MINNEAPOLIS -- General Mills Inc., the maker of Cheerios and Wheaties, passed Kellogg Co. for the first time as the largest U.S. cereal maker based on revenue.
General Mills held 32.5 percent of the U.S. market based on dollars spent for the 12-week period that ended Dec. 6, according to Goldman, Sachs & Co. analyst Nomi Ghez, citing sales data collected by Information Resources Inc. That beats the 31.6 percent share notched by Kellogg.
General Mills is succeeding by developing variations of its best-known brands such as Chex and new products including Cinnamon Toast Crunch that aren't readily copied by makers of discount and generic cereals. Kellogg's top cereals, including Frosted Flakes and Rice Krispies, are more easily duplicated by companies such as Quaker Oats Co. and Ralcorp Holdings Inc.
General Mills "clearly seems to be doing much better now," said Ghez, who rates General Mills shares "market perform."
That strategy allows General Mills to fetch about 30 cents more per box than Kellogg because its customers are willing to pay more for its special flavors and varieties.
Kellogg still ranks as the top U.S. seller of cereals based on the number of boxes sold. By that measure, Kellogg had 31.6 percent of the market for the 12-week period, compared with 26.9 percent for General Mills.
General Mills is winning sales even as the U.S. market shrinks, as consumers switch to bagels and other foods. Cereal sales fell 2.2 percent in the period based on volume and 1.2 percent based on dollars spent.
Information Resources monitors sales at supermarkets, drugstores and mass-merchandisers such as Wal-Mart Stores Inc.
Pub Date: 1/01/99