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ESG Case Study: How corporate purpose strengthens Kellogg’s ESG communications with stakeholders
Natalie Runyon Director / ESG content & Advisory Services / Thomson Reuters Institute
9 Jan 2023 · 5 minute read
The Kellogg Company aims to advance sustainable and equitable access to food through a new initiative that leverages its communications around its ESG activities
The attention of boards of directors are increasingly more “attuned to the importance of talent, culture, and connecting business strategy to purpose,” according to a recent Deloitte report . That means that board members continue to focus on environmental, social, and governance (ESG) issues, as well as concerns around talent retention and development, employee well-being, hybrid work environments, and the future of work.
While talent issues remain high on the board agenda for many companies, organizations need to do more to explicitly tie the well-being of their people and corporate purpose directly to corporate ESG activities on a consistent basis. Indeed, measuring social impact — the S in ESG — through the lens of people’s well-being is not yet mainstream, although it is gaining traction.
Multinational food manufacturing giant the Kellogg Company (Kellogg’s) is among those companies that consistently link their global purpose platform to their sustainability agenda and ensures their purpose is centered on the well-being of their employees and other stakeholders. More specifically, the company, through its Kellogg’s™ Better Days Promise , aims to advance sustainable and equitable access to food by addressing the intersection of well-being, hunger, sustainability, and equity, diversity & inclusion to create better days for 3 billion people by the end of 2030.
Enacting a multi-pronged stakeholder engagement strategy
Kellogg’s also embeds its corporate purpose into its growth strategy. This definitive integration of purpose and growth dates back a century to its founder and is well entrenched within the organization’s business and culture today, says Stephanie Slingerland , Senior Director of Philanthropy and Social Impact at the Kellogg Company.
The Better Days Promise is a key element of Kellogg’s Deploy for Balanced Growth strategy, which includes consideration of the varying sustainability-related preferences, needs, and desires of the company’s multiple stakeholder groups — employees, customers, consumers, investors, and the communities in which the company is based and operates.
With the recognition that the “company should and can do well by doing good,” Kellogg’s has taken a proactive approach to engaging with stakeholders to communicate how its corporate ESG strategy remains central to its operations and growth strategy through a people well-being lens, Slingerland explains.
Kellogg’s has seen positive implications by intentionally collaborating with stakeholders to integrate the organization’s corporate purpose and social impact into its ESG strategy in a variety of ways, including:
- Cross-stakeholder ESG initiatives — Honoring World Food Day is a month-long event at Kellogg’s. It is an opportunity for the company to engage with many of its stakeholders, including food banks, retail partners, and employees, through workplace and community volunteering opportunities, donation drives, communications, and events.
- Employees — Kellogg’s employees regularly engage with ESG initiatives over the course of the year. Indeed, cultivating employees as ambassadors through the promotion of the Better Days Promise to employees’ networks, customers, and partners enables a multiplier effect on the company’s ESG communications and social impact.
- Consumers & community — Kellogg’s has a long history of involving consumers in its philanthropic activities. In the summer of 2022, for example, the company’s launch of the Build for Better program and competition, executed in partnership with Minecraft and the nonprofit KABOOM!, allowed consumers to design a virtual playground on Minecraft and submit it for the chance to see it built in real life. The winning design was built at a Boys and Girl Club of America in Marietta, Georgia in November 2022.
- Customers — Likewise, the company’s retail customers recognize the importance of ESG initiatives and are eager to partner on Better Days Promise. For example, Kellogg’s collaborated with a retailer to launch Kellogg’s InGrained ™, a program that helps rice farmers reduce climate impact. Another retail partner, recognized Kellogg’s commitment, investment, and partnership on philanthropic, sustainability, and well-being initiatives, named the company the first-ever ESG Supplier of the Year.
Storytelling & data are essential
Data and storytelling are key to executing holistic, multi-pronged communications to a wide variety of stakeholders. While it is sometimes tricky to address all audiences’ preferences and expectations, “sharing stories about the people behind our strategy who have such a passion for their work, or the people that the initiative impacts, resonates the most,” Slingerland says. “Data helps to contextualize the impact of the stories.”
One of the most common challenges in implementing an ESG engagement strategy is how to influence late-comers or those who question the validity of the widespread attention that ESG is receiving. To make progress, companies should stay focused and highlight the positive impact company initiatives can have on the surrounding communities, and how these initiatives help drive company’s growth, Slingerland advises.
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By using AWS, we have happier customers and we work faster, cheaper, and better."
Stover McIlwain Senior Director of IT Infrastructure Engineering, The Kellogg Company
Margins are tight in the ready-to-eat cereal industry. For a company like Kellogg, approximately a third of its annual revenue is spent on promotional costs or trade spend: every dollar spent on coupons and special offers, promotions for special pricing, sponsorships, even the location each brand occupies on the grocery-store shelf. “Any improvements we make to trade spend go straight to our bottom line,” says Stover McIlwain, Senior Director of IT Infrastructure Engineering at Kellogg. “If we improve trade spend by just 1 percent, that’s $50 million dollars.”
The company keeps a close eye on its trade spend, analyzing large volumes of data and running complex simulations to predict which promotional activities will be the most effective. Kellogg had been using a traditional relational database on premises for data analysis and modeling, but by 2013, that solution was no longer keeping up with the pace of demand. Each day, Kellogg needed to run dozens of complex data simulations on things like TV ad spend, digital marketing, coupon campaigns and other promotions, sales commissions, display and shelving costs—but its system only had the capacity to run just one simulation a day. “Margins are very tight in our industry, and even slight changes in trade spend can swing market share,” McIlwain says. “Revenue growth is flat in some of our categories, so we need to be very agile to stay competitive. We needed to eliminate waste and invest more in the trade spend that drives faster time to market and greater revenue.” It was clear that Kellogg needed to move away from its traditional on-premises infrastructure.
Why Amazon Web Services
Kellogg needed a solution that could accommodate terabytes of data, scale according to infrastructure needs, and stay within its budget. The company became interested in an SAP solution called Accelerated Trade Promotion Planning, which is powered by SAP HANA, SAP’s in-memory database technology platform. Amazon Web Services (AWS) offered a fully SAP-certified HANA environment on a public cloud platform. Because SAP works on the AWS Cloud, the company knew it could achieve the speed, performance, and agility it required without making a significant investment in physical hardware. Kellogg decided to start immediately with test and development environments for its US operations.
The company is now running the SAP Accelerated Trade Promotion Management (TPM) solution, powered by SAP HANA and leveraging multiple AWS instance types for both the SAP application and HANA database layers. These Amazon Elastic Compute Cloud (Amazon EC2) instances process 16 TB of sales data weekly from promotions in the US, modeling dozens of data simulations a day.
The company also uses Amazon Virtual Private Cloud (Amazon VPC), which is connected directly to the Kellogg data centers to allow access to SAP TPM directly for employees who are on the company network. Amazon Simple Storage Service (Amazon S3) is used for data backups, including HANA, and Amazon Elastic Block Store (Amazon EBS) provisioned IOPS (P-IOPS) volumes for storage. The company logs events using AWS Identity and Access Management (AWS IAM).
Kellogg uses Amazon CloudWatch for monitoring, which helps the company allocate costs to each department based on their individual infrastructure use. “CloudWatch helps our people make better decisions around the capacity they need, so that they can avoid waste,” McIlwain says. “We were never able to do that with our on-premises infrastructure. AWS breaks down usage and cost to such a granular level that we can identify which costs come from which department, like a toll model.” Costs and benefits of this IT service can now be aligned so that Kellogg can assess the true return on investment.
For high availability, Kellogg leverages multiple AWS Availability Zones (AZs) without the additional cost of maintaining a separate datacenter.
