Policy
The CEO of Kellogg's recently went on CNBC to discuss various ways his company is trying to ease the financial burden millions of American consumers feel at the grocery store. His suggestion that he was a shameless stopper to buy the product he represented left a very bad taste in the mouths of ordinary Americans.
Kellogg's CEO recommended that American families serve cereal for dinner to get some pennies, claiming that the message is not tone-deaf but is actually in line with what many Americans already do. In a short clip for CNBC, CEO Gary Belnick explained the divide in lived experience between the wealthy elite and the rest of America and the real financial pressure placed on the country by President Biden's inflation.
While many Americans are no strangers to eating cereal for dinner to save money, the idea of this being celebrated, if not actively advertised, as a way to deal with the current administration's poor economic policies is not just self-serving in the United States. The case of the Kellogg Company and its CEO but misses the bigger picture. Grab your favorite spoon and box of cereal as we dive into the latest PR debacle for major brands.
Let them eat cornflakes
Kellogg CEO Gary Pilnick sparked a major firestorm with his comments on CNBC. Discussing the brand's latest ad campaign to convince Americans to skip a healthy dinner containing meat, vegetables and the occasional starch for a bowl of cereal, he explained:
“We have to reach consumers where they are, so we advertise cereal for dinner.”
He went on to promote this:
“The cereal category has always been quite affordable, and it tends to be a great destination when consumers are under pressure.”
One can bet his wording could have been improved a little more, but it just got worse. Mr. Belnik continued:
“… Dinner cereal is probably the hottest thing right now, and we expect that to continue because that consumer is under pressure.”
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But the sugar on top of this insulting bowl of Rice Krispies came when Mr. Belnick claimed the price of a bowl of cereal with milk and fruit was “less than a dollar,” explaining:
“If you think about the cost of grain to a family versus what the family can do, the cost will be affordable.”
What a new idea. Let's look at what it costs Americans to feed their families these days and see if Mr. Belnick has his finger on the pulse of the American consumer.
Are you even shopping, bro?
Mr. Belnik's claim that a bowl of cereal with milk and some fresh fruit costs less than a dollar is laughable. I'm a skilled grocery shopper who has to feed a family of four.
I don't know which grocery store Mr. Belnik shops at because the cost of fruit alone is prohibitive, not to mention the milk and box of cereal he buys. To give you an idea, today, when I went grocery shopping at a local chain store, it cost the following versus what I put it as dinner replacement:
- $3.79 – 2% milk carton
- $5.49 – 18 oz box of Kellogg's Frosted Mini Wheat Cereal
- $1.99 – 1 pound of apples
Considering that the above would only last my family for a week on breakfast alone, it's easy to say that Mr. Belnick's claim that a bowl of cereal with milk and fruit would cost less than a dollar is vague calculations. I will need to buy twice as much as I did today as well as deal with my kids complaining about eating the same thing for breakfast and dinner every day.
In addition, the cost of cereals and bakery products has risen more than 27% since the outbreak of the pandemic, and according to the Consumer Price Index, the average price of cereals in the United States rose 6% in 2021 and a staggering 13% in 2022. Overall, spending Americans spend more on food than they have in the past three decades.
In 2022, Americans spent more than 11% of their disposable income on food. By the end of last year, Americans paid 20% more for groceries than in 2021. According to Moody's Analytics chief economist Mark Zandi, American households had to pay $213 more per month for the same goods and services this year than last.
The answer to “financial pressures,” as Mr. Belnick referred to them, is not to increase the price of fruit loops and reduce grilled chicken with broccoli and potatoes. The answer is an administration that does not shift blame for inflation onto symptoms of its own bad policies, but actually does something to make chicken, broccoli, and potatoes, as well as all the other staples that Americans buy, more affordable.
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If Mr. Belnick wanted to spend his $1 million-a-year base salary on cereal for dinner, he certainly could; This family chooses to use the coupon and start growing their own produce. This will be cheaper in the long run than eating a bowl of his company's cereal twice a day.
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