America and the World

Kellogg was the first American company to enter the foreign market for ready-to-eat cereals. In 1914 the company began distribution in Ontario, Canada, and ten years later it began operations in Australia. Kellogg opened its first plant in England in 1938 and began operations on the European continent in the 1950s. By the early 1990s, Kellogg distributed its products to 150 nations and in some of these markets held a market share as large as 80 percent.

English-speaking nations represented the largest cereal markets. Consumption in non-English markets was estimated at only one-fourth the amount consumed by English speakers. For example, during the early 1990s per capita consumption of ready-to-eat cereal in England was 13.3 pounds per person, but in France it was only 1.8 pounds. On the European continent, consumption averaged 3.0 pounds per year. Shifting attention away from traditional breakfasts and focusing interest on low-cholesterol, convenient snack alternatives, cereal makers viewed low per capita consumption areas as potential growth fields. In Spain sales were growing at a rate of 20 percent per year; in Portugal they were growing at an annual rate of 50 percent. Some industry forecasters estimated that by the year 2000 the European cereal market would experience more than a four-fold increase and reach $6.5 billion.

General Mills was also active in expanding overseas operations. In Europe, General Mills and Nestle formed a joint venture called Cereal Partners Worldwide (CPW). In 1992, CPW claimed a 15 percent share of the United Kingdom market and planned an aggressive expansion campaign on the European continent. CPW also planned to enter the Mexican market and expand into Malaysia, Thailand, the Philippines, Singapore, Indonesia, and Brunei.