Milling & Baking News - March 1, 2016 - 12

Business X

Annie's organic breakfast cereals
- second time's a charm?
BOCA RATON, FLA. - Nine years
ago, Annie's took a swing at the cereal category and missed, discontinuing the product five years later after
missing its consumer target and failing to deliver on taste. Now, with a
new manager in place in Minneapolis-based General Mills, Inc., the company is stepping back up to the plate.
In a presentation Feb. 16 at
the Consumer Analyst Group of
New York meeting at the Boca
Raton Resort and Club, Jeff Harmening, executive vice-president
and chief operating officer of

Frosted Oat Flakes and Cocoa Bunnies. The cereals will debut in Whole
Foods Market stores in early April
and spread to other retailers nationally by mid-summer at a suggested
retail price of $3.99 to $4.99.
John Foraker, president of Annie's,
discussed the trials and tribulations
of the brand's journey in the cereal
category in a Feb. 16 blog posting.
"The products taste amazing and
are made with the bunny magic that
Annie's consumers trust, including
lots of whole grains and no artificial
anything," Mr. Foraker wrote. "I'm

U.S. Retail at General Mills, said the
time is right for Annie's to bring its
innovation to the cereal aisle.
"Increasing consumer interest in
natural and organic is driving highsingle-digit retail sales growth for
our Cascadian Farm cereal brand,
and we think the trusted Annie's
brand will resonate with that growing group of consumers," Mr. Harmening said. "This launch consists
of three great tasting varieties that
are all certified organic with no artificial flavors or colors and no highfructose corn syrup.
"We are so encouraged by the improvement we are seeing in the cereal category and by our early returns
on our 'Consumer First' investments.
As we look ahead we continue to believe that cereal will be a source for
growth for U.S. Retail as we prioritize driving more from the core with
renovation, innovation and investment in our brands."
The new cereals will be available
in three varieties: Berry Bunnies,

really proud of these products that
our teams in Berkeley (Calif.) and
Minneapolis have been working so
hard on for the last 12 months. These
cereals represent the very high level
of quality we've always wanted to
bring to this huge category, and now
with the incredible cereal product
development, organic and fair trade
sourcing, and manufacturing capabilities of General Mills behind us,
the dream is now coming true, and
we are getting after it! This launch is
a great example of how Annie's and
General Mills are better together."
In 2007, Annie's also launched
three flavors of cereal: Bunny Love,
Honey Bunnies and Cinna Bunnies.
While initial consumer interest was
strong, Mr. Foraker said the product failed to take off because Annie's
"missed the mark on the product and
consumer." The product was discontinued in 2012, but Mr. Foraker said
the attempt and fail was "one of the
best things that ever happened to Annie's." The company learned several

12 / March 1, 2016 XMilling & Baking News

important lessons, he said, including:
* Know your most important consumer targets: "Before we launched
cereal in 2007, we generally tested
with just our 'core' consumers and
we did a pretty good job nailing their
needs," Mr. Foraker wrote. "However, in this category there was another
big group we needed to talk with
as well, more mainstream consumers that we now refer to as 'prime
prospects.' Core consumers tend to
be more into organic and simple ingredients. In cereal, prime consumers cared about these, too, but with
a bigger emphasis on mainstream
taste while being more price sensitive. Since 2007, all of our new items
have been developed with a keen eye
on the similarities and dissimilarities of both groups.
We want products to appeal to and work for both,
and we meticulously manage our items and channel
strategies to accomplish
this objective. Big evolution in our sophistication
around our consumer targets."
* Good taste is not
enough; great taste is needed: "We need to be as good
or better tasting than the
mainstream category leaders," Mr. Foraker wrote.
"When we launched in
2007, we were small and
had limited manufacturing
choices, resulting in taste and texture
that was not quite where it needed
to be to win. Consumers liked the
product, but they didn't love it as
much as they needed to. In hindsight
we probably should have waited until we could have developed a better initial product before launching.
Knowing when not to launch is just
as important as knowing when to
pull the trigger."
* Learn quickly and fail faster:
"We made many changes to the initial items over the four years post the
2007 launch, and none really hit the
mark," Mr. Foraker wrote. "I now
understand what a huge suck of resources and attention that was for
the broader organization and holding on that long was a mistake. We
needed to be faster to make changes
when we saw mediocre results, and
we needed to exit faster in order to
re-allocate resources to flow into other opportunities. Innovate fast, and
if warranted, fail fast. Great learning
for any small business." MBN
bakingbusiness.com / world-grain.com

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