No ill effects on sales despite Breitbart boycott: Kellogg CEO
Kellogg says it saw no “discernible” effect from an online boycott spurred by its decision to pull ads from a website formerly run by one of President Donald Trump’s top aides.
CEO John Bryant said it’s difficult to gauge the impact of such consumer actions given the volume of its sales, but that the company did not see any effect it could attribute to the boycott. Kellogg had announced its decision in late November to pull ads from Breitbart.com, which has been criticized for featuring racist, sexist and anti-Semitic content.
The website subsequently called for a boycott of the company.
At the time, Kellogg had said it works with media buying partners to ensure its ads don’t appear on sites that aren’t “aligned with our values.”
The company and others have said such ad placement can come about because of automated ad buying programs.
“We had no intention of getting into a political discussion,” Bryant said Thursday.
Paul Norman, president of Kellogg North America, also said Thursday that the company generally does not advertise on news sites because there is a chance an ad can end up next to a negative story.
For the final three months of 2016, Kellogg said its U.S. cereal sales were flat. The company has been dealing with slumping cereal sales for years as people reach for a variety of different breakfast options and the image of Special K, one of its biggest brands, has become outdated. Its effort to boost cereal’s image have included opening a cereal café in New York City.
To improve its financial performance, Kellogg has also been slashing costs and this week noted that it will end all direct delivery of products to supermarkets and big-box retailers. Instead, it will ship those products to warehouses before they move to retailers’ distribution centres — a system the company already uses for the majority of its products.
Kellogg says the move will free up money to invest in activities such as advertising that more directly help boost sales.
While domestic cereal sales were flat in the quarter, sales for the broader U.S. Morning Foods unit dipped as it discontinued some products, such as breakfast shakes. The company noted that the broader cereal category is expected to be flat to down 1 per cent in 2017.
Kellogg reported sales of $3.1 billion (all figures US) in the final three months of 2016, slightly better than expected revenue of $3.07 billion. The company reported a loss of $53 million, or 15 cents per share, as it booked charges for restructuring and deconsolidating its Venezuela business. Not including one-time items, it said it earned 92 cents per share.
Kellogg says a call for an online boycott of its products isn’t having an effect on its sales.