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This team would turn the traditional Kellogg way of creating products on its head. Instead of having the food technicians toil away in their labs experimenting with tastes and textures, the marketing folks hunted for ideas that suited the advertising needs at Kellogg first and worried about pleasing the palates of consumers second. The driver for this reversal was the recognition that branding was overwhelmingly important, explained Martin. The Kellogg icons—whether Rice Krispies or Frosted Flakes or Special K—all had distinct identities, carefully honed by hundreds of millions of dollars of advertising. Increasingly, image was all that stood between these icons and the less expensive private label knockoffs. Each brand had its own image to convey. Corn Flakes suggested tradition. Frosted Flakes, fun. Special K, nutrition and strength.

Kellogg had labored to burn these brands into the minds of American consumers over the years, and with this as their guide, the team would reject whole slews of great-tasting candidates that did not fit the image they
needed to convey for each of the brands. “They’d come in with seven or eight different varieties, in little bowls, and we’d chow down and say, ‘Well, these taste good but they don’t really live up to the brand concept,’ ” Martin said. The war room at Kellogg began generating its own wild ideas for cereals that seemed to have blockbuster potential, but no one knew if they could actually be made. A case in point was the team’s takeoff on its legendary sweet snack Rice Krispies treats.

The concept drew on the psychology of perceptions. If a cereal could evoke the joy of an afternoon snack, it could generate sales not only as a breakfast food but also as a snack, in and of itself. Kellogg had made Rice Krispies since 1927 and had been promoting the homemade dessert—a combination of cereal, butter, and marshmallow—on the side of its box for nearly as long. What the team saw when they looked at these two parts—the cereal and the dessert—was a dessert-like cereal called Rice Krispies Treat Cereal that would have a huge, built-in, and powerful driver: Its homey image would evoke happy childhood memories for the moms and dads who would buy cereal for their kids. But when the team dispatched the technicians to turn this vision into reality, they came back weeks later and said they could not make it work. In trying to mimic the dessert, they had ended up with gooey clumps that turned to mush as soon as they were combined with milk. “Mush in the bowl was death,” said Martin. “Kids, especially, like crunch.”

Even when they upped the sugar content to get more crunch, they could not make it work. The technicians could not get both the crunch and the gooey marshmallow to coexist once milk was added. That’s when the marketing folks applied some of their magic. They set up focus groups to ask consumers about the idea of Rice Krispies Treat Cereal, and the consumers said the cereal didn’t actually have to be gooey like the dessert. It just had to have the
flavor
of gooey. In food marketing lingo, this is known as “permission.” It’s what people allow manufacturers to take away from their food in exchange for convenience or price. Yes, the consumers would have preferred a bowl of the real Rice Krispies treats they grew up on, but they were willing to settle for less. “The lightbulb moment finally
came when consumers gave us that permission,” Martin said. “We didn’t have to be literal. We only needed the flavor to be spot on.”

Launched in 1993, Rice Krispies Treat Cereal helped catalyze Kellogg’s new marketing-driven development scheme. Strong sales that first year rocketed the cereal to eleventh place in the company’s vast lineup, handily beating out Smacks, Cocoa Krispies, and most of the company’s “better-for-you” brands like NutriGrain and All-Bran. The TV commercial that heralded the launch, crafted by Leo Burnett, captured the concept perfectly. It depicted a plate of Rice Krispies treats cut into squares and stacked in layers five high, spinning magically into a large bowl of the cereal. The bowl looked like it easily held four or five servings—a sugar load of eight teaspoons, as much as in a can of Coke. And as the kid in the ad dug in with gusto, the narrator exclaimed, “What a thought! The taste of Rice Krispies treats, in a big way!”

T
here was only so much the product development team could do for Kellogg, however. New products are exceedingly difficult to bring to market, and they fail far more often than they succeed. By 2005, Kellogg’s share of the cereal market had slipped again, even further this time, falling below one-third as the private label grocery brands grew to nearly half its size. If Kellogg was to regain its supremacy, it needed to invent ways to reinvigorate its existing brands. For this, the company turned once again to the marketing side of the business, including the
advertising specialists from Leo Burnett. Based in Chicago, the agency had always distinguished itself—and proudly—from the New York firms by being homey and a little corny. Its creations included the Jolly Green Giant, Charley the Tuna, and Tony the Tiger. The growing consensus among the advertising trade, however, was that homey no longer worked as well as edgy.

