- In his first interview since Post Foods’ merger with Mom Brands lead to the creation of Post Consumer Brands in 2015, CEO Chris Neugent told the Star Tribune the company is focused on marketing, innovation and seeking out efficiencies within the business. He said the company tries to operate “like a start-up that was blessed with really great assets.”
- Post is currently working to improve the flavor, update the look of its branded cereals and reduce the size of its bagged cereal displays. The company also has discontinued poor-performing niche brands.
- The company's strategy has paid off so far, with net sales up 2% last year. One analyst called Post's growth “particularly impressive” considering the industry-wide sales decline in cereal.
Industry observers have been proclaiming for some time now that cereal is either dead or dying. This seems premature, not to mention melodramatic. While it’s true that manufacturers like General Mills, Post and Kellogg have been outfoxed by fast-evolving consumer demand for less-processed products with healthier, on-trend ingredients, the industry is still adjusting to the new landscape. And change doesn’t come quickly for companies that oversee thousands of employees and numerous billion-dollar brands.
Cereal makers have gradually rolled out new formulations with added protein, fiber and whole grains. They’re phasing out artificial flavors and colors and reducing sugar amounts. Many companies are adding ancient grains, superfoods, seeds and nuts.
Some manufacturers, like General Mills and Kellogg, are seeing a slowdown in sales, while all remain committed to cereal. Whether manufacturers can ever fully catch up to consumer demand is uncertain. In the meantime, Post Consumer Brands may have the answer for how to achieve measurable growth in the embattled industry: Small, focused changes centered on efficiency and core strengths throughout the business. This includes straightforward measures, like phasing out poor-performing brands, improving the taste of products, investing in advertising and collaborating more closely with retailers.
“It’s not real sexy, but it makes money,” Neugent said.
The bigger problem for cereal makers may be consumer preferences for portable meal options. Millennial consumers in particular are turning to bars, shakes and other on-the-go breakfast solutions. According to a recent survey from market research firm Mintel, 40% of millennial shoppers believe pouring a bowl of cereal is too much work.
Still, cereal companies are making strides in this space. General Mills recently came out with “on the go” pouches of its Golden Grahams, Fruity Cheerios and Cinnamon Toast Crunch cereals, while Post has come out with breakfast shakes and a Honey Bunches of Oats infused breakfast biscuit. With further portability innovations in the pipeline, along with plans to inspire cereal consumption outside of breakfast time through marketing and advertising, it’s clear that while cereal companies may be down, they are definitely not out.