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Breakfast of Champions? Post Holdings Inc. and the Cold Cereal Market
The overall cereal market is projected to be an $11 billion market, with cold cereal making up 87% of the category. There is significant competition across the different segments of the market with a small number of competitors, primarily, Kellogg’s, General Mills, PepsiCo, and Post Holdings, with a fair amount of the market controlled by small companies and private labels. Post Holdings has a 10% share of cold cereal in the United States. In this market, it has had flat sales (-0.6%) during the 52 weeks ending April 18, 2015. While it did experience declines among more healthy brands – 11.1% for Shredded Wheat and 9.3% for Grape Nuts – Fruity Pebbles and Cocoa Pebbles brands saw increases of 12.6% and 6.1%, respectively. At the same time, the success of healthy brands cannot be disputed in the market. Two smaller manufacturers that focused on natural and organic brands have seen some impressive growth over the past year. Nature’s Path sales rose from $70.2 million to $77.3 million during the 52-week period, and KIND LLC saw sales of its Healthy Grains granola clusters cereal increase from $23.6 million to $41.5 million. Consumers’ increasing interest in natural products coupled with the desire to support smaller manufacturers is driving this growth. These smaller manufacturers are cutting Post out of the market. Post has seen several of its major competitors specifically target the nostalgic older consumer and millennial segment. Kellogg introduced Krave, a chocolate cereal targeted at Millennials. General Mills relaunched French Toast Crunch in 2015, which it had removed from its shelves in the 1990s. Investigate the market for cold cereals in the United States, with specific emphasis on the adult market. Also research Post Holdings, getting to know the many brands which Post owns. Output: You work in strategic brand management for Post Holdings, Inc. What should Post do to defend their large manufacturing position against smaller brands? Should they embrace a specific adult consumer segment? Your final decision can include any brands within Post’s holdings, not just cereal. Your presentation and executive summary should include:
DELIVERABLES (Submit Here) Powerpoint that includes:
Executive Summary (1 page) that includes:
Use a combination of library resources and web resources. Your team will be evaluated on the following: