Cheerios Battles FDA on Ad Campaign Claims

With Cheerios, Has FDA Bitten Off More Than It Could Chew?

Changing Ad Claims Would Cost General Mills Millions, but Experts Say FDA Is Attacking a Consumer Favorite

By Emily Bryson York and Rich Thomaselli - Ad Age

Published: May 13, 2009

CHICAGO (AdAge.com) -- The Food and Drug Administration is going after a claim that has been the center of Cheerios' marketing campaign for two years -- and backed with tens of millions of dollars in spending -- but in the end, it could be the FDA that loses.

Depending on its discussions with the FDA, General Mills may have to change packaging.

The agency warned General Mills of "serious violations" arising from Cheerios' cholesterol-reduction claims. In its letter to General Mills last week, the FDA pointed to the claim that eating Cheerios can lower cholesterol 4% in six weeks. The FDA's stance might not only have immediate financial and marketing implications for General Mills, but could also result in a ripple effect for other marketers mulling specific health claims.

Big G wouldn't discuss the letter beyond a statement that indicates it will fight. "The scientific body of evidence supporting the heart health claim was the basis for FDA's approval of the heart health claim, and the clinical study supporting Cheerios' cholesterol-lowering benefit is very strong," Mr. Forsythe said. "We look forward to discussing this with FDA and to reaching a resolution."

But so far, public sentiment is on the cereal's side. Cheerios is one of the most beloved brands in the entire food industry -- and among the most trusted. Noted one health-care ad executive: "They're messing with a brand that parents put on their kids' high chairs."

'FDA got it wrong'
"It think the FDA got it wrong on this one," supermarket expert Phil Lempert said. He pointed to the inevitable chest pounding associated with a new administration and FDA leadership. "To go after a major brand like Cheerios is [for] headlines that say to everybody 'We're doing our job,'" Mr. Lempert said.

The company is currently working with the FDA to assess what changes need to be made to packaging. However, it's too soon to determine what those changes will be. Mr. Lempert said any changes are likely to cost General Mills "millions and million of dollars." Packaging is, of course, the most expensive component of most food products, and redesigns are expensive, even if product doesn't have to be pulled from shelves. It's also likely the ads would have to be retooled should the FDA prevail, though it's possible only the 4% figure could be fudged in the campaign. General Mills' agencies include Saatchi & Saatchi, New York, and Campbell Mithun, Minneapolis.

Even if the company is forced to scrap the claim, Lynn Dornblaser, director of consumer package goods insight at Mintel, a global consumer, market and product research firm, said it's not like consumers will change their minds about Cheerios or forget the messages they've seen in recent years. "They've gotten the message out already," she said. "The specific language has done what it needs to do." After all, Ms. Dornblaser noted, such an FDA complaint is not going to convince consumers that whole grains are bad for them. And changes to packaging, including specific health claims, may capture consumer interest for awhile, but after that, Ms. Dornblaser said, "it becomes wallpaper."

King of the cereal aisle
Indeed, Cheerios brands rule the cereal aisle. According to Information Resources Inc., a Chicago-based market-research firm, the yellow-box classic rang up $323 million in grocery sales for the 52 weeks ended April 19. It's now running behind Honey Nut Cheerios, with $332 million. All told, sales for the Cheerios franchise, including Honey Nut, Multigrain and fruit-flavored Cheerios, totaled $695 million over the same period. IRI data does not include Wal-Mart or club stores.

This splashscreen appeared on Cheerios.com.

General Mills began making the 4% cholesterol-reduction claim associated with Cheerios two years ago. During that time, according to TNS Media Intelligence, the brand has spent about $89 million in measured media. Yellow-box Cheerios has grown share in recent years, but not considerably. According to IRI, Cheerios rang up $301 million in retail sales in 2004, with 4.75% of cereal sales, compared to 4.89% presently.