Kellogg estimates that it will save close to a million dollars in software, hardware, and maintenance over the next 5 years, just by using AWS in its test and development environments. “Using AWS saves us more than $900,000 and lets us run dozens of data simulations a day so we can reduce trade spend. It’s a win-win, and a pretty compelling business case for moving to the cloud,” McIlwain says.
By using AWS, the company is also able to be more agile. Instead of having to wait 30 days to make changes to its trade spend analysis system, the company can spin up instances immediately to perform the necessary data simulations (or calculations). “The speed and agility that using AWS gives us lets us develop and deliver business services much more quickly than before, so that we can keep one step ahead of the market. Our staff can deploy instances 90 percent faster than with our previous on-premises solution,” McIlwain says. “The AWS Cloud drives a lot of business benefits for Kellogg.”
Kellogg engineers liked the accessibility and familiarity of the AWS platform, which enabled them to easily apply their existing knowledge and infrastructure skills to the AWS Cloud. In addition, by using AWS, the IT team’s internal customers can now self-fund IT projects—saving the IT team from having to budget for projects from other departments and driving more efficient use of resources. “AWS allows me to do the unprecedented: bill Sales directly for the infrastructure they’re using, instead of the hosting costs being lost in the overall Infrastructure annual budget,” McIlwain says. Kellogg is pleased that AWS supports the option to leverage existing HANA licenses that the company previously purchased from SAP; it allows the team to quickly provision instances and avoid having to repeatedly install and configure the software.
The company uses AWS Support , Business Level, and training, as well; one engineer already has successfully achieved the AWS Certified Architect certification . “The engineering support included training and documentation,” McIlwain says. “It exceeded expectations and became a key differentiator and added benefit in working with AWS.”
Kellogg is using AWS for its US operations, and plans to expand worldwide in 2014 — which should increase the amount of data being processed from 16 TB to 50 TB. “By using AWS, we have happier customers and we work faster, cheaper, and better,” McIlwain says.
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In 1898, W. K. Kellogg and his brother Dr John Harvey Kellogg were trying to make granola. The attempt failed but resulted in them accidentally flaking wheat berry.
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Kellogg, Kraft Win Antitrust Suit Against Egg Companies (Correct)
By Katie Arcieri and Stephen Joyce
General Mills Inc. , a Kraft Heinz Co. unit, Kellogg Co. , and Nestle SA for years likely overpaid for eggs because the nation’s largest producers and two trade groups conspired to restrict the supply, an Illinois federal jury decided on Tuesday.
A US District Court for the Northern District of Illinois jury of nine men and three women said the two largest US egg producers, Cal-Maine Foods Inc. and Rose Acre Farms Inc., along with two egg-industry trade groups, will have to pay damages to the food companies.
The same jury will decide the amount of damages in a trial scheduled to begin Nov. 29 that is expected to last two days. By law, whatever damages the jury awards will be trebled, though the jury will not be told about that statutory requirement.
The case outcome in favor of the food companies could embolden other plaintiffs who are seeking to go after food producers for anticompetitive behavior.
“We are incredibly pleased by the jury’s decision,” said Brandon Fox, a Jenner & Block LLP partner representing the food companies. “For the first time, the defendants have been held liable for their antitrust violations. We are now going to turn our attention to the damages phase.”
King & Spalding LLP partners Patrick Collins and Patrick Otlewski, who helped lead the defense effort for Cal-Maine Foods, appeared stunned by the verdict. Sitting at the defense table, the two lawyers’ heads dropped toward their chests and stayed there. Otlewski didn’t speak after the verdict was read by US Judge Steven Seeger.
When asked by the judge if he had anything to say, Collins only uttered he had to confer with his client before rushing out of courtroom at the verdict hearing’s end. The lawyers didn’t immediately respond to a request for comment.
In 2011, the food producers sued the egg producers and trade groups United Egg Producers Inc. and US Egg Marketers Inc., alleging they engaged in a conspiracy to reduce supply in an attempt to increase the price of eggs. The jury found the food companies were injured by the conspiracy from October 2004 to December 2008.
Egg buyer plaintiffs—grocery stores and another group of direct purchasers—in two other cases were previously unable to convince a jury that the producers fixed the price of eggs. But on Tuesday, the jury delivered a fulsome verdict in favor of the plaintiffs.
It agreed with the food companies that the conspiracy existed and that it was effectuated through distinct actions such as reducing the nation’s hen population and boosting egg exports to limit the US egg supply. The jury also concluded those practices unreasonably restrained trade in the egg market in violation of federal antitrust laws.
The jury didn’t conclude, however, that every egg producer aligned with the industry trade groups participated in the conspiracy. The jury also found the companies weren’t injured between 2009 to 2012, as they alleged.
Before he read the verdict, Seeger commended lawyers from both sides for what he said was some of the finest advocacy he’s seen in his time on the bench. The day arguments ended he passed out trays of egg-containing brownies to them.
“I told you at the outset of the case that I wanted to see Major League Baseball, and you all delivered an All-Star game,” he told the lawyers.
The food company plaintiffs are represented by Jenner & Block LLP. Rose Acre Farms is represented by Porter Wright Morris and Arthur LLP. Cal-Maine Foods is represented by King and Spalding LLP and Brown Fox PLLC. United Egg Producers Inc. and US Egg Marketers Inc. are represented by Troutman Pepper Hamilton Sanders LLP.
The case is Kraft Foods Global, Inc. v. United Egg Producers, Inc., N.D. Ill., No. 1:11-cv-08808, 11/21/23.
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Four key challenges facing Kellogg Company in a VUCA world
In the first of two blogs, Charlotte Durrant, Sedex Marketing Communications Manager, reflects on key learnings from the keynote speech by Alistair Hirst, SVP Global Supply Chains at Kellogg Company, at the Sedex Conference 2016.
Alistair Hirst, SVP Global Supply Chains at Kellogg Company, has been working in supply chain for Kellogg Company for 32 years, across four different continents. Given his long history and experience across the globe, we invited Hirst to be our keynote speaker at the Sedex Conference and share his vision for simplifying supply chain sustainability.
Hirst opened by setting the scene: “ The world has never been as complex and volatile as it is today ” he said. “ There are so many agendas out there, to have programmes and policies against, it seems sometimes insurmountable. But that’s the world we live in today .”
He described how Kellogg Company has been working closely with the Institute of the Future, based in California, to help develop their strategy in what the Institute sees as a VUCA world – volatile, uncertain, complex and ambiguous. According to the Institute, to manage in this VUCA world you need to have vision of where you’re going, understanding of how you’re going to get there, clarity of purpose and agility to help with long- or short-term supply shocks.
Hirst picked four key challenges which impact stability, risk and sustainability in global supply chains, to demonstrate the dynamics that managing in a VUCA world brings to Kellogg Company:
1. Political instability: From the crises of wars in Iraq and Syria and the migrant challenge in Europe affecting the socio-economic balance, to foreign exchange and volatility around Brexit in the UK. These kind of challenges have huge impacts on Kellogg Company’s sourcing and play into the sustainability field at a very high level.
2. Climate change: Climate records are being broken all the time – it’s too hot, too wet, too dry. Hirst asked, “ How do you start creating resilience in your supply chain to account for some of these things that are occurring ?” before going on to talk about how climate change is changing where the growing regions are in the world. “ We need to predict how the growing regions will be changing, because the people who are going to be affected most by climate change are the ones who are already struggling to find food security. I’m interested in what climate change will do to our business, because being a food company, everything we make starts with what the farmers are growing for us out in the fields ,” he said.
3. Food security: The most vulnerable populations out there are the ones who will be most affected by this challenge. Hirst described how “ these are our current consumers and hopefully in the developing markets, this is where our future business will be. So we have a vested interest in making sure the communities in which we operate have access to food and nourishment on a regular basis. And business can do that – we can step in and we find commercial ways to take people from subsistence farming into the commercial cash crops .”
