business news in context, analysis with attitude

MNB reported last week on an Ad Age story saying that “unlike Kraft Foods, PepsiCo and other would-be defendants -- which shout out almost daily about proactive changes to their portfolios and ad practices -- Kellogg has seemingly ignored warning signs that the growing chatter over childhood obesity would lead down a path to litigation. Kellogg has stood by its existing products and strategies and made few changes to adapt to the newly nutrition-minded world.”

There appear to be a couple of things going on here, according to Ad Age. One is that Kellogg’s, having been founded on principles of health and wellness, simply doesn’t accept the idea that its products are not necessarily healthy for children. And, it may not “get” the public relations problems that a lawsuit filed by the Center for Science in the Public Interest (CSPI) could create long-term. And there’s another business dichotomy. Fortune reports that 30 years ago Kellogg’s “broke ground by pressing the Food and Drug Administration to allow marketers to use health claims,” but has found that the “minor nods Kellogg has made towards more-healthful children’s products -- reduced-sugar versions of Frosted Flakes and Froot Loops and a whole-grain toddler cereal -- have flopped at retail.”

We commented: CSPI may be a pain in the neck to a lot of marketers, but it is a reality that is not going away. And it does reflect an attitude toward food that is gaining greater currency in the public debate. Ignore it at your own risk.

MNB user David Diamond responded:

I think your discussion of Kellogg’s approach to child nutrition versus Kraft and PepsiCo misses a key point – the balance of the corporate portfolio. Kellogg’s product portfolio does include Keebler cookies, but it is dominated by products and categories which are highly defendable as actual food and reasonable nutritious to boot. Kraft and PepsiCo, on the other hand…

The point is that companies are attacked, not categories, and the Kellogg product portfolio, while flawed, is far more defendable than the Kraft or Pepsi portfolios from an overall health basis.

MNB user Joanne Sturm wrote:

I hope that Kellogg's sticks to their guns. Obese children should not be permitted to use the "Kellogg's Made Me Fat" defense....

MNB user James Curley wrote:

This whole cereal/obesity thing, and the potential of obesity lawsuits against food manufacturers is reaching the point of critical absurdity. Many baby boom folks will identify when I say that I was one of four brothers growing up in the Sixties, eating Jethro Bodine- (of the Beverly Hillbillies) –sized bowls of Kellogg’s sugary cereals swimming in full-fat whole milk EVERY day of our childhood and adolescence and of the four, only I had a weight problem (and still struggle with it...). The same was true all over my inner city working class neighborhood…some kids had weight control issues; most didn’t. Virtually all of them ate cereal.

Clearly, multiple factors are at work in childhood/adolescence obesity, including genetics, activity levels, total dietary habits, and availability of quality foods and information about food choices. My sixteen year old daughter has eaten cereal with whole milk virtually every day of her life since toddlerhood and has never had a weight issue. Most of her friends are the same. Targeting cereal makers or other food manufacturers with punitive lawsuits as causal agents in the obesity issue is NOT the answer to the problem.

Don’t misunderstand; I’m generally a fan of Michael Jacobson and the CSPI’s efforts at fact-finding and education regarding good nutrition, food safety and food-related health issues. But legal assaults on Kellogg’s or other makers of breakfast cereals as an antidote to child obesity will fail because it’s not the solution. Good parenting, food and health education and balanced levels of physical activity in kid’s lives are the solution, at least for most kids. Let’s keep the class-action plaintiff’s lawyers out of this issue…cereal is already expensive enough.

Continued reaction to the whole Albertsons/Larry Johnston mess. One MNB user wrote:

Another ex GE guy whacks a company into oblivion. I work for a company that got another one of the "I had to leave because I didn't get Jack Welch's job" guys. We used to have pride in meeting our customers’ needs.

Now, after we have whacked heads to get our stock price up, we have no inventory to ship on open stock merchandise, our sales people are on line 3 days per week doing what were previously support functions and basic data entry, and no one answers the phone anymore. And our ex GE guy, when asked to show profitability by other than cost cutting (ya' know, like actually growing sales) - well he's long gone.

And another MNB user wrote:

About the $40 million that Albertsons CEO is to get after the sale. Hang in there, Albertson Associates. We too had to pay our CEA (The A is for an unprintable) a bundle to leave, but life is better now. Sure I hate to see someone rewarded for running "my" life’s work into the "public" ground, but someday he'll have to answer for all the "great accomplishments" he's made.

On the subject of whether Wal-Mart should be allowed to open a bank, MNB user David Wiles wrote:

If Wal-Mart wishes to open a "Wal-bank" bank, why not.

Are they afraid of the competition? Would Wal-bank offer a better deal to the consumer? For years I have heard of different people put down Wal-Mart because they undercut the pricing. Yet Wal-Mart makes money. I would also like to point out that Wal-Mart pass on most of their aggressive buying to the consumers. Just look at the prices that the CONSUMERS pay. So who is wrong here. Wal-Mart, which is an aggressive buyer and drops the retails for the consumers or the complaining food retailers that could buy at the same quantities and pricing but keep the profits?

Let Wal-Mart build "Wal-banks" and allow consumers to save on their charges too. It should be a free (trade) world.

The banks are just trying to save the high priced program they have built for themselves.

The banks can run. But they can’t hide.

Finally, we got a number of emails responding to last week’s MNB Radio piece castigating a local wine salesman named Christian for ignoring what a customer wanted…and suggesting that this kind of attitude can be seen in a lot of venues.

One MNB user wrote:

Wow. I listened to MNB Radio and could easily relate right away. As a buyer at a major retailer, I am in the same position frequently. Many vendors and suppliers are just like the "knucklehead" retailer you mention. I, too, have been through this routine all too often and have to have the same conversation that you had with Christian.

What makes me jealous is the fact that you have a national audience to share your story with.

But another MNB user thought we abused the privilege:

I ordinarily enjoy your comments and insights on various aspects of the retail industry and although you make a valid point about listening to your customers, I feel you have abused your media position in venting your displeasure and anger even if it does illustrate a point.

You named names and location in your comments. This indicated to me that you were out for blood. Your point could have been made equally as well without trying to damage the reputation of the merchant.

Most of us, if we cared at all, would have contacted the owner of the establishment and expressed our displeasure personally. I frequently do this when I notice something wrong because many times the owner has no clue what is going on, although he should.

You may have a world-wide audience, however, your ranting surely will not effect the bottom line of a small wine merchant in your local community.

In short, I should think you would have bigger fish to fry.

Fair enough point.

We named names because this is, in the end, journalism. Advocacy journalism, to be sure, but still journalism.

But you’re right about one thing. We were annoyed. And we hope we didn’t abuse the privilege of having your and other people’s ears.

KC's View: