General Mills, Inc. (GIS), Kellogg Company (K): Sara Eisen Talks About Current Cereal Killers


Today’s cerial killers which are affecting companies like General Mills, Inc. (NYSE:GIS) and Kellogg Company (NYSE:K) were discussed in a recent segment on CNBC by Sara Eisen.

According to Eisen, the current demand for healthy breakfast meals which have protein is resulting in a serious consumer shift which is hurting General Mills, Inc. (NYSE:GIS) and Kellogg Company (NYSE:K). The CNBC correspondent noted that this shift has been negatively affecting General Mills for at least the last year. In the last quarter, sales have been disappointing at the company, she added, with cereal sales slumping for at least a year.

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Because General Mills, Inc. (NYSE:GIS) gets about 20% of its sales from cereals, this consumer shift has seriously affected the company, Eisen said. As a result, the company’s CEO has said that they will spend more in advertising to promote their products as healthy. Furthermore, the company is also stepping up its manufacture of natural product, Eisen reported. General Mills, Inc. (NYSE:GIS) is reportedly adding more cinnamon taste to its toast crunch, making its Trix cereal fruitier and focusing more on protein granola.

As for Kellogg Company (NYSE:K), Eisen noted that the company is getting hit much harder because cereal sales, revenues and volumes have been slumping. According to the Squawk on the Street Co-Anchor, part of the reason why cereal sales has been in a downturn is because of yoghurt sales. She added that almost half of Americans (49%) now eat yoghurt for breakfast. This is compared to 36% of Americans in 2003 and 43% of Americans in 2008 who ate yoghurt for breakfast. Another factor that is hurting Kellogg Company (NYSE:K) is the fact that more people are eating out in the mornings, Eisen added. She noted that recent data from guest|METRICS show that breakfast is the only segment in restaurants that is growing in terms of traffic this year.

The full report can be seen below.


General Mills, Inc. (NYSE:GIS) investors includes Ric Dillon’s Diamond Hill Capital which reported about 3.77 million shares in the cereal maker by the end of March. Another investor is Mario Gabelli’s Gamco Investors which had about 2.76 million shares in the company during the same period.

As for Kellogg Company (NYSE:K), hedge funds which had holdings in the company by the end of the first quarter of the year includes Mario Gabelli’s Gamco Investors which reported 889,930 shares. Another firm which had a stake in the company is David Harding’s Winton Capital Management with 787,214 shares also by the end of the first quarter.


Disclosure: None