There are no two ways about it – the cold cereal business is a tough business.

Although breakfast consumption is up, cold cereal sales have been down at a 1.5% compound annual growth rate from 2008-2013 – and this negative trend is accelerating. What are consumers eating? They’re opting for alternatives like yogurt, bars and eggs. Why these options?

1. Convenience: Although cereal is easy to prepare and very convenient to eat, it is not convenient when compared with yogurt or a bar.

2. Health Benefits: The big trend across food categories is “Protein”. As foods with higher protein satiate hunger for longer, a line is often drawn between protein, hunger satiation and weight loss. And with many diets that discourage or limit carb consumption, it isn’t hard to see one of the reasons why grain derived cereals are on a decline.

It is worth noting that while eggs are relatively high in protein, they’re not convenient to prepare –  and yet consumption of eggs as a breakfast food is rising. This phenomenon is in part the result of consumers opting for higher protein breakfasts that require more preparation time when they aren’t on the go.

Another interesting point about consumers is the contradiction between their expressed food preferences and their actual consumption. According to research from NPD, although consumers say they want healthier items for all meals, including breakfast, consumption patterns show that they indulge often.

One place where this propensity to indulge can be seen is with breakfast cereal:

Of the top 10 selling cereals in the US, 8 have at least an indulgence-level 9 grams of sugar per serving. Cheerios and Rice Krispies are the two lower sugar options with 1g and 4g of sugar per serving respectively.

As an aside, If you’re thinking “wait – what about Raisin Bran?!? that can’t be high in sugar” – at 18 grams of sugar per serving it is actually the highest sugar option on the list. That sugar is split between the naturally occurring sugar found in raisins and the sugar coating sprayed on the flakes and raisins – Kellogg’s does not break out the two kinds of sugars on the nutrition facts panel.

The interesting breakfast cereal consumer insight is that although consumers have matured over time, as they’ve grown from children to adults their cereal preference has not. This insight has been the driving force behind many recent General Mills cereal campaigns like this one for Lucky Charms.

And that brings us to our Marketing Art discussion. I love this recent digital execution from Kellogg’s. Here are stills from each frame of the banner ad.

 

and then when your mouse is close to the ad, the little frosted wheat guy waves at you

 

I love this ad for several reasons.

1. It speaks wonderfully to the consumer consumption dichotomy

Breakfast consumers want to be healthy *and* they also want to indulge. They believe “adults” are supposed to eat healthier cereals for breakfast, but something inside them still wants to indulge and eat “like a kid”. The marketers at Kellogg’s leverage their product’s design – the two sides of the biscuit (healthy whole grain wheat and deliciously sweet frosting) to beautifully show how their cereal is a perfect fit for the two sides of their target consumer.

I also love how the Kellogg’s marketers give this particular segment and their dissonant eating preferences a name, “Kidult”, that perfectly speaks to their target’s desire to be grown ups who also experience the occasional joys and happiness of every day life as a child would.

The Kellogg’s target consumer is responsibly playful and mindfully indulgent. This cereal fits who they are perfectly – and that fact is communicated well.

2. It differentiates Kellogg’s from the competition

General Mills wants everyone to know that their Big G portfolio cereals all have whole grain as the first ingredient. Included in that portfolio is #5 top selling cereal, Cinnamon Toast Crunch. Kellogg’s Frosted Mini Wheats is #6.

Though Cinnamon Toast Crunch has whole grains, what stands out most about their cereal is the sweet sugar and cinnamon that covers each flake (remember “The taste you can see”?). What’s most noticeable about Frosted Mini Wheats? The whole grains you can see. Frosted Mini Wheats are just as sweet as Cinnamon Toast Crunch, but they *look* healthier. And this appearance appeals more to the “responsible adult” side of the responsibly playful and mindfully indulgent “Kidult” target.

3. Smart Partnership/Channel Strategy

One thing that really caught my eye when I first saw this ad was the call to “Shop Now”.

Clicking this ad takes you right to Amazon where prime members can get a box of Frosted Mini Wheats for $3.05 as part of Amazon’s new Prime Pantry program – which charges a flat $6 delivery fee for all grocery orders. This cereal is also available as an add-on item at the same price.

I think this is a smart move for Kellogg’s as it makes choosing cereal for breakfast a little easier.

I also like this alternate channel strategy for Kellogg’s because it acknowledges a potential shift in consumer behavior at retail. If consumers are looking to the dairy/refrigerated aisles for breakfast options, then the cereal aisle is probably getting lower foot traffic.

Investing in Amazon as an alternate channel gives Kellogg’s the opportunity to recapture some of the dollars from foot traffic lost at retail.

I like this execution for Amazon because it does two things:

1. It gives holdouts a reason to sign up for an Amazon Prime membership

With this ad, Amazon is saying: “There are lots of benefits to being an Amazon Prime member – here’s another way that Amazon Prime can add value to your life”

2. It serves as an awesome way to get Amazon Prime members more engaged with Amazon.

Amazon’s year-over-year sales growth rate has been down. There are several things that could be contributing to this slowdown, but as we’ve discussed before, one way to grow sales is to get your existing customers to buy more from you than they currently do. With Prime Pantry, Amazon is doing just that.

Let me know what you like and dislike about this ad campaign in the comments section below. Also let me know how you would make it better.

Until next time.