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Australia Edition 3

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  • Australia
  • Australian
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THE MARKET In

THE MARKET In Australia, and around the world, Kellogg is a leading producer of ready-to-eat breakfast cereals and convenience foods. The Australian breakfast cereal market, including ready-to-eat breakfast cereals, hot and portable breakfasts, is valued at 1.7 million (AZTEC May 2001). At 51 .4 per cent value share, Kellogg is the undisputed category leader (MAT May 2001). The breakfast cereal market is extremely dynamic and has a high household penetration of around 90 per cent. In recent years, category growth has been driven by the p01iable breakfast segment with an increase of 17.5 per cent in volume over the last 12 months. Kellogg continues to lead the trend towards better health and nutrition and is continually researching and developing new products to meet the changing health and lifestyle needs of Australian consumers. ACHIEVEMENTS For more than 75 years, Kellogg has Jed the Australian ready-to-eat cereal market. Today, Kellogg's market share includes 7 out of the top I 0 breakfast cereals in the country including Kellogg's Corn Flakes, Kellogg's Nutri-Grain, Kellogg's Coco Pops, Kellogg's Sultana Bran, Kellogg's Just Right, Kellogg's Special K and Kellogg's Rice Bubbles. Kellogg is proud of the fact that it is able to directly employ over 800 Australians and that over 90 per cent of its cereal products are made in Australia using Australian raw materials as a priority. In fact, Kellogg sources 87 per cent of its food ingredients and other supplies locally - thereby supporting thousands of Australians outside its direct workforce who grow Kellogg would not be able to operate without the support of the community and that is why the company is dedicated to giving something back. Each year Kellogg invests millions of dollars supp01iing a number of important c01mnunity services including Surf Life Saving Australia, Plan It Youth and the National Hemi Foundation. Kellogg is a keen supporter of Australian sport with funds being used to assist National Rugby League, junior rugby league, the junior surf lifesaving movement and the Australian Institute of Sport. Kellogg is c01mnitted to making wholesome nutritious foods for all Australians at an affordable price and is proud of the contribution it has made to healthy eating and community service in this country. HISTORY From the very beginning, Kellogg cereals were fow1ded on good health principles. In 1880, Will Keith (WK.) the grains, supply the packaging and deliver and Kellogg went to work for his brother, Dr. John sell its products. Harvey Kellogg, superintendent of the Kellogg Australia exports to New Zealand, internationally famous Seventh Day Adventist South East Asia and the South Pacific, resulting in Battle Creek Sanitarium in Michigan USA. Whilst 0 million in export revenue over the last eight developing a nutritious cereal food for his patients years. in 1894, a laboratory oversight resulted in the Kellogg Australia purchases more calrose rice creation of wheat flakes. The patients loved this than any other food manufacturer in Australia and new flaky cereal product, and demanded supplies, uses more than 12,000 tonnes of whole com (maize) even after leaving the Sanitarium. each year· making the company one of the largest Soon after, the Kellogg brothers opened their first users of Australian corn for food production. wheat flakes fact01y in Battle Creek. From wheat flakes Special corn hybrids developed by grain growers to com flakes was a simple process, and in 1906, WK in association with Kellogg and their suppliers Kellogg started up his own company to.market them. ensure high product quality. ,--------------- ------------, Kellogg is also a major buyer of many other Australian-grown foods including rye, wheat, dried apples, papaya and peanuts. Kellogg is c01mnitted to the environment and has a long record of environmentally responsible practices. More than two billion Kellogg packages a year display the 'recycled' symbol. Kellogg packaging, of course, is also recyclable. At the end of the day, 48

