Cereal maker Kellogg turns 100


  • Business
  • Wednesday, 15 Feb 2006

BATTLE CREEK, Michigan: It was 1894, and the chief physician at the Battle Creek Sanatorium and his younger brother were experimenting in the hospital's kitchen, trying to create a better-tasting replacement for the nutritious but bland bread served to patients. 

Instead, Dr John Harvey Kellogg and William Keith Kellogg ended up accidentally inventing flaked cereal. The discovery eventually led the business-savvy “W.K.” Kellogg to establish what is now the Kellogg Co, which marks its 100th anniversary on Feb 19. 

The business has grown into the world's largest maker of ready-to-eat cereals, with net sales of US$10.2bil in 2005. Its products, including Rice Krispies and Special K cereals, Eggo frozen waffles and Keebler cookies, are marketed in more than 180 countries. 

While founder W.K. Kellogg was a firm believer in healthy nutrition and exercise, his company has come under fire for selling sugary cereals to children and contributing to the growing epidemic of obesity in America. 

Some of Kellogg’s popular cereals

Kellogg and its largest US competitors – General Mills Inc, Kraft Foods Inc (makers of Post cereals) and PepsiCo Inc (Quaker Foods) – have long emphasised the importance of good nutrition in its cereals and other breakfast products, fortifying them with vitamins, minerals and fibre. 

Now, they are in a race to find new ways to improve the nutritional value of their products – and new ways to market them. 

In fall 2004, General Mills announced that all of its cereals would be made from whole-grain flour, which is healthier than the wheat flour or refined corn meal used in most cereals. 

Earlier that year, General Mills and Kellogg started using less sugar in some of their children's cereals. 

Last December, Kellogg announced that it will start using oil this year made from genetically modified soybeans in place of the partially hydrogenated oil and saturated fats found in some of its crackers and snacks. The soybean oil may also be used in some frozen foods. 

With the first baby boomers turning 60 this year, Kellogg is developing products for older, health-conscious consumers aimed at strengthening bones and even improving memory, said Donna Banks, who heads the company's research and development. 

When Kellogg announced its fourth-quarter earnings last month, president and chief operating officer David MacKay told industry analysts during a teleconference that they can expect to hear more in the future “about health and wellness, not only from Kellogg but from many companies.” 

Marvin Goldberg, a marketing professor at Penn State University whose research has focused on the effectiveness of advertising directed at children, said cereal commercials can be aimed at parents, children or both. 

“My bet is that you could plot the level of sugar in a cereal with the proportion of advertising that is targeted to kids versus say both parents and kids or only the parents,” he said. – AP  

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