Eat ‘cereal for dinner’: Kellogg’s CEO’s money-saving tip hits sour note

Click to play video: 'Kellog CEO says company embracing ‘cereal for dinner’ strategy as food prices rise'
Kellog CEO says company embracing ‘cereal for dinner’ strategy as food prices rise
WATCH: Kellog CEO says company embracing 'cereal for dinner' strategy – Feb 27, 2024

WK Kellogg CEO Gary Pilnick went against the grain when he said financially struggling families should eat cereal for dinner — a suggestion that had many critics insisting Pilnick is cuckoo for Cocoa Puffs.

During an interview with CNBC last week, Pilnick praised the affordability of cereal and pointed to a year-old campaign from Kellogg that encouraged consumers to fill their dinner plates bowls with Frosted Flakes, Froot Loops and Frosted Mini-Wheats.

“The cereal category has always been quite affordable, and it tends to be a great destination when consumers are under pressure,” Pilnick said. “We’ve got to reach the consumer where they are, so we’re advertising about cereal for dinner.

“If you think about the cost of cereal for a family vs. what they might otherwise do, that’s going to be much more affordable.”

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Pilnick’s comments come at a time when many families in Canada and the U.S. are struggling with the cost of groceries. On home soil, the federal government says it’s still working to stabilize prices, including through more grocery competition. In the meantime, a number of grocery staples like meats, cheeses and fresh fruit and vegetables remain unaffordable to many shoppers.

Click to play video: 'Could a grocery code of conduct cut food prices?'
Could a grocery code of conduct cut food prices?

“In general, the cereal category is a place that a lot of folks might come to because the price of a bowl of cereal with milk and with fruit is less than a dollar,” Pilnick said.

When pressed by CNBC’s journalists about whether the Kellogg’s “cereal for dinner” marketing might be poorly received, Pilnick said the campaign is “landing really well right now.”

“Cereal for dinner is probably something that’s more on-trend now and we would expect to continue as that consumer is under pressure,” he maintained.

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WK Kellogg has not commented publicly.

Regardless, Pilnick’s “cereal for breakfast” pitch attracted a loud wave of criticism online, with many suggesting that Pilnick — who earns a base salary of US$1 million (about C$1.35 million), according to a 2023 SEC filing — is probably not choosing Froot Loops for his own suppers. (Pilnick was also expected to earn over US$4 million more in additional target incentives in 2023.)

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The company’s cereal-for-dinner pitch is not new.

In 2023, Kellogg released a commercial with the slogan, “Give chicken a night off.” The ad saw Kellogg’s breakfast cereal mascots Tony the Tiger and Toucan Sam encourage a family with two young children to choose cereal at the dinner table.

The company earned some flak for advertising cereals like Frosted Flakes — which has 14 grams of sugar per one-cup serving — as a dinner meal substitute for children.

In their last quarter, ending in December 2023, Kellogg reported US$651 million (about C$880 million) in reported net sales.

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Pilnick isn’t the only person in a position of power to give unwelcome financial advice to consumers. Canadians might recall Chrystia Freeland, Canada’s Minister of Finance, encouraging people last year to cancel their Disney+ subscriptions in order to abide by stricter household budgets. At the time, Freeland was accused of being “smug,” “elitist,” “clueless” and “entitled.”

Overall annual inflation in Canada came in at 3.4 per cent in December, an uptick from the previous month, much to do with gas prices and controversial price hikes at the grocery store. Food inflation itself was flat in December, coming in at 4.7 per cent, unchanged from the previous month, but down from October’s 5.4 per cent pace.

Click to play video: '‘Another manifestation of corporate greed’: Food shoppers angry about inflation, deflating discounts'
‘Another manifestation of corporate greed’: Food shoppers angry about inflation, deflating discounts

A number of food staples did, however, see price growth drops from December to January, including breakfast cereal (down 2.3 per cent), pasta mixes (down 6.6 per cent), rice (down 1.4 per cent), frozen fruit (down 2.9 per cent) and margarine (down 4.3 per cent). (Figures not seasonally adjusted.)

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— With files from Global News’ Sean Previl 

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