Here's my standard breakfast: a glass of orange juice, a cup of coffee and a sugar-coated chocolate cake doughnut. Hmm, good. I arrived at this combination after long experimentation. No problem with the orange juice and coffee, but before the chocolate cake doughnuts came Twinkies, Ho Hos, sugar-coated fruit pies and many other varieties of doughnuts. All are good, but the chocolate doughnuts are best. Trust me.
Well, those are my breakfast biases. You need to know them because our subject this week is cereals: specifically, the great war among cereal makers for the souls and stomachs of Americans. It's one of those fascinating business stories that illuminate our life styles, history and economy. But what really draws me to the story is something else. I am no bystander. I am the target. They are after me and my doughnut-eating ways.
I know this because I watch the network evening news. There are times when it's hard to tell what's going on in the world for all the cereal advertising. If only I eat enough of the right cereal, I'm told, I will live forever -- or almost. I need to get more fiber, more fruit and my daily recommended allowance of vitamins. By inference, doughnuts are out.
Is this advertising offensive? You bet it is. It's sexist and full of stereotypes. Men often emerge as ill-informed, hapless creatures who are blissfully killing themselves. They refuse to grow up. They are the kind of people who eat, say, chocolate cake doughnuts. One ad pictures a man and his wife playing doubles in a tennis game. The husband is moronic and useless. The ball bounces off his head, while his wife makes all the shots. He didn't eat the right cereal. This imagery is false and malicious. I can attest that the morning doughnut line has just as many women as men.
The cereal colossus, the Kellogg Co., is behind this onslaught. Last year Kellogg sold 42.6 percent of the industry's total of 2.26 billion pounds of cold cereal, according to analyst John C. Maxwell Jr. of the investment firm Furman Selz Mager Dietz & Birney. In 1984 Kellogg aired a carefully worded ad for its All-Bran cereal. "I just read about new reports from the National Cancer Institute," the man in the ad says. "Some studies suggest a high-fiber, low-fat diet may reduce the risk of some types of cancer."
That did it. After some internal debate, the U.S. Food and Drug Administration decided that Kellogg's ads were okay. (The agency, in fact, is now proposing rules to encourage food manufacturers to make general, truthful health claims.) The ads triggered an all-out assault on the adult cereal market. We Americans are great optimists. No one has yet devised a preventive for death, but we keep looking. Since 1984, the cereal industry's television advertising has grown by one-third. Kellogg has brought out six new brands aimed at adults. General Mills, the second-largest company with about 21 percent of the market, has added four. In the smaller hot-cereal market, General Mills is introducing new brands to challenge leader Quaker Oats.
The point of all this is clear. Cereal eating has traditionally been concentrated among the young and the old. Children 12 and under and adults 55 and over account for half of cereal consumption, but only 40 percent of the population. The cereal makers now want to increase their penetration among everyone else, particularly aging members of the baby boom. That's simple enough.
But two other less obvious aspects of this story are equally intriguing. One is breakfast's durability. You might have thought (as I did) that it's being obliterated by two-earner families and a too-busy-to-sit-still attitude. Wrong. Of course, breakfast used to be bigger and more relaxed. More moms were around to do the work. As late as 1947, Americans ate more hot cereal than cold. Eggs and bacon are now past their prime.
But breakfast survives. Only about 4 percent of us skip it, reports the Menu Census, a survey of eating habits done by MRCA Information Services. Roughly four-fifths of breakfasts are eaten at home; 57 percent of us eat there exclusively and 34 percent of us bounce between home and restaurants. This proportion is creeping up. Still, about 70 percent of us have one main dish each morning -- cereal about half the time, eggs a quarter of the time.
History is the other intriguing sidelight: cereals are returning to their 19th-century origins as a health food. Dr. John H. Kellogg was a health reformer who ran a sanitarium in Battle Creek, Mich. Like most reformers, he attributed a lot of sickness and indigestion to too much drink, too much meat and harmful condiments -- vinegar, mustard, pepper and even salt. The average American, Kellogg believed, "treated ... his stomach like a garbage-box." Poor diets, he once wrote to an audience of women, explain why "you are so afflicted with general good-for-nothingness."
Kellogg and his brother, William Keith (W.K.), invented wheat flakes in 1894 to add variety to the diet of patients at the sanitarium. One of those patients, Charles W. Post, became the first cereal tycoon, introducing his Grape Nuts in 1898. In the first decade of the 20th century, dozens of cereal companies started in Battle Creek, the Silicon Valley of its day. Most new companies didn't survive, but W.K. Kellogg's company, founded in 1906, did.
The industry that Post and Kellogg brought forth is immensely profitable. Indeed, some economists argue that it has monopoly power. The top six firms control 96 percent of the market. The staff of the Federal Trade Commission brought an antitrust case in 1972, but an administrative law judge overruled the staff and the case was then allowed to lapse. Whatever the truth, the industry has generally increased prices faster than inflation. The competition that does take place is centered on new brands. There are roughly 100 brands today, up from 26 in 1950. The proportion of sales devoted to advertising is far higher than most industries.
The industry's marketing juggernaut is now arrayed against me. The only weak link in my defense is my daughter, 2 1/2. She eats cereal, but when I eat at home, she's noticed those doughnuts. There are signs of rebellion, as in: "Daddee, I WANT some doughnuts." What to do? Abandon doughnuts, sacrificing pleasure but removing temptation? Give in, revealing myself to be as weak willed as I know I am? Or introduce her to hypocrisy? Yes, honey, I eat doughnuts, you eat cereal. Tough luck. Life is full of hard choices.