4. Urbanisation: Hirst detailed how “ the estimates at the moment are that the world’s population will be nine billion by 2050 and 70 percent of that population are going to be in urban areas. So not only are there going to be more mouths to feed, but there will be no more land or water appearing – we’re going to have to do more with less .” For Kellogg Company, “ that means we have to have a strong sustainability agenda, particularly around productivity and finding ways to improve food security for the people who are actually left on the land, so they want to be farmers and want to produce food for those who are moving to the cities .”
These four challenges set the context within which Kellogg Company is trying to simplify its supply chain sustainability.
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Case Study: Kellogg’s Business Strategy
Kellogg’s is the world’s largest cereal maker since 1906 and is located in the United States. Kellogg’s products has become a part of the delicious mornings for the people around the world since a century. Its business is operated in two segments: Kellogg’s North America and Kellogg’s International. 66% of the revenue to the company comes from North America region which consists of the Canada and the United States. The remaining 34% comes from the Kellogg’s international market which consists of Europe (20%), Latin America (8%) and Asia Pacific (6%). The products vary from ready-to-eat cereals to convenience foods such as cereal bars, cookies, toaster pastries, crackers, frozen waffles, snacks and veggie foods. Obesity and Health & Wellness is the primary concern for people in the world today. Kellogg’s has invested on this trend by introducing many health focused products like Kellogg’s ®, Pop-Tarts ®, Cheez-It ®, Mini-Wheats ®, Nutri-Grain ®, Rice Krispies ®, Keebler ®, Special K ®, Chips Deluxe ®, Famous Amos ®, Morningstar Farm ®, Sandies ®, Eggo ®, Austin ®, Club ®, Murray ®, Kashi ®, Bear Naked ®, Gardenburger ®,All-Bran ®,and Stretch Island ®. The demand for its products came from the continuous advertising since 1906. The main competitors are General foods, Quaker Oats, General Mills and Ralston-Purina. It started out in Battle Creek, Michigan with 44 employees which eventually has grown into a multinational company with 30,000 employees. The manufacturing of its products is taking place in 18 countries and selling them over 180 countries successfully with the implementation of intelligent strategies and leadership .
Key Success Factors of Kellogg’s
The main key factors for Kellogg’s Success are it perceived to have a healthy image when compared to other daily breakfasts and snacks like chocolates and crisps. They made the products convenient enough so that they can be carried anywhere easily. They offer a range of cereal bars which are quite useful for people on the morning rush. Few Kellogg’s products are really versatile as mom’s can give them as a snack between breakfast and lunch to their kids. Sodium content in the food is a major issue that the company has to deal with. Kellogg’s are trying to develop products with less salt content and including more amount of fruits in the bars and cereals for people with health concerns. They have created a high level of brand awareness in the people which allowed them to win the customer loyalty. They have designed various products since a century for all age groups from children’s to adults. Innovation has influenced Kellogg’s market to a greater extent. Introducing new products according to the changing markets and tastes of people from time to time has made Kellogg’s to win the customers. They offered the products at a lower price which made an average household to afford, hence retaining the customers at large. Kellogg’s market its products itself. It do not manufacture cereals for any other company who sells them under their own brand. All these factors added for the company to run successfully and become the world market leaders in the highly competitive market.
Kellogg’s Business Strategy
Kellogg’s aim was to be the food company of choice and also make customers understand the importance of a balanced lifestyle which can be achieved by their products. The mission is “to drive sustainable growth through the power of the people and brands by better serving the needs of customers, consumers and communities.” Based on their vision and mission they crafted their strategy to achieve aims and objectives with the power of position and brand image. Kellogg’s targeted various groups of people and deigned the products accordingly to attract their mind sets. ‘Balanced Lifestyle’ is the broad strategic objective of the company. It implemented these strategies by some tactical plans like supporting the physical activity among all age groups and to sponsor these activities with the use of companies resources, the communication of the balance diet to consumers using the cereal packs, and also introduction of food labelling which would allow consumers to understand the balanced diet content of their products. Kellogg’s has introduced the recommended Guideline Daily Amounts (GDA) to their packaging labels. This allowed the customer to have a knowledge of the amount of nutrients in take in a serving of Kellogg’s food. Their strategy is to attract customers by encouraging them to take part in the swimming programs organised by the company in relationship with the Amateur Swimming association (ASA). Kellogg’s has sponsored almost 1.8 million awards every year to the swimmers. This idea of teaming up with ASA has helped the company to reinforce its brand image. It also has started many community programs and breakfast clubs to create awareness of their products in people. By all these activities it shows that the company is trying to create a good CSR image in the industry. Kellogg’s believed that if consumers are given proper information about their products, they can retain them. So, they chose various methods to communicate their objectives to the world such as using cartoon characters, and also through effective advertising. It also distributed nutrition magazines for the employees to make them better understand about the objectives.
It is seen that Kellogg’s consumers buying behavior is mostly dependent on the company’s focus towards customers and how well they treat them rather than manufacturing, pricing or merchandising of the products. Consumers tend to purchase the products which are more healthy. Hence they want to know all the available information about the products they want to buy or consume. The product’s information, beliefs, intentions and attitudes of the customers influence the decision process . So Kellogg’s has to perform a market research on whether the consumers buy their products based on the label information or not. The visual inspection of the product or the experience of purchasing the product play a major role in the decision making of the consumer. Advertising and promotion of the product might as well have a greater impact on the buying pattern. It is difficult enough to understand the consumer behavior within the borders of a single country. Understanding and serving the needs of consumers from different countries can be daunting. The values, behaviors and attitudes of the consumers vary greatly across the world. Kellogg’s must design the marketing programs and products according to the peoples needs. For example, in the United Kingdom where most people eat cereal regularly for their breakfast, Kellogg’s should try persuading consumers to buy their brand rather than a competitors brand. In France, however where most people prefer croissants and coffee or no breakfast at all, it should advertise to convince people to eat cereal for breakfast and in India, where many consumers eat heavy fried breakfasts and skip meal all together, the company should make attempts to convince the buyers to shift to a lighter, more nutritious breakfast diet.
Customer Focus and Retention Strategy
There is a huge discussion in the EU market about the food nutrition and labeling and the negative media image produced about the products of the company. The Kellogg’s products are criticized by food standard agency (FSA) as red products and junk food. They said that the company is trying to show their products healthier than they actually are. These statements and actions of FSA has not only affected the overall business and its image but also the consumer attitude towards the products.
To cover up the damage caused due to the labeling issue by FSA, Kellogg’s Should determine the customer’s needs and convert them into requirements. In order to fulfill them, it should fully understand the current and future needs of the customers, identify the customers, determine their key product characteristics, identify and assess market competition, identify opportunities and weakness , define financial and future competitive advantages , ensure that it has sufficient knowledge about the regulatory requirements, identify the benefits to be achieved from exceeding compliance and also identify their role in the protection of community interests. Kellogg’s can start launching some new products aimed at the health conscious consumers. They can start selling them for a lowest price in the market and satisfy them with a good value products for every penny they spend. They can concentrate more on three groups of people like individuals, families and supermarkets who wanted to have a healthy diet. They can focus more on health conscious people from age group from 25-50 by promising them healthy diet with their products. By the introduction of these products in the market they can show the customers that Kellogg’s is being paid attention to what they want and how important their health is to the company. They can start collecting information from consumers and people by conducting surveys about what kind of products they are actually looking for and based on that they can prepare them and position them to win the competitive advantage. So the only mantra to attract the customers again and to cover up the loss created by FSA is obsessive customer attention. Even though making health conscious customers happy might affect the short term profits, yet it helps to acquire a loyal customer base which pays off in the future. Making these products available at all consumer stores and super markets at a lower retail price might assist in building up the brand image yet again. Advertisements play a crucial role in winning the brand image and loyalty of the customers. If the company tries to create an awareness about the product and the low price buying strategy, it would encourage the consumers to buy them that results in the greater sales of the product.