So Leo Burnett got edgy.

In 2004, it rolled out a new campaign for one of Kellogg’s marquee cereals, Apple Jacks, which embraced this change. In the commercial,
three girls sit around a table eating the cereal as two cartoon characters appear. One is a cinnamon stick named CinnaMon, who is agile and amiable, tall and thin, with a West Indian accent. The other is an apple named, astonishingly, Bad Apple. He is short, round, grouchy, and scheming.
“When you pour a bowl of Apple Jacks cereal,” the voice-over said, “sweet CinnaMon races to you. But there’s a Bad Apple who’s trying to get there first.” And with that, the race is on. CinnaMon is jumpy with energy as he surfs subway cars, hops through open windows, and leaps park benches. Bad Apple, the dumpy grouch, gets his due at every turn. He trips, stumbles, is smashed into pieces. The voice-over delivers the punch line: “Once again the sweet taste of CinnaMon with new CinnaMon-shaped marshmallows … is the WinnaMon.”

Why Kellogg felt compelled to go after the apple is not entirely clear. Forty years earlier, when Apple Jacks was invented, fruit in the cereal aisle was novel and exciting. One of the cereal’s creators, William Thilly, was a sophomore at MIT interning at Kellogg for the summer, and he told me he had been inspired by the apple farm where he grew up.
“I was used to cooking with apples and knew it would fit in with lots of foods,” he said. The early advertising even stressed the nutritional power of apples, depicting a kid who was scrawny and bullied until he ate the cereal. The talking apple that appeared in these ads was big, strong, and friendly. Somewhere along the line, Kellogg appears to have started to worry that kids, in fact, didn’t like the taste of apples all that much, though it’s also not clear how much apple taste the cereal has. The largest ingredient in Apple Jacks is sugar, with three teaspoons per cup, or 43 percent of the cereal.

Kellogg responded to a complaint from the Better Business Bureau by agreeing to give the apple a softer demeanor, but insisted that children who saw the ads came away with the view that apple flavor was not an appealing taste in cereal, rather than apples themselves being bad. Consumer advocates, however, were aghast and worried about the potential damage to one of the central tenets of better childhood nutrition. The federal government had been redoubling its efforts to encourage children to eat fresh fruit, and
here was Kellogg giving it an evil face. “Though Apple Jacks contains very little apples—less apple or apple juice concentrate than salt—it is inappropriate for Kellogg to disparage the taste of apples,” the Center for Science in the Public Interest wrote to chief executive and chairman of the board of Kellogg, James Jenness. “Also, it is more likely that Apple Jacks tastes sweet because it has more sugar than any other ingredient, not because of the added cinnamon.”

Jenness was no ordinary Kellogg CEO. Traditionally, and to a degree that exceeded most other food companies, Kellogg had been run by men who worked their way up through the ranks, selling cereal and even driving a truck like Jenness’s predecessor, Carlos Gutierrez, had done. When Gutierrez stepped down in 2004 to become the Bush administration’s commerce secretary, however, Kellogg felt pressed to break with tradition. Jenness had never worked at Kellogg but had spent much of his career in advertising, at Leo Burnett. He had what Kellogg felt it needed to compete.
“With the game we’re in and the quality of the competitors, it’s dog eat dog,” Jenness told a group of Rotarians after he’d been on the job for two years. “The moment you let up … you’re gonna get nailed.”

At its peak, Apple Jacks held no more than 1 percent of the cereal market, tenth place in Kellogg’s own lineup. Yet, as the company pushed to regain its dominance, even the smallest brands had their marketing campaigns honed to maximize sales. For the largest brands, Kellogg would pull out all the stops the moment they showed even the slightest sign of weakness.

In 2006, Frosted Mini-Wheats—the largest brand in the Kellogg stable, next to Frosted Flakes—wasn’t just starting to flag. It was in the midst of a full-blown identity crisis. The problem was bran, with its halo of health. Flour that is made from the entire grain, including the bran, had become the rage in the cereal aisle. Nutritionists were linking bran to lower cholesterol, less heart disease, better intestinal health, and a reduced risk of obesity, and federal officials warned that Americans were not eating enough of it. Kellogg’s rivals at Post had just pulled off a striking feat:
Spending a mere $12 million, a pittance in cereal advertising, on an ad campaign that touted their whole grains,
Post had reversed a seven-year slump in its Grape-Nuts and Shredded Wheat brands and sent their sales soaring by 9 percent. Kellogg had whole grains in its Frosted Minis, too, but with more than two teaspoons of sugar in a single cup, they were a harder sell to people who were looking to be healthy.
In an analysis of the situation, Kellogg concluded that the Frosted Mini-Wheats brand had “lost its connection” and “needed an insight that ran deeper than basic nutrition and into the hearts of consumers.” The company went on an offensive to reverse its fortunes.

