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NEWS > BUSINESS > KELLOGG SHIFTS GEAR ON WAX FLAVOURED CEREAL, ISSUES RECALL
KELLOGG SHIFT GEARS ON WAX FLAVOURED CEREAL, ISSUES RECALL
June 27 2010
Battle Creek, MI – it has been said by mothers and doctors for decades that breakfast is the most important meal of the day. That common wisdom has had little medical evidence to back it up but nonetheless many have followed the adage 
religiously. Whether or not ordinary people have actually benefited from a healthy breakfast some people have made a killing. Companies like Kellogg and General Mills have built their fortunes on healthy breakfasts, feeding millions and sending children and adults all over the world off on the right foot every single morning.
Like any consumer product though breakfast regularly undergoes change. Major corporations walk a fine line between offering new products and sticking with people are used to buying. Sometimes change comes with great acclaim, other times it is met with disdain causing the company to backtrack, often costing them millions in sales and even more in public reputation. Coca-Cola learned that the very hard way in the 1980’s when the introduction of New Coke nearly sank the company. Sony nearly collapsed just a few years ago when the PlayStation 3 launched to underwhelming sales and general ridicule. Those companies bounced back however and the same thing seems likely to happen to Kellogg Company which just recently announced the recall of 28 million boxes of their new and controversial wax flavoured cereals.
“We apologize to our consumers and our customers and are working diligently to ensure that the affected products are rapidly removed from the marketplace. We received about 20 complaints with people reporting various side effects from the new cereal including nausea and vomiting,” said Adaire Putnam, a spokesperson for the company. “This smell is the result of the way in which the bags used to contain the cereal interacts with the material itself causing these violent reactions. While we anticipated some resistance to the new formula these concerns have made it clear that consumers have rejected this new formula and well will ensure that the cereals they have grown to love will be back on their breakfast tables as soon as possible.”
Kellogg shares dropped 44 cents on news of the recall to close at $52.42.
“Recalls are common place amongst the big manufacturers but the vast majority of the time they are a result of mistakes or unforeseen errors that cause problems when they are in the marketplace. Rarely do we see a case where a company has made a major change and then suddenly backtracked when it was met it disdain but it does happen,” said Scrape TV Business analyst Ken Green. “Coke is probably the best example of that type of action but it happens with other companies as well. The reason it is so rare is because they usually undergo very extensive product testing before releasing the product to the public but like mistakes sometimes things like this sneak through. In the end it’s just a part of the cost of doing business.”
In light of the recall competitor General Mills reportedly ditched plans for a new penny-flavoured Cheerios.
“Breakfast cereal is something that can be really dangerous to mess with. After all the bulk of the consumers are children who are usually very picky about what they eat and want little or no disruption to their routine. While this isn’t quite a rebellion, it could have been close and they were wise issuing the recall so quickly,” continued Green. “The last thing any parent wants is a fussy kid first thing in the morning and I’m sure that had they continued with this new waxy flavour they would have lost more than a few people to one of the competitors.”
Kellogg also stated that they would cease including actual jacks in Apple Jacks citing lack of interest.
William Ashford, Business Correspondent
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