Kellogg's has the breakfast food blues: Consumers are continuing to skip cereal and snack bars and choose whole foods instead. The company reported $293 million in losses in the fourth quarter compared to $819 million in profits this time last year, according to The New York Times.
Underperforming aspects of Kellogg’s portfolio are to blame, such as the company's Special K brand, which targets those trying to lose weight. Kellogg’s Kashi brand, which includes its GoLean products, have also suffered weaker-than-expected sales, giving the impression grab-and-go products are on their way out.
According to Dispatch:
In its flagship North American division, sales for the breakfast-foods segment fell 7.7 percent for the period ending Jan. 3. Kellogg Co., based in Battle Creek, Mich., has been struggling to grow cereal sales as Americans increasingly reach for alternatives like Greek yogurt and breakfast sandwiches. CEO John Bryant has also conceded that Special K in particular has been hurt by changing attitudes toward health and dieting, with people showing more interest in overall ingredients, rather than just calories.
It’s unclear what the future holds for mega-brands like Kellogg's, but it's clear consumers are wising up to what healthy food actually is. Just because a food has fewer calories doesn’t mean it’s going to help you lose weight.
The company said it lost $293 million, or 82 cents per share. Excluding one-time items, it earned 86 cents per share, which was still short of the 92 cents per share analysts expected, according to Zacks Investment Research.
It will be interesting to see if other processed foods suffer the same fate as breakfast food. Are frozen pizzas, chips and cookies on their way out as well? We’ll see, but this is certainly a step in the right direction for those who'd rather choose a plant-based, whole foods diet that's free of mystery ingredients.
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Image: Mike Mozart