Let Them Eat Cereal

The CEO of Kellogg’s, which has raised prices post-pandemic more than any other cereal company, thought this was a good time to mention a concept food processors have been pushing for years: Eating breakfast cereal for dinner.

“The cereal category has always been quite affordable, and it tends to be a great destination when consumers are under pressure,” Gary Pilnick said in an interview with CNBC late last month. “If you think about the cost of cereal for a family versus what they might otherwise do, that’s going to be much more affordable.” Right. Forget that hamburger, have some Froot Loops. Marie Antoinette couldn’t have said it better.

A backlash swiftly ensued, including the call for a boycott of the company’s products, which beyond breakfast cereals include comestibles such as Pop-Tarts, Eggo waffles, Pringle’s chips and various snack foods.

Pilnick was probably surprised at the reaction, because it’s not as if eating cereal for dinner is uncommon behavior. A close relative works for one of the big food processors, and they track this sort of thing. They know people eat cereal for dinner, mainly for the convenience, but they’d like it to lose its stigma, so they’ve been looking for ways to mainstream it for years. Maybe Pilnick thought this was the time to strike.

Something else this relative told me clarifies why cereal prices have spiked. I once asked why, given that the price of grain rarely rose by more than a penny or two, cereal prices would jump by 50 cents a box. He explained that the price of cereal is based not on the cost of raw materials but rather on the cost of alternative breakfast foods. When the price of bacon goes up, manufacturers feel free to boost the price of cereal along with it. So when egg prices soared the past couple of years, Kellogg’s naturally jacked up its prices in tandem.

Maybe Kellogg’s can pivot to a new strategy. Considering the sugar content of some of those cereals, maybe they should pitch them as dessert.