Kellogg to Cut Work Force by 7%, and That's Not All

Kellogg to cut 7 pct of workforce by 2017, profit rises 3 pct

Dive Brief:

• Kellogg Company announced its third-quarters earnings results on Monday, and the news came accompanied by word that it will eliminate 7% of its workforce by 2017.
• The company saw a 3% rise in quarterly profits as net income for the quarter hit $326 million (90 cents per share), up from $318 million in the same quarter last year.
• Kellogg also announced a new "global growth and efficiency program" called Project K, meant to bolster its business ventures at home while seeking out opportunities for growth in markets abroad.

Dive Insight:

We all know that Kellogg is in a tough spot right now, as interest in cold cereal has been withering and breakfast habits in general have drifted toward other products. Still, the company saw production costs for cereal go down, and it's placing a great deal of hope in snack foods like Pringles.

Nov 4 (Reuters) - Kellogg Co reported a 3 percent rise in quarterly profit, helped by a fall in cereal-making costs, and said it would slash 7 percent of its workforce by 2017.

The company's shares rose 1 percent in premarket trading.

Net income of the world's largest cereal manufacturer rose to $326 million, or 90 cents per share, in the third quarter ended Sept. 28 from $318 million, or 89 cents per share, a year earlier.

The maker of Corn Flakes, Chocos cereal and Eggo waffles said revenue fell marginally to $3.72 billion.

Kellogg announced a new cost-cutting program called Project K to strengthen existing businesses in its core domestic markets and increase growth in developing markets.

The program is expected to result in total pre-tax charges of between $1.2 billion and $1.4 billion, the company said.

Best Overall Brands: Crest, Gillette, and Dove; and Kellogg, Heinz, and Kraft



The best overall brands in health and beauty, and food and beverage categories are Crest, Gillette, and Dove; and Kellogg, Heinz, and Kraft, respectively, according to a pair of new Forrester rankings based on online surveys this year of 4,500 adults. The Boston-based market research firm argues that brand health comes from the extent to which it is trusted, remarkable, unmistakable, and essential. If you turn that into an acronym, you get Forrester's TRUE formula for brand equity.


In the survey, from which the rankings are derived, consumers said Dove provides "a consistent experience every time I use the brand," and has "products/services that consistently deliver on their promises." Thanks in part to its campaign about authentic, versus manufactured, beauty the company has gone from a $200 million soap brand in the 1990s to a $4 billion mega-brand today, notes Forrester.

The research firm suggests brands shouldn't expect miracles based on spikes in consideration from a new product, or sudden interest from a new ad campaign. Dove's slow and steady pace is exhibit A: trust over buzz wins, says the consultancy. The firm says P&G's Crest and Gillette also lead in their categories because of this, with the latter leading among men between 25 and 34. The firm says that by contrast, younger, more niche brands like Axe haven't yet built trust, and haven't become "essential" to consumers. The brand, per Forrester, does resonate with consumers 18 to 34.

Dove, meanwhile, does best with women 40 to 49, with consumers overall preferring Dove over all other brands based on the levels of trust consumers have for it. The survey found, for example, that the brand provides "a consistent experience every time I use the brand," and scores well for "having products and services that consistently deliver on their promises."

Thanks to a refocus on athletes, Gatorade did well in the food and beverage survey in terms of consumers' sentiment that the brand helps athletes "to always perform at their peak." Forrester said the PepsiCo unit's marketing strategy around affiliating the brand with athletic performance, plus touting scientific research to back its claims, puts it above Coke on the brand ranking with its core target audience of 20-something men. The firm also says Gatorade's efforts have helped return it to a dominant -- 46% share -- position in the global sports drink sector.
Generally speaking, the study finds that familiar food brands have the highest TRUE ranking and "old-guard" brands are more trusted by upstarts. And -- not surprising -- as trust drops, so does preference. For example, Vitaminwater, whose preference level is under 20%, has the lowest trust score of any brand in the competitive set. Above Vitaminwater is Snapple, which is bested, in terms of preference, by Pepsi, Lipton, Gatorade, Kellogg, Nestle, Kraft, Coke and Heinz.

Article Written by Karl Greenberg, Yesterday, 2:34 PM for Marketing Daily - original post can be found here.http://www.mediapost.com/publications/article/204498/forrester-healthy-brands-are-true.html#axzz2ZFVaGIQj