Milling & Baking News - September 10, 2019 - 11

Business

General Mills and Kellogg navigate
'noise' in R.-T.-E. cereal category
Scott promotions on Reese's Puffs and,
again, really meeting the consumers
where they are."
Innovation also has been strong for
the Minneapolis-based cereal giant.
Mr. Nudi said in fiscal 2019 General
Mills had five of the top six new products launched in the R.-T.-E. cereal category. Innovation this year has been
quite strong as well, he noted.
Moving forward, Mr. Nudi said he
expects the R.-T.-E. cereal category to
grow.
"We don't think it's going to be in
mid-single digit, but just grow a little
bit," he said. "And we feel confident
about our plans to be able to perform
well, and it can ... drive the category
as well. In terms of inventory, I mean,
we've been pretty clear over the last
year for sure. We've seen, as our retailers focus on reducing working capital,
they have drawn down their inventories. And for us, in fiscal '19, it was
about a point gap between Nielsen
and what we reported from a net sales
standpoint. We expect that to continue
into the coming year. We hope it's not
quite as big of a gap. But clearly, our
retailers are still focused on working
capital as well."
Meanwhile, Steven A. Cahillane,
chairman, president and chief executive officer of Battle Creek, Mich.based Kellogg Co., sees R.-T.-E. cereal
as one of the areas where the company
has the most work in front of it.
"It's a highly penetrated category,"
Mr. Cahillane said. "It's a profitable

category for us. And by no means
do we think that this category's best
days are behind us. But it's going
through a challenging time right now.
As a category, it's only declining by
about 1%. So it's not falling off the

PRNEWSWIRE

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Cascadian Farms' Kernza cereal is one example of innovation on display at General Mills.

cliff as if you read some reports you
might think."
Also speaking Sept. 4 at the Barclays
conference, Mr. Cahillane said Kellogg
is not doing as well as the category
overall. A major challenge at Kellogg
over the first half of the year has been
the implementation of an entire pricepack architecture redesign.
"It's been very significant," he said.
"We've taken dozens of cube sizes out
of our portfolio. That simplified our
manufacturing quite substantially. It's
improved the look that we have in the

Panera expanding third-party
delivery with national players
ST. LOUIS - Panera Bread Co. hopes
to reach even more customers with
the announcement it has expanded its
national delivery platform to include
DoorDash, Grubhub and Uber Eats.
Panera said customers now will be
able to order lunch or dinner via the
Panera app and web site, as well as
through the apps offered by DoorDash, Grubhub and Uber Eats. Panera
plans to use its own drivers in most
markets to deliver the orders.
Daniel A. Wegiel, executive vicepresident and chief growth and strategy officer at Panera, said the partnerships will capitalize on the delivery
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base Panera has built over the past
three years.
"Panera has been a leader in the delivery market as one of the
first fast-casual concepts
to offer its own delivery
service," Mr. Wegiel said.
"Today, through these partnerships, we are pioneering once again by being the
first fast-casual to launch
the 'bring your own courier' model nationwide. The
most important consideration for Panera is owning the guest experience - and
making sure it's a great one. These new

grocery stores. It made us much more
shoppable. It's made us much more
merchandisable but has led to a really
significant pullback in promotions in
the first half of the year, and it led to
a position that we don't like to be in
where we were losing share. And we
have every intention of maintaining
our competitiveness as we get into the
back half of the year and even making
investments that we believe will revitalize some of our story brands."
One brand that will be gaining a
marketing boost is Kellogg's Frosted Flakes. Through a new program
called "Mission Tiger" Kellogg plans
to take the Tony the Tiger mascot
into schools that have lost their
sports programs. A key component
of the new program will be Kellogg's
sponsorship of the 2020 Tony the Tiger Sun Bowl that coincides with the
college football bowl season.
At its core, though, the ups and
downs of the U.S. R.-T.-E. cereal business may be isolated to the health and
wellness segment, Mr. Cahillane said.
"Historically, if you go back in time,
every time that category has struggled, it's primarily been because food
beliefs change," he said.
Over the past 15 years the category
has experienced highs and lows as
different diets - Atkins and paleo, to
name a few - have led consumers to
shift consumption habits. Mr. Cahillane
said it is the cereal industry's responsibility to do a better job at innovating
and renovating to make foods more relevant for today's food beliefs.
"(We need to remind) people that
cereal can be very important and a
great addition to a healthy diet," he
said. MBN
partnerships are possible because we
already have a fleet of delivery drivers
and the infrastructure created to support increased demand. We believe this
partnership model helps differentiate us
from our competitors and will take our
already successful delivery business to
new heights."
Panera said its apps and
e-commerce platforms have
driven more than 28 million
delivery orders so far in 2019.
As a result, delivery orders
now account for approximately 7% of Panera's overall sales, the company noted.
Going forward, Panera
said it will work to integrate its MyPanera loyalty program into orders
placed via its delivery partner sites. MBN
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September 10, 2019 / 11

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Milling & Baking News - September 10, 2019

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