Billion-Dollar Cereal Battles (3 Stocks to Watch)

BY ANDY SWAN

Whether your go-to choice was Lucky Charms with its multi-colored marshmallows, Cinnamon Toast Crunch with the leftover milk turning into “cinnamon-flavored liquid gold,” or fiber-filled Cheerios, there is something out there for everyone.

And with the breakfast titan General Mills (GIS) reporting earnings today, I wanted to take a step back and show how this seemingly simple meal became a $22 billion industry…

The Rise (and Fall) of Cereal

Cereal wasn’t born in a bustling city or a fancy food lab. Instead, it sprouted in the most unlikely of places, thanks to a pair of brothers with a vision. (Something my brother Landon and I can relate to.)

Meet the Kelloggs: John Harvey and Will Keith, two brothers running a health resort in Battle Creek, Michigan, with a lifestyle that would make even the most dedicated health nuts of today raise an eyebrow. (Think vegetarianism, zero alcohol, and a big no-no to our beloved caffeine fixes.)

As the head honcho of the Battle Creek Sanitarium, John Harvey was on a mission to reform America’s eating habits. But let’s face it, his diet plan was a bit… bland. So, in a bid to add some flavor to their patients’ plates, the Kellogg trio (including John’s wife, Ella) began tinkering with recipes.

One night, while attempting to manufacture this digestible bread variant, they accidentally created wheat flakes… And the world’s first flaked cereal product was born.

Business-savvy brother Will was able to package and market this creation as the iconic Kellogg’s (K) Corn Flakes we all know today.

Source: U.S. National Archives

Consumers enjoyed the convenience and long shelf life of this breakfast staple for decades.

It turned breakfast from a rushed endeavor to cook food before racing off to work and school to families actually being able to sit and spend time together at the table, establishing breakfast as “the most important meal of the day.”

A century later, many of us still value time-saving food options. But cereal has morphed into more of a dessert than a breakfast food – with loads of sugar, chocolate, and ingredients most people can’t even pronounce jammed into each bite.

And consumers are, well… over it.

Sugary, carb-packed cereals are being swapped for nutrient-rich breakfasts and healthier on-the-go breakfast options.

And as America’s appetite shifts, cereal titans like Kellogg’s, General Mills, and Post Holdings (POST) are having to make radical moves to keep up.

I’ll show you how these players are adapting – for better or worse – and what to make of General Mills after its just-released earnings report…

Click here to continue reading 

Until next time,

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