The Kellog Analysis by Nielsen

The Kellogg Company is one of the world's biggest producers of grain products, specializing in breakfast cereals with factories in 21 countries.

The history of Kellogg’s started over one hundred years ago in the USA with the aim to fuel better days for a lot of families all over the world. In 1898 Will Keith Kellogg, the company’s founder, together with his brother Dr. John Harvey Kellogg, created a tasty recipe for Kellogg’s Corn Flakes. Eight years later Will Keith Kellogg decided to found “Battle Creek Toasted Corn Flakes Company” in Battle Creek, Michigan. The first expansion abroad was in 1914 Kellogg’s starting with Canada, as well as the range of products started to increase.

Nowadays consumers can find various Kellogg’s products in more than 180 countries. The most famous products are All-Bran, Kellogg’s Corn Flakes, Coco Pops, Frosties, Special K, Honey Loops, Rice Krispies and many more.

Kellogg’s produces not only cereal, but convenience foods and snacks. In 2012 the company acquired chips brand Pringles from Procter & Gamble, and became the world's second largest snack food company after Pepsi Co. Together with the trend of healthy and clean eating, as well as an increasing demand for bio foods in the last years, Kellogg’s expanded it’s production to organic production. In 2016 Kellogg's acquired 51% of Vita+ Naturprodukte GmbH, an Austrian company known for their brand “Verival Bio”, producing organic porridge, muesli, granola, cereals and other products in this category.

Fast-Moving Consumer Goods (FMCG) is one of the most competitive sectors. All small details should be taken into consideration in order to win at the different markets. In order to reach a success in such innovative and dynamic industry, Kellogg’s should not only have a broaden knowledge about consumers, logistics, pricing and places where to sell the products, but also understand and find the right sales promotions and customer-attracting packaging in order to maximize profit margin.

According to a recent Nielsen research, the amount of money European families paid for groceries (on the widest possible basket of product categories) increased by 2.4% in the first quarter of 2019, on par with the growth of 2.5% in fourth-quarter of 2018 (Nielsen, 2019). These results are coming from the recent Nielsen Growth Reporter that compares dynamics all over the markets (in a sense of value and unit growth) in the Fast-moving consumer goods industry across Europe. It is based on the volume and value sales measurement in 21 European countries, and covers sales in all grocery, hypermarkets, supermarkets, discount and convenience channels (Nielsen, 2019). It is based on the widest possible basket of product categories that Nielsen measures in each of these countries and channels (Nielsen, 2019).

Nielsen reported that after a recent slowdown of the economy all over European markets in the second half of 2018, present marcoeconomic indicators show economic pickup at at +1.2% with the European Union zone GDP for the first quarter of 2019 (Nielsen, 2019). Fast-moving consumer goods uptake by consumers is now at stable levels comparing to the last quarter of 2018, assuming that this quarter’s Fast-moving consumer goods nominal growth level was +2.8% comparing to the moving annual total of the last year (Nielsen, 2019). The volume growth was in the first quarter of 2019, nonetheless, was at -0.5%, that follows a similar pattern from fourth-quarter of 2018 (-0.3%) (Nielsen, 2019).

The report of Nielsen states that in the most countries of European Union there is an effect in fast-moving consumer goods sector purchasing by consumers due to the inflation (up by 1.7%) and price increase that lead to consumers’ buying fast-moving consumer goods impacted by 0.5% lesser percentage of items purchased and consumers paying 2.9% more per unit than they paid in the same quarter comparing to the last year (Nielsen, 2019).