 2006, Frosted Mini-Wheats—the largest brand in the Kellogg stable, next to Frosted Flakes—wasn’t just starting to flag. It was in the midst of a full-blown identity crisis. The problem was bran, with its halo of health. Flour that is made from the entire grain, including the bran, had become the rage in the cereal aisle. Nutritionists were linking bran to lower cholesterol, less heart disease, better intestinal health, and a reduced risk of obesity, and federal officials warned that Americans were not eating enough of it. Kellogg’s rivals at Post had just pulled off a striking feat: Spending a mere $12 million, a pittance in cereal advertising, on an ad campaign that touted their whole grains, Post had reversed a seven-year slump in its Grape-Nuts and Shredded Wheat brands and sent their sales soaring by 9 percent. Kellogg had whole grains in its Frosted Minis, too, but with more than two teaspoons of sugar in a single cup, they were a harder sell to people who were looking to be healthy. In an analysis of the situation, Kellogg concluded that the Frosted Mini-Wheats brand had “lost its connection” and “needed an insight that ran deeper than basic nutrition and into the hearts of consumers.” The company went on an offensive to reverse its fortunes.
Kellogg didn’t cut back on sugar to emulate Grape-Nuts. Fundamentally, the allure of the Frosted Mini line was all about sweet. Even the names of its product extensions—Cinnamon Streusel, Little Bites Chocolate, Vanilla Crème—evoked dessert. The company couldn’t suddenly undermine that foundation. This was the cereal’s branding. It was still trying to appeal to kids, and kids still wanted dessert for breakfast. But it couldn’t afford to lose the people it needed to make the sale: parents. To convince them, Kellogg devised an ad campaign that sold Frosted Minis as brain food.
The ads evolved, culminating in a commercial of early 2008 that centered on the premise that Frosted Mini-Wheats would help children get better grades. “Help your kids earn an A for attentiveness,” the company said in a media release that touted the ad campaign.
The scene was a classroom. A teacher standing at the whiteboard loses her train of thought. “Okay,” she asked the class. “Where were we?” Her young students looked weary, slumped at their desks. They used their arms only to prop up their heads. One boy shot his hand into the air, bright-eyed and eager, fingers waving. “We were on the third paragraph of page 57, and you were explaining that the stone structures made by ancient Romans were called aqueducts,” he said. “And as you were writing that up on the board, your chalk broke. Into three pieces.”
“Right,” said the teacher, amazed.
Then a voice-over brought the message home: “A clinical study showed kids who had a filling breakfast of Frosted Mini-Wheats cereal improved their attentiveness by nearly 20 percent. Keeps ’em full. Keeps ’em focused.”
The ad ran widely on TV, the Internet, and various modes of print, including the sides of milk cartons. One could almost imagine stressed-out parents doing the math on what, exactly, a 20 percent boost would mean for their own kids. Let’s see. Billy got a 70 on his last test. Add 20 percent, that’s an 84. A solid B! There was just one hitch: The claim wasn’t true. The clinical study cited in the classroom campaign had, in fact, been commissioned and paid for by Kellogg. That should have made it suspect right off the bat, since, as every good scientist knows, the results of a study can be preordained by its design. But the truly remarkable aspect of the campaign is that the company study, even if taken at face value, did not come close to supporting the claim in its advertising. Half of the children who ate bowls of Frosted Minis showed no improvement at all on the tests they were given to measure their ability to remember, think, and reason, as compared with their ability before eating the cereal. Only one in seven kids got a boost of 18 percent or more.
These were the findings of the cereal industry’s old nemesis, the Federal Trade Commission, which had been trying to claw its way back to relevancy after the blows it suffered following the children’s advertising debacle of 1980. To its credit, the commission, quick to get wind of the suspect research behind the Frosted Mini ads, opened a legal proceeding. It called the ads false or misleading. Kellogg’s campaign, to be sure, was not in the same league as the ads run by its old rival, C. W. Post, a century earlier, in which he was accused of insinuating that his cereal, Grape-Nuts, would cure appendicitis. But with Kellogg spending $1 billion a year on advertising that can deeply influence America’s shopping habits, the commission was incensed.
