Industry Leaders

Kellogg Company was the leader among national cereal makers with 2002 sales revenue of $8.3 billion. Established in 1906, Kellogg Company was the world's market leader in ready-to-eat cereals throughout most of the twentieth century. In 1998, Kellogg had 45 percent of the world market share for cereal. Canada, the United Kingdom, and Australia represented Kellogg's three largest overseas markets. Based on sales, Kellogg's cereals hold eight of the top ten spots on the "Top Cereal Brands in Great Britain" list, according to Business Rankings Annual 1999.

A few well-known Kellogg products were Corn Flakes, Frosted Mini-Wheats, Corn Pops, and Fruit Loops. In addition to its ready-to-eat cereal division, Kellogg also operated Mrs. Smith's Frozen Foods. The Mrs. Smith's division manufactured Eggo waffles and frozen pies. In 1996 Kellogg purchased Lenders Bagels for $466 million from Kraft Foods Inc. However, Kellogg's sold the under-performing line to Aurora Foods Inc. in September 1999 for $275 million. Attempting to appeal to changing consumer tastes, Kellogg's launched the K-Sentials line in 1999 and Snack-a-longs, a "carry pack that includes a package of either Fruit Loops or Corn Pops, a sip-carton of Minute Maid fruit punch, a Nutri-Grain bar, a napkin, and a finger puppet." Originally, Snack-a-longs were positioned in the breakfast aisle near the cereals, but they did not sell very well. According to Progressive Grocer, Kellogg's found through test marketing that "most people were buying Snack-a-longs for a snack after breakfast. When Kellogg's moved the product into the deli section, sales took off."

Close behind Kellogg, General Mills, with 2002 sales revenue of $7.9 billion, was the second largest cereal manufacturer. Big G cereals included flaked products such as Total, Raisin Bran, and Country Corn Flakes, as well as puffed varieties such as Kix, Trix, and Cocoa Puffs. In May 1999 General Mills introduced Sunrise, the first-ever certified organic cereal from a major manufacturer. The company's consumer foods division included its line of Big G cereals, Gold Medal Flour, Betty Crocker mixes, and Hamburger Helper. Outside its consumer foods division, the company also owned the Red Lobster and Olive Garden Restaurants. The restaurants accounted for approximately one-third of General Mills' total revenues.

Another leading cereal maker was Quaker Food and Beverage (formerly Quaker Oats Company), which became a subsidiary of Pepsico in 2001. The company's first puffed product, "Puffed Rice," was introduced in 1905. In 1992, Quaker Oats held an 8.9 percent share of the ready-to-eat cereal market, and its principal product was Cap'n Crunch. Within the smaller hot cereal segment, however, the company held approximately 60 percent of the market. In addition to cereal products, Quaker Oats produced Aunt Jemima Pancake mix and Gatorade sports drinks.