How millennial mothers are fueling the Kellogg’s boycott by making cereal from scratch

WK Kellogg CEO Gary Pilnick mentioned in a Feb. 21 CNBC interview that cash-strapped households ought to eat “cereal for breakfast” as a approach to economize. 

“The cereal category has always been quite affordable, and it tends to be a great destination when consumers are under pressure,” he mentioned.

Whereas the phrase has been utilized in Kellogg’s advertising and marketing for years, it’s rubbed shoppers the fallacious approach amid inflation-induced grocery cost increases—which had been 5% greater in 2023 than the 12 months earlier than. At the same time as inflation charges level off, costs of foods and drinks fundamentals have stayed excessive.

“There’s this mega corporation boasting about all their profits that they’ve been making, and they continue to raise their prices,” Donley instructed Fortune. “And then they have the nerve to go and tell people, ‘Well, if you’re struggling to feed your families, buy our products.’”

WK Kellogg has remained resilient in a time of decreased consumer spending, counting on cereal mainstays like Froot Loops and Corn Flakes to energize profits. The corporate has benefited from worth will increase, seeing a fourth-quarter price/mix increase of seven.5%, regardless of a ten% drop in quantity. Prime brass Pilnick makes $1 million yearly as a base wage, with a further $4 million coming from incentive compensation, based on an SEC filing. The cereal business is mostly going robust: General Mills is projected to beat earnings estimates forward of its March 20 earnings report. 

Seeing WK Kellogg reap the rewards of elevating costs has incited loads of on-line anger. Pilnick’s LinkedIn publish following his CNBC interview was flooded with critical comments, and TikTok has begun to arrange a boycott of Kellogg’s merchandise for the second fiscal quarter beginning April 1. The #boycottkelloggs tag has over 18.5 million views on the app, and the efforts have spurred the creation of letthemeatcereal.data, a web site outlining the aim and calls for of the boycott, which embody a 25% lower in Kellogg’s model costs and the removing of “harmful chemicals” from the merchandise. The boycott contains merchandise from each WK Kellogg and Kellanova, two unbiased corporations that split from Kellogg Company in 2023.

WK Kellogg and Kellanova didn’t reply to Fortune’s requests for remark.

Donley is amongst a number of on-line creators taking the boycott in a novel route, posting how-tos for selfmade breakfast options in assist of the boycott, together with Rice Crispies, Cinnamon Toast Crunch, and Cookie Crisp (although the latter two are produced by Common Mills, not WK Kellogg). 

As a mother attempting to maintain processed meals out of her dwelling, Donley started milling her personal grains for dwelling bakes about two years in the past. It was a part of a better curiosity with the homestead motion, and an effort to “to get back to [her] roots and where [her] food comes from.” Her TikTok account, with over 38,000 followers, paperwork her life-style and recipes. For Donley, the choice so as to add a political bent to her movies and endorse the boycott was a pure development. Making her meals from scratch was a option to regain company over the place her meals comes from.

“We as citizens and consumers have really lost control over everything,” she mentioned. “We’re just kind of subjected to whatever these big corporations want us to be subjected to for them to make a better bottom line. People just want to take their power back.”

Although phrase of the boycott has shortly unfold on-line, analysts warn it might not have its meant impact.

‘Boycotts are a very blunt instrument’

Whereas a noble motion, boycotts haven’t at all times been efficient in getting companies to fulfill shopper calls for, Tyson Browning, professor of operations administration on the Neeley College of Enterprise at Texas Christian College, instructed Fortune.

“Boycotts are a very blunt instrument, and when people have a grief with, say, a CEO, then choose to boycott an entire company, there’s naturally a lot of collateral damage that they may or may not intend,” Browning mentioned.

Kellogg is definitely acquainted with this impact. In 2021, staff from 4 Kellogg’s cereal vegetation went on strike for 3 months after benefits and pay disputes weren’t resolved on the bargaining desk. Shoppers organized a Kellogg’s product boycott on the r/antiwork subreddit to assist the employees. Although the boycotts could have put better stress on Kellogg to fulfill employee calls for, Browning argued, the sudden drop off in gross sales may have pushed Kellogg to go for a fast repair. The corporate laid off 1,400 of its putting staff.

Whereas conservative boycotts of Bud Mild and Target noticed each falter in gross sales, Bud Mild father or mother Anheuser-Busch InBev grew revenue final quarter after elevating costs. Goal has stumbled dramatically, however that’s seemingly attributable to folks chopping again on discretionary merchandise, of which Goal gives lots, not boycotts, Neil Saunders, managing director of GlobalData, instructed Fortune.

And there’s extra dangerous information for irritating shoppers, Saunders mentioned: Costs aren’t coming down anytime quickly. The Shopper Worth Index for closing demand rose 0.6% last month, a sign that inflation continues to be creeping up. The index for processed meals and feeds rose 0.3 p.c. Whereas costs aren’t coming down, inflation is stabilizing, which means patrons shouldn’t anticipate to see drastic worth hikes.

“Prices will still remain reasonably high, although I think we’re not going to see prices keep going up like they have done over the past couple of years,” Saunder mentioned. “That’s sort of behind us, including for Kellogg’s.”

At the same time as inflation ranges out, there’s different components impacting the worth of meals, tying Kellogg’s fingers relating to reducing costs.

“The cost of transportation has gone up; the cost of labor has gone up,” Saunders mentioned. “Kellogg’s has faced price increases for its own production, in the same way that other companies have faced price increases, and it’s passed some of those increases across to consumers.” 

Meals corporations are contending with labor shortages forcing them to extend wages—Chipotle mentioned they’ll increase the price of burritos after the passage of a California legislation elevating minimal wage to $20. Provide shortages, similar to for sugar and cocoa, will power worth will increase for Oreos and Ritz, and grocery shops could wish to nudge clients in the direction of their own cheaper private brands by holding identify model prices greater.

There’s nonetheless stress for Kellogg and different grocery conglomerates to maintain their costs in test, Saunders argues. Walmart and different low cost retailers are conscious of shoppers’ sensitivity to rising prices and can wish to maintain their reasonably priced reputations. However corporations are listening to volumes and gross sales numbers to set costs, not on-line noise.

“A lot of these boycotts are not based on rationality,” Saunders mentioned. “They’re very gut-based reactions to things, and I don’t think that the people asking for a boycott really want to have a debate with Kellogg’s about the nuance of pricing or whether cereal is good to have for dinner.”

However regardless of not being essentially the most environment friendly device for shoppers, there’s not a lot else they’ll do to make their voices heard, Browning mentioned. Selecting which merchandise to purchase and keep away from continues to be the patron’s better tremendous energy.

“We’re always choosing what we do and don’t want to buy, and I think we should definitely vote with our pocketbooks in that way,” he mentioned.

For Donley, a house baker and mother who feels passionately about the place her meals comes from, a boycott nonetheless has its noble sheen: “I support anybody who’s willing to stand up for what they believe in, especially when it affects the greater good.”