Which is worse – the fact that Americans are giving their kids breakfast cereals that are 45% sugar, or that they are paying a 20,000% mark-up on the sugar?
Oct 12, 2019
Star Tribune – Without cereal, Post Consumer Brands wouldn’t exist.
Of the nation’s three dominant cereal manufacturers, the Lakeville-based maker of Fruity Pebbles and Honeycomb is the only one that exclusively sells bowl-ready breakfast food.
As the company looks back on 100 years of its Malt-O-Meal business and 125 years for its Post-branded cereals, a new chief executive is looking into a future rife with challenges to its bedrock food.
Cereal remains the No. 1 breakfast food, but consumption has been in gradual decline for several years.
It’s losing ground to eggs, fruit and breakfast sandwiches as consumers are increasingly trying to reduce sugar in their diet and incorporate healthful, on-the-go and satiating morning meals.
Last year, Post hired a new CEO, Howard Friedman, who previously played a key role in the integration of Kraft and Heinz in 2015 and says “the death of cereal” is overstated.
“All the changes happening across so many dimensions simultaneously is causing everyone to scratch their heads a bit. I think that’s true for us and for the entire industry,” Friedman said.
- QUICK MATH: A 40 oz box of Fruitty Pebbles sells for $5.99 at BJ’s. The contents are 45% sugar by weight so you’re paying $2.70 for the sugar. The wholesale price of sugar is about 12 cents a pound. Based on that, Post spent about 13.5 cents on sugar per box, for a final markup of 200 to 1 on the sugar. – Editor
Post Consumer Brands was created in 2015 when St. Louis-based Post Holdings bought Northfield-based MOM Brands, best known for making the large bagged Malt-O-Meal cereals, and merged it with its Post Foods subsidiary.
The parent company consolidated its cereal business at a new headquarters in Lakeville, making it the third-largest cereal company in the U.S. behind Golden Valley-based General Mills and Michigan-based Kellogg Co.
Honey Bunches of Oats is one of the top sellers for the company.
Those three companies control 80% of all cereal sold in the United States.
Post sold $1.8 billion worth of cereal last year, a 1% increase when excluding newly acquired brands that can artificially inflate growth rates.
Despite consumers moving toward less sugar and better-for-you options, it was the sugary breakfast cereals that saved the day … Read more.
INGREDIENTS: FRUITY PEBBLES CEREAL [Note to Post: Sugar is not a fruit. – Ed.] – (Rice, Sugar, Hydrogenated Vegetable Oil (Coconut And Palm Kernel Oils), Salt, Contains Less Than 0.5% Of Natural And Artificial Flavor, Red 40, Yellow 6, Turmeric Oleoresin (Color), Blue 1, Yellow 5, Blue 2, Bha (To Help Protect Flavor). Sodium Ascorbate (Source Of Vitamin C), Ascorbic Acid (Vitamin C), Niacinamide, Reduced Iron, Zinc Oxide (Source Of Zinc), Vitamin B6, Vitamin A Palmitate, Riboflavin (Vitamin B2), Thiamin Mononitrate (Vitamin B1), Folic Acid, Vitamin B12, Vitamin D.)