“It’s especially important that America’s leading companies are more ‘attentive’ to the truthfulness of their ads and don’t exaggerate the results of tests or research,” the FTC chairman quipped in a statement. “In the future, the commission will certainly be more attentive to national advertisers.”‡
But behind the scenes, the case stretched on for so long that the resolution may have done little to diminish the ad’s effectiveness in shaping consumer perceptions. The FTC declined to release detailed records of the case to me, citing its standard policy of not divulging information that might hinder the competitiveness of a company whose practices the commission scrutinizes. Kellogg declined to provide the scientific study on which the brainpower claims were based. (In 2011, Kellogg agreed to settle a separate class action lawsuit brought by consumers by paying up to $2.8 million in refunds on purchased Frosted Minis and donating $5 million worth of its products to charities.) “Kellogg has a long history of responsible marketing and takes any concerns about our advertisements seriously,” the company said to me in an email. “When we received feedback from the FTC, we adjusted our communications to incorporate the guidance.”
Through the Freedom of Information Act, however, I was able to obtain emails and other records showing that the FTC first contacted Kellogg about the commercial in March 2008—questioning the veracity of the ad and seeking proof from Kellogg that the near–20 percent attentiveness claim was true. But the agency then plodded for more than a year before issuing a decision that barred Kellogg from using the claim. The FTC told me its powers in such cases are limited.
By then, Kellogg had already stopped running the ad on its own accord, but it didn’t do so until late September 2008—six months after the FTC first contacted the company raising concerns. (Kellogg, in its defense, said that even that late date in September was “about a month before we had our first substantive discussion with the FTC of their concerns.”) Six months is a long time in commercial campaigns, especially for one as effective as the classroom ad. Like other companies, Kellogg pays close attention to how well its ad dollars are spent, and in this case, the influence these dollars had on consumers was impressive indeed. A resounding 51 percent of the adults surveyed were not just certain that the claim about attentiveness was true; they believed it was true only for Frosted Mini-Wheats. That is, only by dropping that cereal into their shopping carts would their kids get ahead in class. Despite their high sugar content and a public growing more wary of sweetened cereals, Frosted Mini-Wheats in 2008 achieved a 3.5 percent share of the market, even as Frosted Flakes slipped a notch in popularity.
Within months of the FTC’s order on Frosted Mini-Wheats, Kellogg was back with another brainpower campaign, though this one had a new twist. Rather than compare its cereal with those of its rivals, this new ad stacked the Frosted Mini-Wheats against having no breakfast at all—a claim that would presumably survive the FTC’s scrutiny, if not the moral compass of consumerists: “A clinical study showed kids who ate Frosted Minis had 23 percent better memory than kids who missed out on breakfast.”§ The campaign’s main focus was still on the fears of women with school-age children, and it seemed to play on these fears. The new campaign featured a Kellogg
-funded website called “Mom’s Homeroom” where mothers could discuss how best to help their kids succeed in school. “My son still struggles so much with his reading,” one mother wrote in. “I don’t know what else to do. Please HELP!”
Mom’s Homeroom won an industry advertising award in 2010, and in accepting the award Kellogg explained the reasoning behind this line of attack: “After years of Frosted Mini-Wheats ‘Full and Focused’ campaign positioned around success in school for kids, moms still weren’t buying it. The times had changed and we needed a different strategy. So we stopped talking at her and joined in on the dialogue she was already having. Pulling together all of her trusted resources, creating a one-stop shop online for all of Mom’s school-related needs, Frosted Mini-Wheats proved that we were not only talking the talk, we were Mom’s true partner in helping her kids succeed in school.”
