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Wednesday, April 4, 2012

No Longer Champion

Wheaties is on the ropes. So says a recent article in USA Today. "The Breakfast Of Champions" has seen its share of the cereal market fall from 6.5% of the cereal market in the 1960s to 0.5% of the market today. What happened? Wheaties had a strong brand and strong associations. For athletes, a true canonization of athletic achievement was to be featured on a box of Wheaties. How has this brand lost 4,000 sales per day in the past 3 years?

The failure of Wheaties was a failure to innovate. According to article, Wheaties "rested on their laurels" and lost its positioning stronghold. It wasn't healthy enough for the Fiber One crowd and not sugary enough for the Lucky Charms fans. It is in the "muddy middle" - a place where brands go to die. As product categories become more niche, brands that once owned a particular positioning in the marketplace are seeing that positioning being usurped by more tightly focused brands. Sure, at one time Wheaties was the "athletic" brand - its benefits were tightly weaved around energy and health. The brand even produced a popular phase, "I hope you ate your Wheaties this morning" when someone was planning for an especially difficult or tiring day.

But what has the linkage to athletes, energy, and a popular saying gotten Wheaties in the year 2012? A half of 1 percent of cereal sales. The fact of the matter is that Wheaties stopped innovating. It kept chugging along, satisfied to put the random World Series winner or Olympic champion on its box while healthier and more energizing cereal brands were being launched that chipped away at its core proposotion. What exactly does Wheaties stand for today? Well, if you asked 100 people, the same qualities would probably emerge - Wheaties is still the breakfast of champions and Wheaties is healthy and Wheaties may provide me energy. But if I am now in the store and compare Wheaties against other healthier cereals and other energy cereals, Wheaties loses. Its product no longer fulfills its brand promise. It stopped innovating. It stopped creating line extensions and brand messaging that evolved with the times. It just stopped. And now it is paying the price.

Wheaties is not the only example of this - Sears, JC Penneys, Wendy's are also experiencing similar situations to various extents. And there are some other major brands who, if they do not begin innovating soon are likely to suffer the same fate. We'll address them in a subsequent blog, but the message here is clear - if you do not continue to evolve your message and product line, your "championship" will be short lived.

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