We all go to the super market, walk around the aisles looking for our favorite foods and see many brands on the shelves. When walk through the cereal and snacks aisle we see many different products but are produced or owned by the biggest corporations such as General Mills, Kellogg, Post, Quaker, etc. In this article that I have found written by David Kesmodel and Annie Gasparro, talks about one of these big corporations Kellogg’s and how they plan to change the recipe to get healthier sales from Kashi one of their acquired sub brands. One the first thing to understand when reading this article is to know which market it is. This article talks about Kellogg’s and their acquired brand Kashi. They are in the market of cereal and snacks in
…show more content…
To start off Kashi was founded by a married couple Philip and Gayle Tauber who were know to be ahead of the game by providing food to consumers who wanted whole grains and simple ingredients. In 2000 Kellogg’s bought Kashi since the year before Kashi doubled its annual sales to 33 million. The purchase of Kashi was great news for Kellogg’s two years later in 2002 since they were finally able to recapture the leading market share in U.S cereals. Over the first eight years after the company was bought out its sales grew about 42% annually on a compound basis to $600 million in 2008. This type of growth was possible because Kashi had a natural monopoly for the time being. This was because they were one of the first in the market to sell organic and natural cereals/snacks. They had built a structure that worked and had a strategy to keep its customers as well as gain more. Kashi also didn’t have any serious threats of new firms coming and attack their market share. Around 2007 and 2008 is where things started to go south. There was a shift because Kellogg’s decided to put its own sales force in charge, in place of Kashi’s existing sales force. This seemed like a bad idea to most because they thought that they prioritize on selling Kellogg brands. This led to a loss in office morale, which then led to sales still remaining on at …show more content…
At first they tried the big tent approach and that back fired, according to the IRI Kashi’s biggest category of cereal fell 21% while Natures Path rose 8%. After this failed they decided to reopen their California office and have an entrepreneurial approach. They also decided to bring back David Denholm who led Kashi when it was at its peak growth years. Denholm plan was to simply rebuild the same recipe that worked for them over a decade ago. Soon after they rolled out in to the European market and releasing exactly what “food forward” customers were seeking. Kashi plans on releasing products that are a big hit with the customers who are engaged in making better food choices. Switch tactics like this will take them time since there will always be flaws that need fixing. Even though in 2015 they had a decline in sales they believe that in 2016 sales will grow and let them remain in a case one situation with higher profit levels. Since the company is going back to the roots of its peak growth years they will definitely rise back up to the top, especially if utilize the healthy food trend happening now
To start off Kashi was founded by a married couple Philip and Gayle Tauber who were know to be ahead of the game by providing food to consumers who wanted whole grains and simple ingredients. In 2000 Kellogg’s bought Kashi since the year before Kashi doubled its annual sales to 33 million. The purchase of Kashi was great news for Kellogg’s two years later in 2002 since they were finally able to recapture the leading market share in U.S cereals. Over the first eight years after the company was bought out its sales grew about 42% annually on a compound basis to $600 million in 2008. This type of growth was possible because Kashi had a natural monopoly for the time being. This was because they were one of the first in the market to sell organic and natural cereals/snacks. They had built a structure that worked and had a strategy to keep its customers as well as gain more. Kashi also didn’t have any serious threats of new firms coming and attack their market share. Around 2007 and 2008 is where things started to go south. There was a shift because Kellogg’s decided to put its own sales force in charge, in place of Kashi’s existing sales force. This seemed like a bad idea to most because they thought that they prioritize on selling Kellogg brands. This led to a loss in office morale, which then led to sales still remaining on at …show more content…
At first they tried the big tent approach and that back fired, according to the IRI Kashi’s biggest category of cereal fell 21% while Natures Path rose 8%. After this failed they decided to reopen their California office and have an entrepreneurial approach. They also decided to bring back David Denholm who led Kashi when it was at its peak growth years. Denholm plan was to simply rebuild the same recipe that worked for them over a decade ago. Soon after they rolled out in to the European market and releasing exactly what “food forward” customers were seeking. Kashi plans on releasing products that are a big hit with the customers who are engaged in making better food choices. Switch tactics like this will take them time since there will always be flaws that need fixing. Even though in 2015 they had a decline in sales they believe that in 2016 sales will grow and let them remain in a case one situation with higher profit levels. Since the company is going back to the roots of its peak growth years they will definitely rise back up to the top, especially if utilize the healthy food trend happening now