* In 1911, in an article entitled “The Great American Frauds,” Collier’s magazine accused Post of using fictional doctors for endorsements and implying that Grape-Nuts could cure appendicitis. Post, in response, spent $150,000 on ads accusing the editors of Collier’s of being jealous because Post wasn’t advertising with them. With testimony from the magazine’s ad manager, Conde Nast, Collier’s sued Post for libel and won.
† Thirty-five years later, the “nanny” label would get resurrected by a soda-industry group that sought to defeat a proposal brought in 2012 by the New York City mayor, Michael Bloomberg, to bar the sale of mega-sized sodas in certain venues. The group’s full-page ad depicted him in a long dress and scarf under the headline, “The Nanny. You only thought you lived in the land of the free.” This time around, it was the editorial board of The New York Times—where the soda group’s ad ran—that mirrored the food industry’s position. “Promoting healthy lifestyles is important,” the paper’s editorial said. “In the case of sugary drinks, a regular reminder that a 64-ounce cola has 780 calories should help. But too much nannying with a ban might well cause people to tune out.” What the editorial failed to address, however, was the changed world since The Washington Post used the nanny line that made overconsumption a problem for everyone. With the soda industry spending $700 million a year on advertising to push soda drinking higher, New York City and the country at large were having to shell out more than $90 billion a year on medical treatment related to the devastating health effects of obesity.
‡ The chairman had more harsh criticism for Kellogg a year later, in 2010, when the company settled a second deceptive advertising case brought by the FTC. In this case, Kellogg agreed to stop claiming that its Rice Krispies, with their added vitamins and antioxidants, would bolster children’s “immunity” from disease. In noting how closely this advertising had followed on the heels of the Frosted Mini-Wheats case, the chairman said, in announcing the settlement, “We expect more from a great American company than making dubious claims—not once, but twice—that its cereals improve children’s health. Next time, Kellogg needs to stop and think twice about the claims it’s making before rolling out a new ad campaign, so parents can make the best choices for their children.” In an accompanying statement, the chairman wrote, “Kellogg must not shirk its responsibility to do the right thing when it advertises the food we feed our children.”
§ If Kellogg compared its cereal with a breakfast recommended by nutritionists, like oatmeal and whole-grain toast, it wasn’t saying in this Frost-Minis-or-nothing claim.
chapter five
“I Want to See a Lot of Body Bags”
Jeffrey Dunn’s first job at Coca-Cola confirmed everything he’d heard about the company growing up. His father had worked there since Jeffrey was five, first as a sales director and then as a pioneer of Coke’s renowned marketing, which had singlehandedly put the soda into the biggest sports-entertainment venues around the world. Every evening, his father would regale him with some fresh and rousing story about his valiant efforts to block his archnemesis, PepsiCo, and prevent them from getting a single account. One day, he would be keeping McDonald’s from falling into his rival’s hands; the next, he would be fighting for his monopoly at Yankee Stadium. “We were always keeping track of how my father was doing relative to fighting off the ‘no-good bastards’ of Pepsi and maintaining the integrity of the Coke brand,” Dunn said.
Now it was Jeffrey’s turn. In 1984, at age twenty-seven, he joined the division that was Coca-Cola’s equivalent of the Marines: fountain sales. His job was to go out on the road and get Coke into the carbonated drink dispensing machines at fast food chains and convenience stores, from Hardee’s to 7-Eleven, and Dunn, a brawny former athlete who hated to lose more than he loved to win, was an ideal recruit. In fountain, there could be no complacency. These were the front lines of Coca-Cola’s campaign to dominate the soda business and reshape America’s eating habits. Fountain was all about taking beachheads and holding ground, and Coke ruled over Pepsi in these outlets two to one. This was where the supersize phenomenon was born, dreamed up by the marketing corps as a way to sell yet more Coke with hamburgers and fries. The skirmishes with Pepsi were endless and intense. Around the offices, they had a name for losing one of these fights—they called it “being positioned.” And with Jeffrey Dunn, the company could count on one thing: He was not about to be positioned.
“There was no status quo, because everyone in the marketplace is constantly positioning,” he told me. “You were either going forward or you were going backwards. They called it positioning because of where you stood in relation to the rest of the universe. The other companies were constantly pushing on you, trying to capture customers. And you gotta push back, because if you’re not defining and delivering on your position, then you are by definition being positioned. So you really learn this in the soft drink business. It’s hyper-competitive, and you’re constantly working on not just, What do I want my brand to stand for? but also, How do I want to position it versus every other brand in the market?”
Kellogg and General Mills and other food manufacturers might think they are pretty good at this positioning stuff, but their efforts pale in comparison to those of Coca-Cola, which isn’t so much a company as a $35 billion institutional force. Coke didn’t just set up a war room, like Kellogg did with its special team dedicated to identifying and targeting the fears and desires of consumers. At Coca-Cola, the whole organization was a war room. The desks and tables in Coke’s headquarters complex in Atlanta were papered with charts that mapped out the company’s strategy, and every employee was expected to devote long hours to the cause. Coke prided itself on being progressive, but at one company meeting in the 1990s, a female executive asked whether Coke might consider creating a day-care facility to ease the scramble at 6 P.M., when children needed picking up long before the day at Coke was done. The company president, Douglas Ivester, who had no kids and often worked seven days a week, stared at her for a moment and then said, “There will never be a day care on this campus.”
The man who instilled this ethos, Robert Woodruff, was a classic corporate warrior. He was working for an automobile maker, the White Motor Company, in 1923 when his father asked him to move to Atlanta. He needed help running his newly acquired company, Coke, which was foundering. The elder Woodruff, Ernest, had led a group of bankers in buying Coca-Cola for $25 million four years earlier when Coke’s profits had gone flat, but the company’s prospects had only grown worse. Sales were falling, despite Coke’s attempts to boost consumption through the introduction of a cardboard carton that could hold six bottles. Coke was also distracted by fights with its bottlers—the franchises, numbering 1,200 at the time, who had the plants where the Coke concentrate was combined with sugar, water, and carbonization.
Robert Woodruff—who would oversee Coca-Cola for six decades—is widely credited, among many other things, with two brilliant innovations. In 1927, he created a division called the Foreign Department, which introduced Coke to the rest of the world. Then, at the onset of World War II, he publicly declared that every soldier in uniform would
get Coke for five cents a bottle, no matter where they were stationed or what it cost the company to put those bottles into their hands. As a result, a generation of men and women came home hooked on Coke.
Woodruff, however, had another insight—this one not as frequently discussed in the business school case studies—that would help take the company from solid to spectacular. He figured out how to tap into people’s emotions better than anyone else in the industry of consumer goods, whether food or beer or cigarettes. His method didn’t require slogans or celebrity endorsements or the kind of money the company would spend every year on advertising, though all those things helped. It went deeper than that. It focused on getting Coke into the hands of people, especially kids, when they were most vulnerable to persuasion—those moments when they were happy. That is how Coke came to be partners with America’s favorite pastime. “The story they always tell at Coke,” Dunn said, “is Mr. Woodruff saying, ‘When I was a kid, my father took me to my first baseball game, and there was nothing more sacred to me than that moment with my father. And what did I have to drink? I had an ice-cold Coke, which became part of that sacred moment.’
“The idea was to be in all those places where these special moments of your life took place,” Dunn continued. “Coke wanted to be part of those moments. That was, if not the most brilliant marketing strategy of all time, probably one of the best two or three. You not only had the imagery, it’s like somebody was in their own television commercial. You’re in the moment, you’re drinking the product, you have that emotional context that sets it. And Coke really came to have a very high share of those experiences. It was about having a ubiquitous presence. Inside Coke, it is called the ‘ubiquity strategy.’ In simple terms, Mr. Woodruff’s words for that were: ‘Put the product within an arm’s reach of desire.’ ” This helped turn the soda into much more than a product. To the envy of every food company on earth, Coke became the most powerful brand in the world—a brand that was deeply rooted in people’s psyches, able to generate staggering heights of consumer loyalty.
