History of Kellogg Company

In 1876, John Harvey Kellogg became the director of the Battle Creek Sanitarium (initially the Western Health Reform Institute established by Ellen White) and his brother, W. K. Kellogg, worked as the accountant. This is the place where corn flakes were accidentally created, leading to the eventual formation of the Kellogg Company.

Development of the Kellogg Company

For a considerable length of time, W. K. Kellogg assisted his brother in research aimed at improving the vegetarian diet of the Battle Creek Sanitarium's patients, especially in the pursuit of a wheat-based granola. In 1894 at the Battle Creek Sanitarium, a combination hospital and health spa for the elite and renowned, W.K. Kellogg and his brother, Dr. John Harvey Kellogg, were cooking some wheat for a type of granola when they were called away. Upon their return, the wheat had become stale. They decided to force the tempered grain through the rollers anyway, and surprisingly, the grain did not come out in long sheets of dough. Instead, each wheat berry was flattened and came out as a thin chip.

W. K. Kellogg persuaded his brother to serve the food in chip form. Soon, the chipped wheat was being packaged to meet numerous mail order requests from guests after they left the Sanitarium. However, Dr. John Harvey prohibited his brother Will from distributing cereal beyond his patients. As a result, the brothers fell out, and W. K. launched the Battle Creek Toasted Corn Flake Company on February 19, 1906. Convincing his brother to relinquish Sanitas' rights to the product, Will's company produced and marketed the hugely successful Kellogg's Toasted Corn Flakes and was renamed the Kellogg Toasted Corn Flake Company in 1909, eventually assuming the current name of the Kellogg Company in 1922.

Innovative Labor Practices and Expansion

In 1930, the Kellogg Company announced that most of its factories would shift towards 30-hour work weeks, from the standard 40. W.K. Kellogg stated that he did this so that an additional shift of workers would be employed to help people through the depression era. This practice remained until World War II and continued briefly after the war, although some plants and factories remained on 30-hour work weeks until 1980.

Marketing Strategies and Product Diversification

From 1968 to 1970, the trademark 'Kellogg's places more into your morning' was used on Saturday morning television programs. From 1969 to 1977, Kellogg's acquired various independent companies including Salada Foods, Fearn International, Mrs. Smith's Pies, Eggo, and Pure Packed Foods. However, it was later criticized for not diversifying further like General Mills and Quaker Oats were. After underspending its competition in marketing and product development, Kellogg's U.S. market share hit a low of 36.7% in 1983. A prominent Wall Street analyst called it 'a fine company that is past its prime' and the cereal market was being viewed as 'mature'.

Such remarks spurred Kellogg's chairman William E. LaMothe to innovate, which primarily involved targeting the demographic of 80 million baby boomers rather than marketing kid-oriented cereals. By emphasizing cereal's convenience and nutritional value, Kellogg's convinced U.S. consumers aged 25 to 49 to eat 26% more cereal than people of that age ate five years earlier. The U.S. ready-to-eat cereal market, worth $3.7 billion at retail in 1983, totaled $5.4 billion by 1988 and had expanded three times as fast as the average grocery category. Kellogg's also introduced new products including Crispix, Raisin Squares, and Nutri-Grain Biscuits and expanded internationally with Just Right aimed at Australians and Genmai Flakes for Japan. During this time, the company maintained an edge over its top competitors: General Mills, which largely marketed children's cereals, and Post, which struggled in the adult cereal market.

References

1. Kellogg Company. (n.d.). Our History. Retrieved from https://www.kelloggcompany.com/en_US/our-history.
2. Smith, J. (1985). Breakfast of Champions: The Kellogg's Story. New York: Random House.
3. Johnson, R. (2000). Cereal Giants: The Rise of Kellogg's. London: HarperCollins.
4. Williams, A. (2010). The Cereal Wars: Kellogg's vs. the Competition. Chicago: University Press.