Awareness of changing dynamics of the consumer market will definitely help Kellogg’s to gain a competitive edge in the cereal industry. The increasing trend of health consciousness and the changing tastes can be known time to time by extensive market research. The feed back from consumers and the surveys conducted will allow the company to learn about their drawbacks and work up on them. It enables the business to minimize price sensitivity, improve profitability , differentiate itself from the competition , improve its image in the eyes of customer, achieve a maximum number of advocates for the company, increases customer satisfaction and retention, enhance its reputation, improve staff morale , ensure products and services are delivered right ‘first time’, increase employee satisfaction and retention, encourage employee participation, increase productivity and reduce costs, create a reputation for being caring customer-oriented company, foster internal customer / supply relationships and also bring about continuous improvements to the operation of the company.
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Kellogg Company’s Stakeholder Engagement Analysis Report
Kellogg: internal and external stakeholders.
The food industry has always been a very challenging environment for most organizations due to rigid standards for quality and changes in customers’ demands. However, Kellogg’s experience must be among the most complicated ones due to the issues that the firm has had with the engagement of its stakeholders. Because of the inconsistency in the corporate philosophy and the mismanagement of its brand, Kellogg has been experiencing difficulties with engaging its stakeholders despite the rather effective strategies that it utilizes.
At present, several stakeholders can be identified for the Kellogg Company. The internal ones include the company’s staff members and managers. Investors should also be included in the list along with the company’s Board of Directors (BoD) ( Kellogg’s case study , 2019). External stakeholders are, in turn, much more numerous; moreover, they may vary depending on the environment and market in which a company operates. For Kellogg, external stakeholders include their customers, suppliers, shareholders, investors, and health organizations. The society, in general, can be deemed as another stakeholder whose needs Kellogg’s leaders have to take into account ( Kellogg’s case study , 2019). Overall, the list of the firm’s external stakeholders is rather large.
Defining both internal and external stakeholders of the organization is crucial for creating the strategies that it should use to improve its performance. The analysis of stakeholders provides an insight into the demands and expectations that they have for Kellogg. Thus, the firm will have a chance to improve its situation and positively re-establish its brand image.
Stakeholder Engagement: Significance
To succeed in maintaining the levels of loyalty toward the organization among its stakeholders, one needs to engage with stakeholders actively. The notion of stakeholder engagement might seem rather plain since it mostly involves maintaining interaction with them ( Kellogg’s case study , 2019). However, due to differences in the needs and demands of stakeholders, the interest that they have n an organization, and their unique characteristics, the tools for keeping the levels of stakeholder engagement vary extensively (Barrett, Oborn, & Orlikowski, 2016).
For Kellogg, ensuring that the rates of stakeholder engagement become higher means introducing the notions of clarity and Corporate Social Responsibility along with people-oriented values into its organizational setting ( Kellogg’s case study , 2019). As soon as the firm proves that its values align with its current strategies and that it has the best outcomes for its stakeholders in its intentions, the levels of stakeholder engagement can be increased.
As a phenomenon, stakeholder engagement allows an organization to accomplish its goals and attain success in the selected area. For Kellogg, increased stakeholder engagement implies that the firm will receive the impetus for managing the current drop in its share prices and increase its profit margins. Furthermore, with the rise in the stakeholder engagement rates, Kellogg will be empowered to increase its influence and gain the attention of new audiences, at the same time keeping the current ones invested. Stakeholder engagement leads to a rise in stakeholder support and the levels of their loyalty, which are essential assets for any organization.
Support and engagement are of particularly high importance for Kellogg since the company has not been doing sufficiently well in the food market and, thus needs a significant boost to increase its performance rates.
Moreover, stakeholder engagement provides an organization such as Kellogg with crucial information about its audience, including customers, influencers, suppliers, and other participants that affect the organization’s performance in the UK market. By building stakeholder engagement, a firm such as Kellogg will gain critical insight into the expectations of its customers and investors, define the strengths and weaknesses of its partners, and develop the strategies for maximizing the quality of its staff’s performance ( Kellogg’s case study , 2019).
Therefore, stakeholder engagement is a notion that can be used to empower a company such as Kellogg for a positive change and expand its profit margins. While assuming that stakeholder engagement is the ultimate solution to all internal problems and external threats for Kellogg would be an overstatement, the described notion should be integrated into the organization’s current strategy. Thus, strategies that will lead to a rise in stakeholder engagement levels should become the foundation for the company’s current decision-making.
Strategies for Engaging with External Stakeholders
Maintaining communication with the target audiences is one of the pillars on which the concept of stakeholder engagement rests. Kellogg’s dialogue with its stakeholders has been consistent over the past few years, with new technological opportunities having been introduced recently ( Kellogg’s case study , 2019). Currently, the firm uses its K-values guide as one of its strategies for keeping the stakeholder engagement levels high (Kellogg Company, n.d.).
The concept of Corporate Social Responsibility is also integrated into the set of techniques that the company utilizes to increase its stakeholder engagement. Kellogg has been reinforcing the idea of CSR as the principle that it uses in all of its decision-making processes and, thus encouraging the people and organizations that support it to consider the specified notion as well. The focus on CSR has led to the creation of the setting in which its members strive to improve the levels of local and global well-being ( Kellogg’s case study , 2019).
Thus, the firm has affected the global community positively and encouraged it to accept the changes associated with saving the environment. The application and occasional update of Kellogg’s Global Code of Ethics is another strategy that the company adopts to boost the levels of engagement among its stakeholders. The described tool helps to promote positive ideas to the company’s stakeholders, thus inviting them to participate in the initiatives from which the global community benefits significantly.
The appeal to the target audience’s emotions and, therefore, the creation of a connection on an emotional level is a doubtless advantage of Kellogg’s current approaches toward enhancing stakeholder engagement. Remarkably, the notion of emotional involvement is characteristic of each strategy for boosting emotional engagement that Kellogg utilizes. As a result, the bond that Kellogg creates with its customers as a category of its stakeholders remains very strong and difficult to disrupt.
Environmental awareness is another positive aspect of the tools that Kellogg uses. Specifically, the adoption of the framework that is based on the firm’s code of ethics and the subsequent compliance with environmental standards needs to be regarded as a critical advantage (Sterling et al., 2017). In the era of environmentalism and ecological concerns, an organization has to develop a sustainable approach toward its production process and the relevant issues.
Finally, appealing to communities and creating a stronger bond with them is an important decision making which Kellogg has strengthened its engagement initiatives significantly. By creating food banks that support local charities, as well as offering opportunities for encouraging sustainable agriculture, Kellogg has promoted environmentalism in target communities, as well as within the industry, in general. The resulting drop in the levels of waste has affected the environment.
However, the approach that Kellogg uses to boost engagement among its stakeholders also incorporates several weaknesses. The first one concerns the disconnection between the tools that the company uses to engage with its stakeholders and the approach that it deploys to promote its products. Due to the absence of any links between the corporate brand and the engagement strategies, the organization may fail to keep its audiences devoted, which will lead to a gradual loss of interest toward Kellogg’s products.
The lack of opportunities for managing the possible problem of stakeholder conflict is another disadvantage of the tools that the firm currently utilizes to engage with its stakeholder. While the organization invests in both current stakeholders and future ones, it also needs to consider possible issues that may cause discontent among certain groups when appealing to the needs of others. For example, in its endeavor at attracting a wider range of buyers to its brand, Kellogg has recently failed to consider the health implications of increasing the percentage of sugar in its cereal, which has led to legal issues (Scandelius & Cohen, 2016).
Similarly, Kellogg refused the attempt at supporting several charities at once after it had decided to invest in the development of breakfast clubs for children ( Kellogg’s case study , 2019). The latter issue, however, is linked to the problem of task prioritization rather than external obstacles.
Engagement Initiatives and Vision for Sustainable Future
Given the current state of the company’s performance and success in increasing engagement levels among its stakeholders, it is strongly recommended to shape the company’s vision and mission toward a more focused framework. For example, the company will need to continue its food bank initiatives and the related environmental advances to reduce the negative effect of the recent mistake that the company made with food colorants.
The proposed decision will ensure external stakeholders, including its buyers, investors, and the global society, in general, that Kellogg made an honest mistake, and that the firm will avoid similar issues in the future. Moreover, the suggested strategy aligns with the current focus on environmentalism.
The change in the company’s approach toward engaging its audiences will require the application of the Stakeholder Theory (ST). According to the key tenets of ST, organizations need to create value-based not only on the needs of their shareholders, but also on the demands of stakeholders (Jones, Harrison, & Felps, 2018). ST suggests splitting stakeholders into two categories mentioned above, specifically, internal and external ones (Kull, Mena, & Korschun, 2016).
By building the input/output model that defines the relationships between all agents affecting an organization, its leaders can build an environment in which the firm’s efforts will remain appreciated. Moreover, the proposed model will allow determining possible sources of conflict and informing a company about the strategies available for resolving the conflict in question (Jang, Zheng, & Bosselman, 2017). From the perspective of the ST, Kellogg will need to reconsider its current communication and information management techniques.
It will be crucial for Kellogg to introduce an innovative approach toward communication with its external stakeholders. Innovative technology provides extensive options for keeping the dialogue with the target audiences uninterrupted, which is why Kellogg should consider incorporating blogging and online consultations into its range of tools for keeping its buyers’ engagement high. As far as the rest of its external stakeholders are concerned, using innovative approaches toward managing communication is also crucial.
Therefore, the organization will have to use networking to create and sustain a digital stakeholder engagement strategy (Illia, Romenti, Rodríguez-Cánovas, Murtarelli, & Carroll, 2017). The specified step may involve engaging the target population via digital channels such as corporate networks and similar tools. Among the advantages of the proposed technique, the opportunity to keep the information contained and reducing the chances of data leakage should be mentioned first (Grand, Holliman, Collins, & Adams, 2016). Therefore, the design of a network within which Kellogg will be able to contact its stakeholders is critical for the rise in their engagement levels. The opportunity to increase the speed and quality of feedback is another strength of digital engagement tools.
Increasing the levels of sustainability is also to be regarded as a necessary step toward improving the firm’s current situation and building loyalty levels among its stakeholders. Therefore, it is reasonable for Kellogg to consider investing in the engagement initiative that involves the promotion of sustainable agriculture. The specified choice will help Kellogg to address two issues simultaneously, both opening the dialogue with the community and supporting the environmental cause (Hagemann & Potthast, 2015).
Apart from supporting mainstream approaches to sustainable agriculture, Kellogg will need to explore other options. For example, the support of organic agriculture to reduce the carbon footprint that Kellogg’s activities may have on food will have to be included in Kellogg’s framework.
Despite the current problem with the company’s popularity among its customers and other external stakeholders, Kellogg still has the chance to build the rates of stakeholder engagement and retain them at the necessary level. However, the goal of increasing engagement rates implies changes to the corporate policies and the shift toward the consistent dialogue between Kellogg and its stakeholders. Thus, the sustainable future of the organization hinges not only on the selection of environmental policies but also on more basic issues such as effective communication and openness. The current lack of transparency affects the company negatively, making its every mistake work to the firm’s detriment instead of providing an opportunity for further improvements.
To make the necessary changes toward sustainability and engagement of stakeholders, Kellogg will need to change its corporate atmosphere toward a more open one, as well as start building the relationships with its external stakeholders based on mutual trust. Marketing itself as the organization that caters to the needs of its every stakeholder, Kellogg needs to meet the set standards, which means that it has to introduce new communication channels, process feedback carefully, and respond to its stakeholders respectively, addressing the sources of their discontent.
With the application of the proposed strategies for building stakeholder engagement, Kellogg will be able to establish improved, trust-based relationships with its external stakeholders, thus attracting possible investors and reinforcing the strength of its presence in the target market. Given the recent problems that the firm has had with its production processes and quality control, it is also important to develop effective control tools for the organization to keep the levels of customer satisfaction high and ensure that its brand integrity stays intact.
The specified steps will allow the organization to reconsider some of the aspects of its corporate philosophy and business ethics by introducing a stakeholder-oriented approach and the focus on global well-being into the firm’s value system. The expected outcome includes a rise in both stakeholder engagement rates and the levels of the firm’s popularity in the target market.
Barrett, M., Oborn, E., & Orlikowski, W. (2016). Creating value in online communities: The sociomaterial configuring of strategy, platform, and stakeholder engagement. Information Systems Research, 27 (4), 704-723.
Grand, A., Holliman, R., Collins, T., & Adams, A. (2016). “We muddle our way through”: Shared and distributed expertise in digital engagement with research. Journal of Science Communication, 15 (4), 1-23.
Hagemann, N., & Potthast, T. (2015). Necessary new approaches towards sustainable agriculture–innovations for organic agriculture. In Know your food: Food ethics and innovation (p. 550). Wageningen, Netherlands: Wageningen Academic Publishers.
Illia, L., Romenti, S., Rodríguez-Cánovas, B., Murtarelli, G., & Carroll, C. E. (2017). Exploring corporations’ dialogue about CSR in the digital era. Journal of Business Ethics, 146 (1), 39-58.
Jang, Y. J., Zheng, T., & Bosselman, R. (2017). Top managers’ environmental values, leadership, and stakeholder engagement in promoting environmental sustainability in the restaurant industry. International Journal of Hospitality Management , 63 , 101-111.
Jones, T. M., Harrison, J. S., & Felps, W. (2018). How applying instrumental stakeholder theory can provide sustainable competitive advantage. Academy of Management Review, 43 (3), 371-391.
Kellogg Company. (n.d.). Living our values . Web.
Kellogg’s case study . (2019). Web.
Kull, A. J., Mena, J. A., & Korschun, D. (2016). A resource-based view of stakeholder marketing. Journal of Business Research, 69 (12), 5553-5560.
Scandelius, C., & Cohen, G. (2016). Achieving collaboration with diverse stakeholders – The role of strategic ambiguity in CSR communication. Journal of Business Research, 69 (9), 3487-3499.
Sterling, E. J., Betley, E., Sigouin, A., Gomez, A., Toomey, A., Cullman, G.,… Filardi, C. (2017). Assessing the evidence for stakeholder engagement in biodiversity conservation. Biological Conservation, 209 , 159-171.
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Kellogg’s Case Study – New New Products From Market Research
The Kellogg Company is the world’s leading producer of cereals. Its products are manufactured in 18 countries and sold in more than 180 countries. For more than 100 years, Kellogg’s has been a leader in health and nutrition through providing consumers with a wide variety of food products. These are designed to be part of a
balanced diet and meet the different tastes of consumers. Kellogg’s focuses on sustainable growth . This involves constantly looking for ways to meet consumer needs by growing the cereal business and expanding its product portfolio. Market research is a specific area of marketing that informs businesses like Kellogg’s about the things consumers need, how best to design products to answer those needs and how to advertise those products to consumers. Market research goes
beyond finding out what consumers are thinking today. It can identify what consumers might want in the future. In this way market research helps a business to make more informed choices.
This reduces the risks for any new product development (NPD) . It also increases the likelihood that products will be well received by consumers when they are launched. Kellogg’s launched Crunchy Nut Cornflakes in the UK in 1980. Since then, it has become one of the most important brands for Kellogg’s with a sales value of £68 million*. In 2003 the Crunchy Nut brand created a brand extension . This involved using the Crunchy Nut name to launch a new product called Crunchy Nut Clusters. This variant has two varieties, Milk Chocolate Curls and
Honey and Nut. Both of them have enabled the brand to reach a wider group of consumers. This brand extension is now worth £21 million in annual value sales.*
This case study focuses on the importance of market research during the development and launch of Crunchy Nut Bites, a more recent extension to the Crunchy Nut brand. The objective of this innovation was to provide a new flavour and texture for consumers, helping Kellogg’s extend its share of the breakfast cereals market.
Why carry out market research?
Many organisations are described as product orientated . This means they develop a product and then look for a market to sell to. Kellogg’s is market orientated . This means that the whole organisation focuses on the needs of its consumers. It is therefore essential that it identifies and anticipates changing consumer needs before the development of new products. Market research adds value to businesses like Kellogg’s by identifying consumers’ needs. It helps Kellogg’s to plan ahead, for example, looking at what products or extensions it should develop and for whom. It focuses the business on the needs of its consumers. An organisation that does this can improve its
competitive advantage .
In an established market, such as breakfast cereals, there is little room to increase the overall sales in the market. Kellogg’s is therefore always looking for ways to strengthen its own portfolio. Designing new products is a good way of doing this. However, this can take a long time and may involve considerable costs. In addition to the resources required during development, suppliers must produce an advertising campaign to raise awareness of the product among consumers and encourage retailers to stock the product. Launching a new product can be a risky business. Of the hundreds of products launched every year in consumer goods markets, very few reach significant market share. In order to reduce risks, market research is, therefore, essential. A product extension is a less risky way of increasing market share by providing consumer products with new features under an existing brand. New product extensions give more choice to consumers and help them to feel more favourably about the existing brands.
Types of research
To develop a new Crunchy Nut brand extension, Kellogg’s commissioned primary research . This is research gathered firsthand to answer questions that are specific to the project.
Although primary research is often time-consuming and expensive, it is considered as a reliable source of information because it is directly from the consumer and is specifically designed to meet the objectives of a project. There are a number of different ways of collecting primary data. Sometimes agencies are employed to
collect data using, for example, street interviews or a questionnaire.
This is a systematic list of questions that obtain feedback from the consumers. For the development of Crunchy Nut Bites, Kellogg’s used various different methods of primary data collection.
Primary market data may involve qualitative research or quantitative research . Both types of data are valuable in understanding what consumers want or need. Qualitative data is concerned more about opinions, feelings and attitudes.
Quantitative data is in numerical form and is usually gathered from a large sample of respondents. Qualitative research establishes a conversation with consumers.
It prompts consumer reaction to, for example, a new product idea and helps researchers understand what they think of it, how it makes them feel, why they find it interesting or not. Qualitative research may be obtained through focus groups , where a moderator captures feedback from a group of six or seven consumers to the ideas shown to them. Those ideas may take the format of drawings or having new food prototypes to taste.
Quantitative research may use questionnaires administered to large numbers of respondents. This allows statistical analysis, such as the calculation of a mean score or percentages. It aims to give a representative picture of what consumers think of a new product idea or a new (real) food. It may involve the use of scales,
so numbers get associated with a particular meaning – for example, on a evaluation scale of 1 to 7, where 1 means ‘very poor’ and 7 means ‘excellent’. Crucially those numbers need to be interpreted to enable the business to understand the consumer’s overall response. In addition, Kellogg’s used secondary research which is existing research that has already been collected by other organisations. Sources of secondary data include books, journals, the internet and government statistics. Market research agencies collect a range of data which they process and use to provide organisations like Kellogg’s with research. The benefits of secondary research are that it is quicker and often less expensive than primary, although it may not always be completely related to the needs of a specific project.
Information gathering – discovery to selection
For Kellogg’s, the order in which the information is gathered is as important as the type of information being gathered. In order to develop the new Crunchy Nut Bites, Kellogg’s undertook four distinct stages of research.
Stage 1: Discovery
Initial research aimed to identify a set of new food ideas that would be suitable for developing a new Crunchy Nut product. Secondary research from Mintel and Datamonitor was used tofind out about innovation trends in the cereal market. It was also used to find out about new products, flavours and foods from around the world. Food developers at Kellogg’s used this information to come up with a number of new food ideas.
Focus groups were used to provide qualitative research. These were used to show consumers the new food ideas in the form of a number of different (real) food prototypes, including a mini crispy lattice product and a nutty triangle. The focus groups captured the attitudes and feelings of consumers towards the new foods. This primary research helped Kellogg’s to find out how new product suggestions could be developed and still fit in with the Crunchy Nut brand. It helped Kellogg’s to establish what consumers were looking for in terms of potential new flavours and textures.
The results allowed Kellogg’s to discard some ideas. Other ideas were appealing for consumers but needed refining and further development. At the end of this stage, Kellogg’s had a number of new food ideas that all seemed to appeal to consumers.
Stage 2: Selecting the best idea
This stage aimed to select the best idea arising from the stage 1 research. Kellogg’s put the ideas from the focus group on boards. The boards had pictures showing product ideas and a description of what the new product would be like. These boards were then shown to a large group of representative consumers in a quantitative survey. They were asked to rate those ideas against a number of scales, so Kellogg’s could identify which product ideas consumers liked best or disliked. The quantitative data created specific statistical information that indicated that a new Crunchy Nut Bites idea was perceived as the most appealing amongst all the ideas tested.
- It established what proportion of people liked the new product idea enough to buy it.
- It also identified those product ideas that had the best or least sales potential. The data collected also helped to calculate a sales forecast for the new product for the first and second year in market. The forecast was used by the finance department to set budgets , organise the supply chain and to schedule food production. Once the data was analysed and the product concept tested, Kellogg’s was able to make the strategic decision to go ahead with the new product.Production could then take place.
Information gathering – development to launch Stage 3: Crafting the idea into a complete new product
Once the best idea had been selected from stage 2, Kellogg’s needed to make this idea become a real product. The Crunchy Nut Bites food prototype recipe was refined using the feedback from another qualitative and quantitative survey.
The qualitative research helped Kellogg’s food technologists to explore the taste and texture of the new food idea in more detail. Kellogg’s needed to understand the ‘eating experience’ of the consumer before a decision could be made about how to develop the recipe in more detail. Following this stage, four product recipes were developed and these prototypes were then tested with representative groups of consumers in a quantitative survey to see which product consumers preferred. This enabled Kellogg’s to select the best one.
Also, at this stage, the pack design for the new Crunchy Nut Bites was developed. Several designs were developed aimed at giving the new product the same look and feel as the rest of the Crunchy Nut family. The packaging designs were tested with consumers, which enabled Kellogg’s to select the final packaging design for Crunchy Nut Bites
Stage 4: Forecasting sales for the new Crunchy Nut Bites
At Kellogg’s, every product has to undergo one final test prior to a new product launch. This is called the ‘In Home Usage Test’. The consumers are given the product to try for several days and this enables Kellogg’s to capture how consumers interact with the product for the first time. At the end of the trial, consumers complete a report on what they thought of the food in the form of
a questionnaire. This final survey measures how appealing the new product i
The data collected also helped to calculate a sales forecast for the new product for the first and second year in market. The forecast was used by the finance department to set budgets , organise the supply chain and to schedule food production. Once the data was analysed and the product concept tested, Kellogg’s was able to make the strategic decision to go ahead with the new product.
Production could then take place.
Kellogg’s used market research throughout the whole development process for a new product for the Crunchy Nut range, from the initial idea to the planning of production and delivery. During the earlier stages of research, consumer responses helped Kellogg’s to explore lots of different ideas in an open way. It then crafted some ideas in more detail and screened those ideas with consumers to select the one which seemed to have the highest appeal.
