Kellogg’s CEO says eat cereal to save money, though prices are up 28%

In the face of the highest food expenses in three decades, Kellogg’s CEO Gary Pilnick is suggesting that consumers eat cereal for dinner to economize.

During a CNBC interview, Mr. Pilnick highlighted the company’s new advertising campaign which playfully suggests giving “chicken the night off” in favor of Kellogg’s cereal brands such as Frosted Flakes, Froot Loops, Corn Flakes and Raisin Bran for dinner.

“The cereal category has always been quite affordable, and it tends to be a great destination when consumers are under pressure,” Mr. Pilnick said last week. “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.”

Social media users went ballistic, depicting the campaign as out of touch, especially given that grocery prices have inflated by 26% since 2020. The critique is amplified when considering Mr. Pilnick’s 2022 earnings exceeding $4 million, while boxes of Kellogg’s cereal are now seen on shelves for over $7 – striking many as an impractical primary dinner option.

The Bureau of Labor Statistics notes that cereal prices have jumped 28% since January 2020, with Kellogg’s taking measures to raise their own prices by 12% in the last fiscal year.

CNBC host Carl Quintanilla posed a question about the potential for the campaign to be perceived negatively, asking Mr. Pilnick if encouraging customers to eat cereal for dinner could “land the wrong way.”

“In fact, it’s landing really well right now,” Mr. Pilnick said. “Cereal for dinner is something that is probably more on trend now, and we would expect to continue as that consumer is under pressure.”

The COVID-19 pandemic and other inflation pressures brought about significant increases in grocery and dining expenses. Data from the Department of Agriculture reported by the Wall Street Journal indicate that in 2022, consumers allocated 11.3% of their disposable income to food, matching peak levels not seen since 1991.