Wheaties: No Longer a Champion Among Consumers

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Wheaties isn’t a hit with Americans anymore. Sales of the iconic cereal brand, once almost synonymous with breakfast, have fallen sharply over the last three decades, reports USA Today, sinking from 6.5% to roughly 0.5% of U.S. breakfast cereal market.

General Mills’ (NYSE:GIS) efforts to revive the brand — including endorsements by top-tier athletes like Peyton Manning, and Wheaties spin-offs, including recently introduced Wheaties Fuel — have fallen flat with consumers.

Research firm SymphonyIRI found that Wheaties Fuel generated a mere $5.2 million in annual sales outside of convenience shops and Walmart (NYSE:WMT), USA Today noted. The retail picture is even more dismal across the entire Wheaties brand, which sold fewer than 10 million boxes last year, a decline of 22.5% over the prior year. Overall, Wheaties sales fell 18.6% last year, down to $38.7 million.

With the American cereal market splitting between consumers looking for healthy offerings and those seeking quick, tasty breakfasts, Wheaties finds itself in the same boat as Kellogg’s (NYSE:K) Corn Flakes. Not nutritious enough for the health-conscious, but not sweet enough for consumers who like their cereal coated in sugar or in bright colors.

“It’s OK to be healthy, but they just haven’t stood out,” Lloyd Moritz, editor of The Breakfast Bowl, told USA Today. “Cheerios has successfully rolled out new flavors and Special K has latched on to fitness consumers and the women’s market.”

Lagging sales of Wheaties have been offset by better results for General Mills’ more popular brands including Honey Nut Cheerios, Peanut Butter Multigrain Cheerios and Cinnamon Toast Crunch. GIS now controls about 32% of the U.S. breakfast cereal market.

Wheaties pioneered sports marketing, putting New York Yankees first baseman Lou Gehrig on its boxes in 1934.  Popular athletes on Wheaties boxes became a cultural mainstay for almost 70 years. However, as Wheaties slid, and the price of sports endorsements soared, more high-level athletes passed up the honor. “They used to have some really good stars on their boxes,” Moritz told USA Today. “We haven’t seen the same high-profile guys in recent years.”

With falling sales and declining popular influence, the future for Wheaties remains increasingly uncertain.


Article printed from InvestorPlace Media, https://investorplace.com/2012/04/wheaties-no-longer-a-champion-among-consumers/.

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