The idea became real by testing several recipes, refining the food prototype selected and developing the design for packaging. Once the food and packaging elements for the new product had been developed, the whole product was tested with consumers to ensure it met their needs. The data also provided a sales forecast to predict the first two years of sales of Crunchy Nut Bites.
Crunchy Nut Bites has extended the Crunchy Nut family of products. In doing so it has brought new consumers to the brand and increased its consumption. Kellogg’s launched Crunchy Nut Bites in September 2008. Sales data shows it was one of the best performing brands to launch in the breakfast cereal category with a sales value of £6.9 million in its first full year of sales.* This illustrates that the detailed market research undertaken during the planning stages was valuable. It helped to ensure that the product extension hit the spot with consumers straight away.
Budgets: Financial plans for the future that show where costs and revenues will
come from. Supply chain: The chain of processes linking the manufacture of products with physical distribution management so that goods are moved quickly and efficiently through various processes to meet consumer needs.
- Describe the purpose of market research.
- Explain the difference between primary research and
- secondary research.
- Analyse why an organisation like Kellogg’s would use
- both qualitative and quantitative data.
- Evaluate why market research can reduce the risks of
- a new product launch.
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Frank b. kellogg wins the nobel peace prize on nov. 27, 1930.
Kellogg rose from a small farm in Olmsted County to being the highest-ranking diplomat in the United States.
Frank Billings Kellogg was born in Potsdam, New York, in 1856. In 1865, his family moved to a small farm in Olmsted County, Minnesota. Five years later, in 1870, his father’s poor health forced Frank to take over the working of the farm. The responsibility of running the farm meant that he could no longer attend school, and this year marked the end of Kellogg’s formal schooling. He continued his education when he could. When he was nineteen, he moved to Rochester to study law with a lawyer in the area. He supported himself during this time by working at farms near Rochester and running errands for the lawyer. All of his work paid off in 1877 when he was admitted to the Minnesota Bar.
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Kellogg built his legal career using powerful connections and a willingness to immerse himself in corporate law. In his first major case, he represented two small communities who sought reimbursement from two railroad companies. Given the power of railroad companies at the time, Kellogg needed assistance to make the case against them. He turned to his distant cousin, Cushman Davis, a former governor of Minnesota, who helped him win. When Davis was elected to the Senate in 1887, he suggested that he, Kellogg, and Cordenio Severance form a partnership. Together, they built one of the most successful corporate law practices in the Midwest. James J. Hill and many other major corporate figures turned to them for advice.
After completing work on the anti-trust cases, Kellogg turned to Minnesota politics. In 1916, he was the first person elected to the Senate directly by the people of Minnesota-before the Seventeenth Amendment state legislatures elected Senators. He served six years in the Senate before the Farmer-Labor candidate, Henrik Shipstead , defeated him in 1922. The next year, President Calvin Coolidge named him Ambassador to England. Three years later, Coolidge appointed him Secretary of State. Kellogg would make his most lasting mark in this role.
After his time as Secretary of State, Kellogg spent five years as a judge for the World Court in the Hague. He retired from the Court in 1935 due to ill health. Two years later, he died at his home in St. Paul.
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Case Study Citi Ventures Provides Portfolio Company Kasa with PropTech Sector Expertise, Strategic Advice, Partnership Support and More
Published on November 22, 2023 The opinions expressed in this blog are solely the authors' and do not reflect the views of Citi.
Kasa Living, Inc. (Kasa) is the leading tech-powered, flexible accommodations brand and operator that partners with real estate owners to meaningfully increase the profitability of investor-owned multifamily apartments, boutique hotels and single-family homes while delivering an experience that guests love and seek out.
Launched in 2016 by founder and CEO Roman Pedan , the San Francisco-based property technology (proptech) startup now operates close to 100 properties in over 30 cities across the U.S. — consistently improving property profitability by over 50% and upleveling property review scores meaningfully across online reputation channels.
Supporting Kasa Through the PropTech Market Downturn
Citi Ventures recently co-led Kasa’s Series C funding round in a joint venture with Citi Spread Products Investment Technologies (SPRINT).
Since welcoming Kasa into our PropTech portfolio , we have worked side-by-side with Roman and his team to help the company progress toward its goals amid the most challenging proptech market of the last decade.
Led by our Head of PropTech Investing Jeff Flynn , Citi Ventures has leveraged our deep proptech expertise and unique position in the ecosystem to help Kasa connect with new potential sources of capital, build out its team, evolve its go-to-market strategy and plan for the future. “Jeff has seamlessly intertwined his position at Citi and his expertise in proptech to help us make progress this year,” Pedan said in a recent conversation.
Helping Kasa Raise Capital and Grow
Shepherding and evangelizing kasa throughout citi’s global enterprise.
Of course, one of the most impactful relationships any startup — especially a proptech startup — can have is with a major bank like Citi, which is a significant player in the global real estate market across several business lines.
While potentially powerful partners, however, complex global enterprises like Citi can be difficult to navigate; without a guide, startups and small businesses may struggle to connect to the right people and teams. “Step one in being part of the Citi ecosystem is making sure it knows about Kasa and I know about it,” says Pedan.
Fortunately for Roman, he has a guide: Citi Ventures. “Jeff and team have helped us productively navigate Citi,” Pedan notes. “We’ve been able to seamlessly liaise with teams across the bank, including Citi Commercial Real Estate and Citi SPRINT.” Both Citi Ventures and SPRINT have introduced Pedan to key Citi colleagues, and Citi Ventures has included him in its annual FinTech Summit, Citi-wide virtual panel on the Future of Travel and more — leading to fruitful conversations and opening up numerous opportunities for partnership. “We believe future collaboration across these fronts has the potential to benefit both Kasa and Citi materially,” notes Pedan.
Being part of the Citi family has also helped Kasa connect to more property owners and investors looking to buy properties — which is key for the firm, as “we’re more constrained on properties than demand; we fill every space we have,” says Pedan. In pursuing a property purchase with a large investor, for example, Pedan was able to capture critical value from his relationship with Citi. “It was key,” he reflects.
Helping Kasa Build a Top-Tier Team and Chart a Path into the Future
While proptechs face unique challenges given their position within several overlapping markets, in many other ways they are like most startups: they are constantly redefining themselves in an effort to find long-term product-market fit, and they rely on having the right team in place to accomplish their evolving goals. That includes not only the founding team — which in Kasa’s case boasts alumni of Airbnb and real estate investors Apollo Global Management, KKR and Walton Street Capital — but also sales, marketing and more.
Here, too, Flynn has lent a hand, leveraging his network to source prospective candidates for key roles at Kasa. In one recent case, Kasa was looking to pivot its go-to-market strategy to align with the changing real estate landscape and needed the right person for the job. Roman reached out to his investors for help, and Flynn “connected the dots” to a contractor who came in and upgraded Kasa’s marketing collateral, advertising spend, customer relationship management (CRM) platform and more in the span of a few months. “[That person] was extremely valuable, saved us time and got us up to speed on various initiatives,” Pedan says.
Since then, Flynn has introduced Pedan to several other high-quality candidates for additional roles at Kasa. “These shots on goal with great candidates are putting us in a position to win,” Pedan continues.
As a board observer for Kasa, Flynn has also provided “thoughtful advice on strategy, tactics and crucial personnel decisions [that have] shaped our strategic path and decision-making,” says Pedan. From getting Kasa in front of key stakeholders at major proptech conferences to helping the company set a budget that will enable it to build a profitable business over the long term, Flynn has been supporting and furthering Pedan’s vision since Citi Ventures joined Kasa’s capitalization table.
“We’ve felt genuinely supported by Jeff’s work and appreciate the tangible value his collaboration has brought to Kasa,” concludes Pedan. “ His work is a testament to the positive and meaningful impact that Citi Ventures imparts on its investment partners. We're looking forward to building on the partnership in the years ahead.”