The company was called The Battle Creek the taste kids desire. Toasted Corn Flakes Company, but this soon In response to consumer demands for healthy changed to the simpler Kellogg Company. By products with sophisticated taste appeal, Kellogg 1909, more than a million cases of Kellogg's Corn created Special K Red Fruits. Flakes were sold across the US. In 1924, Kellogg Launched in 2000, Kellogg's Australia was founded and began operations from Special K Red Fruits features rented premises in Sydney. In 1928, Kellogg freeze dried pieces of Australia moved to their newly built factory located strawberries, raspberries and at Botany. Over the years, the Botany factory has cherries and has already been expanded several times to keep pace with an developed a loyal following ever-increasing demand. Today, the - ..,....=--"""" Kellogg company manufactures its products in 19 countries around the world and distributes its products to more than 160 markets. THE PRODUCT Nutritionists around the world agree that breakfast is the most important meal of the day. Research shows that people who eat breakfast tend to be more relaxed and have improved memory. Children who go to school without breakfast have more trouble concentrating. Regular breakfast eaters also have better diets and generally better health. Nutritionists recommend that a good breakfast should supply about one qumier to a third of a person's daily nutritional needs. A bowl of breakfast cereal with milk helps do just that, by providing a range of nutrients such as carbohydrates, fibre, and essential vitamins and minerals. A significant nwnber of Kellogg's breakfast cereals such as Kellogg's Sultana Bran, Kellogg's Just Right and Kellogg's Nutti-Grain m-e 97 per cent fat-free and contain Niacin, Vitamin B6, Riboflavin (B2), Thiamin (B 1 ), Folate, Zinc and Iron. RECENT DEVELOPMENTS Kellogg's commitment to buying high quality ingredients combined with the company's commihnent to nutrition research and development has led to the inu·oduction of new breakfast cereals. Innovation has always been the key to Kellogg's success. In 2000, Kellogg launched Kellogg's Goldies, a range ofthree wheat biscuit cereals with added ingredients like honey and sultanas to provide the nutritional goodness mums seek with want a delicious, yet nutritious breakfast cereal. The other major driver of the breakfast cereal market is convenience. Kellogg has responded to this cwTent market trend with the development of its K-Time range of cereal bars and baked foods. K-Time has become one of Kellogg's best performing brands. It accounts for 9.3 per cent ($MAT) of the nutritious snacks market. K-Time has shown tremendous growth over the past year growing significantly ahead of the market at 47.3 per cent versus market growth of I 0 per cent. The majority of this rapid growth has been due to the introduction of im1ovative new products like K­ Time Twists, which are filled with either fruit, or fruit and yoghurt. K-Time Twists now account for over half ofK-Time sales. Kellogg's Pop Tart has also grown 85.5 per cent in the last twelve months with the launch of the new Pop Tart Pashies and Pull-A-Parts range. Kellogg's major cereal brands maintained a good shm·e of market during 2000 through a combination of effective advertising, on-pack consumer promotions plus in1portant on-pack messages about good nutrition and c01mnunity involvement. In recent years, Kellogg's Nuu·i-Grain, which is the major sponsor of the Kellogg's Nutri-Grain National Surf League, has grown to become Kellogg's best selling cereal brand owning 11.1 per cent of the ready-to-eat category ($MAT). Australians eat approximately 17 million packs of Kellogg's Nutri-Grain a year and the brand continues to grow at a rate ..,..........:""-.......,"'"'--~~--"'-----=--'--""'""""" of 5.2 per cent in volume. This makes Kellogg's Nutri-Grain one of the fastest growing brands in the category. PROMOTION A man ahead ofhis time, WK. Kellogg realised that promotion was vital to growing his brand. In 1906, he invested in an ad in The Ladies Home Joumal with astounding results. Sales grew from just 33 cases a day to 2,900. Spurred on by this success, WK Kellogg embarked on a series of sales promotions. Kellogg was also one of the first companies to use free gifts or premiums in or on-pack. In the early '60s, Kellogg's first Australian TV advertisement appeared, promoting Kellogg's Corn Flakes. Today, television is just one part of the marketing mix with on-pack promotions, sponsorships like the Kellogg's Nutri­ Grain National Surf League, public relations and the internet forming important parts of the company's marketing activity. BRAND VALUES In the far-sighted words of the Kellogg founder, WK Kellogg, "We are a compm1y of dedicated people making quality products for a healthier world." One of those products, Kellogg's Corn Flakes, has enjoyed a long history of popularity based on its taste and high nutritional value. Driven by the belief that cereals can provide an integral part of our diet, Kellogg's Corn Flakes continue to win over the hearts and minds of today's increasingly health-conscious consw11ers. A key reason is Kellogg's corporate culture. A culture that is a direct reflection ofKellogg's five corporate values: profit and growth, people, consumer satisfaction and quality, integrity m1d ethics and social responsibility. It is through these values that the original vision of WK. Kellogg continues to thrive, with an ongoing commihnent to the future health of the nation. THINGS YOU DIDN'T KNOW ABOUT KELLOGG'S 0 Kellogg was the first to print recipes, product information and nutrition messages on the side and back panels of its cereal packs. 0 The Australian operation was the first Kellogg facility to be established outside America. 0 Kellogg's Nuui-Grain is a uniquely Australian breakfast cereal developed in Australia by Australians for active Ausu·alians. 0 The first box of ready-to-eat cereal to roll off the Kellogg production line in 1906 was packaged in recycled paperboard. 49

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