Global Operations
North America
Ready-to-eat cereal.
In 2007 we saw sustained growth in our North American Retail Cereal business. Plus, measured channel share grew for the full year to 34.1%, making this the seventh consecutive year of share growth in the U.S. retail ready-to-eat cereal category.
By continuing to focus on nutrition, taste and convenience, Kellogg innovation really resonated with consumers. Our innovations, including Special K Chocolatey Delight, proved a big success both at breakfast and as an evening snack. Plus, perennial favorites Raisin Bran Crunch cereal and Special K cereals responded well to our advertising strategies.
Rice Krispies, one of our oldest brands, also experienced a strong year, thanks to the introduction of Rice Krispies with Real Strawberries and our "Childhood is Calling" advertising campaign. Great innovation continued in kid's cereals with Froot Loops Smoothie and Corn Pops Peanut Butter, which had new advertising campaigns. Each of these innovations lifted base brand sales as well.
All-Bran continues to be one of our strongest global brands, and we launched All-Bran Strawberry Medley cereal in the U.S. in January 2008. Kashi had another successful year and added to its popular line with Kashi GoLean Heart to Heart Blueberry cereal and Kashi GoLean Honey Almond Crunch cereal, which contains DHA omega-3.
Throughout the U.S., consumers are having "milk-sippin' fun" with new Kellogg's Cereal Straws – launched with Cocoa Krispies and Froot Loops flavors.
Canada's cereal business had a strong year. New products such as Special K Fruit & Yogurt, All-Bran Guardian, Frosted Mini-Wheats Strawberry and Rice Krispies Vanilla cereals, added to the strong sales growth. Additionally, our largest cereal brand in the Club channel, Special K, experienced broad growth.
Snacks.
North American Retail Snacks had a very good 2007. Our business, consisting of cookies, crackers, wholesome snacks, fruit-flavored snacks and toaster pastries, lapped strong 2-year growth rates by building on 11% in 2006 and 7% in 2005. We posted 7% internal sales growth to finish the year.
We're able to maintain sustainable growth by building existing brands and targeting innovation by utilizing our DSD (Direct Store Delivery) distribution system. Recently, the Advantage Group Performance Monitor rated the Kellogg DSD system #1 among all snack food companies.
We increased advertising at a double-digit rate and had a particularly good innovation year with portion-controlled packs. In 2006 we introduced 100 Calorie Right Bites packs in Cheez-It, Keebler Fudge Shoppe Fudge Stripes and Chips Deluxe. We built upon these successes in 2007 by introducing Right Bites Fudge Shoppe Grasshopper and assortment packs.