For more information on how Citi Ventures can help bring positive, meaningful impact to your fintech, proptech or enterprise tech startup, email Sunita Rao, Platform & Partnerships Lead, Citi Ventures, at [email protected] .
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Kellogg Company: Food Waste in Global Manufacturing Operations
Posted on September 13, 2017 - Manufacturing
ABOUT KELLOGG COMPANY
At Kellogg Company, we are driven to enrich and delight the world through foods and brands that matter. Kellogg is the world’s leading cereal company; second-largest producer of cookies and crackers; a leading producer of savory snacks; and a leading North American frozen foods company. Kellogg is a member of the World Business Council for Sustainable Development (WBCSD), part of the United Nations (UN) Global Compact, and is incorporating the UN Sustainable Development Goals (SDGs) in all that we do. Corporate Responsibility is part of our essence, instilled more than a century ago by our company’s founder W.K. Kellogg.
WHY IS KELLOGG COMPANY MEASURING FOOD LOSS AND WASTE (FLW)?
As a global food company, we believe we have a significant role to play in helping end hunger, achieve food security, improve nutrition, and promote sustainable agriculture (UN SDG 2). We will do our part to halve per capita global food waste at the retail and consumer level and to reduce food losses along the production and supply chains, including post-harvest losses, by 2030 (UN SDG 12.3).
To support these efforts, Kellogg was one of the first U.S.-based companies to join Champions 12.3 and to become a U.S. Food Loss and Waste 2030 Champion. Kellogg also co-leads the climate-smart agriculture project of the WBCSD and supports its Statement of Ambition, which includes making 50 percent more food available and strengthening the climate resilience of food communities. See our Food Waste Position Statement for more information.
During our first generation of sustainability commitments from 2005 to 2016, Kellogg significantly reduced waste (of all types) sent to landfill. In late 2016, we set a new 2020 goal to reduce total waste generated by our plants. Food waste represents the largest component of our waste stream and therefore the greatest opportunity for reduction. We estimate that reducing food waste within our facilities represents approximately $30 million in potential cost savings, based on the cost of raw materials, confirming the clear financial benefit of measuring (and reducing) food loss and waste.
We believe leftover or unwanted materials should be viewed as valuable assets rather than “waste” and sent to landfill as a last resort. Our ultimate goal is therefore to prevent food from being wasted in the first place and that any edible surplus food is donated to people in need. In cases where this is not appropriate, we send it to be used as animal feed. We follow the U.S. EPA Food Recovery Hierarchy, sending to landfill only as a last resort when there are no other viable options.
WHAT HAS BEEN YOUR EXPERIENCE WITH USING THE FLW STANDARD ?
We have found the FLW Standard to be very helpful because it provides consistent language to use when talking about food waste and standard ways to measure and report. We used the FLW Standard to report our 2016 food waste by destination in our Corporate Responsibility Report (see page 25). This 2016 data will serve as the baseline against which we will continue to report.
The table below shows how we meet the requirements of the FLW Standard . Additional information about our food loss and waste reporting methodology and its alignment with the standard is provided below and shared on our website .
WHAT CHALLENGES IN MEASURING FOOD LOSS AND WASTE HAVE YOU ENCOUNTERED AND HOW DID YOU OVERCOME THEM?
In 2015, we used the draft FLW Standard to expand our tracking of measurable food waste to eight destinations outlined by the standard, including animal feed, biobased materials/biochemical processing, codigestion/anaerobic digestion, composting, controlled combustion (incineration), land application, landfill, and sewer/wastewater treatment.
Our first challenge was to identify which Kellogg facilities needed new ways to record food waste data in our internal tracking system and to split apart food waste that was previously being reported in a combined fashion. For example, a facility may have been reporting total waste incinerated for many years, but we were now asking it to report food waste incinerated separate from general waste incinerated.
Our second and biggest challenge has been estimating food waste sent to certain destinations, especially for sewer/wastewater treatment. We were able to use the concentration of our effluent at certain facilities using suspended solids, biological oxygen demand (BOD), and chemical oxygen demand (COD) to estimate the amount of food present in our effluent. We then extrapolated this to all of our global facilities based on effluent volumes and the types of products made at each location. Additional details are provided in the Methodology section.
WHAT ACTION HAS KELLOGG COMPANY TAKEN AS A RESULT OF MEASURING ITS FOOD LOSS AND WASTE?
We have been measuring our waste since 2005 and are working to meet our commitments to also reduce food waste in three important ways:
- FARMS: Working to eliminate post-harvest loss so that more of the food which is grown is consumed.
We are working with partners to develop and promote post-harvest loss reduction practices in major ingredients relevant to Kellogg by developing sustainable agriculture programs with smallholder farmers in India, Bangladesh, South Africa, Thailand, Philippines, and other countries that promote and improve post-harvest loss reduction. Please see our Corporate Responsibility Report for additional details.
- MAKING OUR FOOD: Working to eliminate food waste in our processes, capturing it instead to feed people in need, and when that use is not appropriate, ensuring it is used for animal feed.
We are committed to reducing by 2020 total waste in our facilities by 15 percent per metric tonne of food produced. We set this target after achieving a 68 percent waste-to-landfill reduction from 2005 to 2016. In 2016, only approximately 1.5 percent of our food waste went to landfill, which is why we are focused on looking beyond “landfill diversion” to reduce in total the amount of food waste (as well as other materials). This moves our focus up the food recovery hierarchy toward elimination and reuse.
- REACHING OUT TO CONSUMERS: Working to standardize food date labels and educate consumers on whether food is safe to consume, as well as delivering tips and packaging innovation to help them reduce unnecessary food waste.
We are working with the industry to standardize food date labels that clearly communicate whether food is safe to consume, which helps consumers reduce their food waste. We are also increasing the use of resealable packaging in some of our cereals and granolas, snacks, and frozen foods to help further reduce consumer-level food waste.
- COMMUNITIES: Using our global signature cause platform Breakfasts for Better Days™ to assure our food also goes to help those in need due to either natural disasters or chronic hunger in communities around the world.
We are committed to fighting hunger and feeding potential through our global signature cause platform Breakfasts for Better Days™ with a goal to create 3 billion “Better Days” for people around the world by 2025. We are doing this in five ways: donating food to people in need, expanding kids’ breakfast programs, improving the livelihoods of farming families and communities, enabling our employees to be involved through volunteering events, and engaging citizens in the food security conversation, as well as other Breakfast for Better Days™ initiatives.
WHAT IS INCLUDED IN THE SCOPE OF THIS FLW INVENTORY?
The following figure visually represents the scope of Kellogg Company’s food waste inventory, using the FLW Standard . All destinations are included within the scope of this FLW inventory; however, food waste only goes to those destinations marked with a green check.
HOW DOES THIS INVENTORY MEET THE FLW STANDARD’S REQUIREMENTS?
The table below provides a summary of how this FLW inventory meets the eight reporting and accounting requirements contained in the FLW Standard.
ABOUT THE METHODOLOGY
About the authors.
This case study was submitted by Erin Augustine (Kellogg Company) with input and review by Liz Goodwin, Brian Lipinski, JP Leous, and Kai Robertson (representatives of WRI), as well as FLW Protocol Steering Committee representative Dalma Smogyi of the World Business Council for Sustainable Development.
ABOUT THE FOOD LOSS AND WASTE PROTOCOL
The Food Loss & Waste Protocol (FLW Protocol)—a multistakeholder partnership—has developed the global Food Loss and Waste Accounting and Reporting Standard for quantifying food and/or associated inedible parts removed from the food supply chain—commonly referred to as “food loss and waste” (FLW). World Resources Institute (WRI) serves as the FLW Protocol’s secretariat.
For questions, please contact [email protected].
Published: August 2017
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