Kellogg didn’t cut back on sugar to emulate Grape-Nuts. Fundamentally, the allure of the Frosted Mini line was all about sweet. Even the names of its product extensions—Cinnamon Streusel, Little Bites Chocolate, Vanilla Crème—evoked dessert. The company couldn’t suddenly undermine that foundation. This was the cereal’s
branding
. It was still trying to appeal to kids, and kids still wanted dessert for breakfast. But it couldn’t afford to lose the people it needed to make the sale: parents. To convince them, Kellogg devised an ad campaign that sold Frosted Minis as brain food.

The ads evolved, culminating in a commercial of early 2008 that centered on the premise that Frosted Mini-Wheats would help children get better grades.
“Help your kids earn an A for attentiveness,” the company said in a media release that touted the ad campaign.

The scene was a classroom. A teacher standing at the whiteboard loses her train of thought. “Okay,” she asked the class. “Where were we?” Her young students looked weary, slumped at their desks. They used their arms only to prop up their heads. One boy shot his hand into the air, bright-eyed and eager, fingers waving. “We were on the third paragraph of page 57, and you were explaining that the stone structures made by ancient Romans were called aqueducts,” he said. “And as you were writing that up on the board, your chalk broke. Into three pieces.”

“Right,” said the teacher, amazed.

Then a voice-over brought the message home: “A clinical study showed kids who had a filling breakfast of Frosted Mini-Wheats cereal improved their attentiveness by nearly 20 percent. Keeps ’em full. Keeps ’em focused.”

The ad ran widely on TV, the Internet, and various modes of print, including the sides of milk cartons. One could almost imagine stressed-out parents doing the math on what, exactly, a 20 percent boost would mean for their own kids.
Let’s see. Billy got a 70 on his last test. Add 20 percent, that’s an 84. A solid B!
There was just one hitch: The claim wasn’t true. The clinical study cited in the classroom campaign had, in fact, been commissioned and paid for by Kellogg. That should have made it suspect right off the bat, since, as every good scientist knows, the results of a study can be preordained by its design. But the truly remarkable aspect of the campaign is that the company study, even if taken at face value, did not come close to supporting the claim in its advertising. Half of the children who ate bowls of Frosted Minis showed no improvement at all on the tests they were given to measure their ability to remember, think, and reason, as compared with their ability before eating the cereal. Only one in seven kids got a boost of 18 percent or more.

These were the findings of the cereal industry’s old nemesis, the Federal Trade Commission, which had been trying to claw its way back to relevancy after the blows it suffered following the children’s advertising debacle of 1980. To its credit, the commission, quick to get wind of the suspect research behind the Frosted Mini ads, opened a legal proceeding. It called the ads false or misleading. Kellogg’s campaign, to be sure, was not in the same league as the ads run by its old rival, C. W. Post, a century earlier, in which he was accused of insinuating that his cereal, Grape-Nuts, would cure appendicitis. But with Kellogg spending $1 billion a year on advertising that can deeply influence America’s shopping habits, the commission was incensed.

“It’s especially important that America’s leading companies are more ‘attentive’ to the truthfulness of their ads and don’t exaggerate the results
of tests or research,” the FTC chairman quipped in a statement. “In the future, the commission will certainly be more attentive to national advertisers.”
^‡

But behind the scenes, the case stretched on for so long that the resolution may have done little to diminish the ad’s effectiveness in shaping consumer perceptions. The FTC declined to release detailed records of the case to me, citing its standard policy of not divulging information that might hinder the competitiveness of a company whose practices the commission scrutinizes. Kellogg declined to provide the scientific study on which the brainpower claims were based. (In 2011, Kellogg agreed to settle a separate class action lawsuit brought by consumers by paying up to $2.8 million in refunds on purchased Frosted Minis and donating $5 million worth of its products to charities.) “Kellogg has a long history of responsible marketing and takes any concerns about our advertisements seriously,” the company said to me in an email. “When we received feedback from the FTC, we adjusted our communications to incorporate the guidance.”