Private label vs brand at Kellogg’s

Kellogg has continually doubled down on advertising in the recession, citing brand loyalty as the best buffer to private-label penetration. While it has increased spending, the company is also driving efficiency in its spend by way of bundling products, reducing the number of TV commercial shoots and driving more projects online, where ROI has proven to surpass that of TV, in some cases by a factor of more than two.

As a result, Kellogg continues to build sales in the highly competitive and very mature ready-to-eat cereal category, up 2%, but lapping a stunning gain of 7% a year ago. Some iconic Kellogg cereals such as Corn Flakes, Frosted Flakes and Raisin Bran have spawned a host of lower-priced competitors. But CEO David MacKay said the company now focuses on its eight best-performing cereals, including the Kashi organic brand, and this strategy has been integral to Kellogg’s continued success.

Advertising Age