General Mills Tops Kellogg in Market Share for First Time – Brief Article
General Mills surpassed Kellogg Co. as the largest U.S. cereal company for the four-week period ending Dec. 5. General Mills had 29.8 percent of the market, based on pounds sold, while Kellogg dropped to 27.9 percent, according to supermarket data collected by Information Resources, Inc. (IRI). In 1998, Kellogg had 31.4 percent of the market to General Mills’ 27.7 percent, according to IRI. Purchases of General Mills’ cereals rose 4.1 percent during the recent four-week period, while purchases of Kellogg cereals dropped 14 percent.
General Mills’ share of the market has surged from less than 20 percent a decade ago as it developed cereals that are not easily copied by makers of discount and generic cereals and introduced new products. It also has done a better job than Kellogg of promoting its foods without having to rely on profit-eroding coupons and discounts, analysts said.
Meanwhile, Kellogg has been losing market share to cheaper knockoffs of its Corn Flakes, Rice Krispies and other mainstay cereals. Sales also fell as it cut back on promotions such as coupons and discounts to retailers in an attempt to bolster earnings.
The breakfast cereal manufacturing industry consisted of 48 companies operating 71 plants in the United States during 1997, according to the Census of Breakfast Cereal Manufacturers. Breakfast cereal manufacturers paid $2.6 billion for raw materials, and their aggregate shipments were valued at $9.3 billion. Ready-to-serve cereal shipments were valued at $6.9 billion in 1997, down 46 percent from five years earlier. Corn flakes accounted for 28.6 percent of breakfast cereal shipments in terms of value, followed by oat (16.8 percent), wheat flakes (16.5 percent) and rice (10.4 percent).
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