Flash Quiz: What’s the No. 3 cereal maker in the nation based on pound sales? If you said Ralcorp Holdings, you’d be wrong on two scores. First, Ralston got out of the business earlier this month when it completed its spin-off of Post Cereal. Second, it was passed by Malt-O-Meal last year for the No. 3 poundage spot behind General Mills and Kellogg. But wait, this just in: Malt-O-Meal announced this morning that it’s changing its name to MOM Brands.
"Our new corporate identity is a better fit for the wide range of products that we now offer," says MOM Brands CEO Chris Neugent in a release. "Malt-O-Meal will continue to be a brand name we sell, but it will no longer be our company name."
MOM Brands’ new corporate identity is also an upper-case version of the most powerful brand evangelists in the world, but we’ll leave it to the shrinks to elucidate that angle on another day. They’re not awake yet.
Post Holdings, meanwhile, is embarking on “more aggressive marketing and promotional spending” as it stands alone from Ralcorp, which had acquired it with great enthusiasm from Kraft Foods in 2008, E.J. Shultz informs us in Ad Age.
For the record, Post Cereals is still No. 3 in terms of market share, but it dropped from about 15% to 11% in the four years it spent under Ralcorp, according to SymphonyIRI, which excludes Walmart. Sanford C. Bernstein analyst Alexia Howard, however, sees Post's market share in ready-to-eat cereals slipping a bit less -- from 14% in 2008 to 12% in 2011, according to the St. Louis Post-Dispatch.
That’s about to change, if all goes according to the plans being hatched by EVP-marketing James Holbrook, former CEO of Emak Worldwide.
“The company's new management says the brands will benefit from more focus and is planning a multipronged attack to correct what it says Ralcorp did wrong,” writes Schultz. It will be launching new campaigns from two new agencies –- for Honey Bunches of Oats from Upshot, Chicago, and for Great Grains from Womenkind, New York. It also plans to increase its social and digital efforts, add sales staff and put more emphasis on public relations.
"The Post brands are great," consultant David Diamond tells Schultz. “They are brands that in the past companies would never think about selling. But one of the corporate mantras of recent decades has been you either want to be No. 1 or No. 2 or get out of the business."
The “corporate marriage” between the Post bands and Ralcorp, “was short-lived and troublesome,” John C. Sherwood points out in the Battle Creek Enquirer. When it left Kraft, Post lost its “powerful in-house sales force as well as its mechanisms for measuring trade spending. Ralcorp's broker sales strategy could not compensate for the problems,” Sherwood gleans from a Securities and Exchange Commission filing.
The divorce is “a significant new step in the history of the company that C.W. Post launched as the Postum Cereal Co. in 1895 to sell an innovative coffee substitute based on grain products and molasses,” he writes. “Post began to produce Grape-Nuts two years later, becoming the first in the world to manufacture and market a cold-cereal breakfast product.”
Post Foods’ corporate headquarters remain in Brentwood, Mo., Sherwood reports, with U.S. divisional headquarters in Parsippany, N.J. Its main production facility is in Battle Creek, Mich., with smaller plants in Jonesboro, Ark., Modesto, Calif. and Niagara Falls, Ont.
Ralcorp, meanwhile, will continue to manufacture the store brands that it has developed into a very lucrative business –- in fact, it’s evidently attempting to brand the designation, as it refers to generics as upper-case Store Brands in a bit of a encomium to the species on its website titled “The Store Brand Story.”
“More consumers are purchasing Store Brand (private label) products today than ever because of the growing awareness of the good value Store Brands offer,” it says. “Store Brand prices are almost always lower than the national brands. Consumers are also very often finding their quality and nutritional value equal to their national brand counterparts.”
Now that we’ll all caught up with the current state of affairs in the land of milk and grains, let’s have a bowl, shall we? Make mine Wheetabix, with a topping of low-fat organic milk and a splash of grade B maple syrup.