No "Cheer" At Cheerios

Most everyday, I start the day with a bowl of Cheerios or Shredded Wheat—great with some strawberries or a banana. Cheerios is a General Mills brand; the original Shredded Wheat is a Post product. Actually, I eat the Kroger store brand of each and per a 9/18/14 WSJ article, a lot of other people are also. (Stick with me; I’m getting to an important leadership point.)

In a recent AP interview, General Mills CEO Ken Powell said that Cheerios sales are “down somewhat” and in the WSJ article “blamed its marketing and promotions strategy for much of the disappointment….” Really? Sales are down because your ads aren’t effective? What could be more effective than a little girl serving Cheerios to her dad because it is good for his heart?

I asked Dottie why she buys Kroger Toasted Oats instead of General Mills Cheerios. Because it tastes better? No. Because you get more Kroger points? No. Because we own Kroger stock? No. (We don’t.) Because they don’t put toys in Cheerios anymore? No. The answer is simple: Cheerios are almost twice as expensive as Kroger Toasted Oats (26.6¢/oz. vs. 14.2¢/oz.). Now on the shelf, Cheerios only looks 50% more expensive because their nearly-same-size box contains only 12oz. vs. 14oz. in the Kroger box. (You have to look at the fine print to discover this little subterfuge.)

Max De Pree, retired CEO of Herman Miller says in Leadership Is An Art, “The first responsibility of a leader is to define reality.” The leadership at General Mills would benefit from reading De Pree’s book.

Here is the Cheerios reality as I see from a customer perspective:

The problem isn’t marketing; I’ve never seen an ad for Kroger Toasted Oats.
Whole grain oats in little round circles are a commodity in the 2014 world of groceries. Price—not brand—is the main driver for sales.
People may pay 20±% more for the Cheerios brand, but not twice as much.

Is your organization “down somewhat” in sales? Attendance? Donations? __________? The cure will start with an honest assessment of reality—no matter how painful. Cheerios first hit grocery shelves in 1941; for decades it was the choice of boys (including me) and girls all over America. No more. It’s time for General Mills to accept that fact. What fact do you need to accept?

If this post was interesting and useful, please forward it to friend.