Kellogg shares drop as it struggles to woo Millennials: Credit Suisse

By Gill Hyslop contact

- Last updated on GMT

A large percentage of Millennials find cereal inconvenient as it needs to be cleaned up after eating. Pic: ©iStock/lolostock
A large percentage of Millennials find cereal inconvenient as it needs to be cleaned up after eating. Pic: ©iStock/lolostock
Credit Suisse has removed Kellogg from its US Focus List after downgrading the food stock to Neutral over concerns that growth at the Kellogg Company isn’t keeping up with peer

Credit Suisse demoted Kellogg from Outperform to Neutral with a price target of $77.00 (down from $84.00).

According to analyst Robert Moskow: “The company's revenue growth rate continued to under-punch its peers due to ongoing pressure in the breakfast cereal category (45% of sales) and company-specific problems in wholesome snacks (about 7% of sales).  

“The company took several positive steps to re-engage Millennial consumers with more granolas, mueslis, and 'fashion-forward' ingredients. But from what we can tell, these efforts have not fully stabilized the business,”​ he stated.

Earlier this year, a Mintel survey found nearly 40% of Millennials consider cereal inconvenient, because it needs to be cleaned up after eating.

The Breitbart backlash

Kellogg’s has been having a rough ride of late.

Supporters of the president-elect and Breitbart News, formerly run by Trump’s chief strategist Steve Bannon, vowed to boycott Kellogg products following its announcement to pull advertising from Breitbart.com

Kellogg spokeswoman Kris Charles said the decision was taken as the site was not aligned with the company’s values.

Breitbart News instantly responded by encouraging readers to #DumpKellogg’s, stating the cereal giant has openly declared hate for its 45,000,000 monthly conservative readers.

“Kellogg’s has shown its contempt for Breitbart’s 45 million readers and for the main street American values that they hold dear,”​ said Breitbart president and CEO, Larry Solov.

Kellogg’s is not the only company to feel the heat in denouncing Trump.

Online food delivery company GrubHub and PepsiCo also felt the threats of boycotts after comments made by the companies' respective CEOs about the election of Donald Trump.

The anti-Starbucks, pro-Donald Trump movement – known as the #TrumpCup – has gained impetus, too, after videos showing altercations between Starbucks employees and customers went viral.

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