The FDA has appeared more active on the food front of late. In April, it announced that it had warned -- and promptly settled with -- Kellogg Frosted Mini-Wheats. The brand asserted in its marketing that the product enabled children to be 20% more attentive than those who hadn't eaten breakfast.

Bruce Silverglade, legal director of the Washington-based Center for Science in the Public Interest, said claims such as Cheerios' 4% message have been prohibited since 1993, as part of the Nutrition Labeling and Education Act. Now, he said, the new administration is sending a message that enforcement will be tougher. "They're signaling the rest of the industry that the agency is not going to let a big market leader get away with it and won't let anybody else get away, either," he said.

Dissent within FDA?
Still, it seems there is some dissent about this warning even inside the FDA. Peter Pitts, a former FDA associate commissioner, said he spoke to two senior FDA officials who said they had not seen the warning letter until it became public. The letter originated from the FDA's Minneapolis field office. "They did not know, they were upset and said this was a field office that was freelancing," said Mr. Pitts, now director-global health care, Porter Novelli. "That being said, what upset FDA most about this is it makes them look foolish."

In an e-mail, an agency spokeswoman said that FDA "warning letters speak for themselves," and declined to comment further.

PepsiCo Mexico Stuffs Cash into Chip Bags!

Tough-to-Swallow Snack Promotion Goes

Down Well

Mexico: Sabritas Cash

By Laurel Wentz

Published: April 06, 2009

NEW YORK (AdAge.com) -- Seeking a promotion that would appeal to recession-hit consumers, PepsiCo's Mexican subsidiary Sabritas decided to simply stuff cash into Doritos, Tostitos, Ruffles and other snack packaging.

It was a hit. During the promotion, which started in January, sales were up 18% by value and 20% by units, said Francisco Jimenez, Sabritas' marketing director.

In Mexican slang, lana means cash, so the promotion was dubbed "Sabrilana," or "Sabritas Cash." Almost $4 million in 20-, 50-, 100- and 1,000-peso bills was tucked into snack bags, Mr. Jimenez said.

The basic promise was that one of every two snack packages contained a prize. To remove the incentive for shoppers to simply forage for cash by tearing bags open in the store, and to keep the promotion affordable, the vast majority of packs contained a coupon for a free Sabritas product.

"Sabrilana was tailor-made to face a harsh first quarter, where the global crisis was going to hit the Mexican consumer hard," he said.

Within three weeks, 83% of consumers were aware of the promotion, and the coupon-redemption rate was over 40%, Mr. Jimenez said. The promotion also broadened Sabritas' appeal among older consumers.

To call attention to the promotion, snack bags were wrapped with a bright-blue strip that proclaimed "Cash! More than 47 million pesos in cash! Sabrilana." The company also did a TV, print and outdoor campaign. In the spots, featuring two popular Mexican comedians, one man shows the other a 20-peso bill he won in a Sabritas bag. The second man is amazed, and after some banter, a voice-over explains how the promotion works.

PepsiCo's Frito-Lay division said it recently introduced products from its Sabritas subsidiary in select U.S. Hispanic markets.

Defining 'Get It' When It Comes to U.S. Hispanic Marketing

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An Axis of Hispanic Advertising - The Big Tent - Advertising Age

Defining 'Get It' When It Comes to U.S. Hispanic Marketing
Where Do You Fall: Enlightened or Frightened? Trial or Denial?

Posted by Rochelle Newman-Carrasco on 04.06.09 @ 01:21 PM

Rochelle Newman-Carrasco Rochelle Newman-Carrasco
During the AHAA conference in Vegas this past week, there were several references to those who "get it." These references were either stated outright or implied. For example, right off the bat it was mentioned that the conference co-chairs, Grupo Gallegos' Ken Deutsch and Global Hue's Tracey Decker, were both non-Hispanic (an AHAA conference first). However, there was no doubt about their credibility, as their professional backgrounds have earned them great respect as U.S. Hispanic-marketing specialists.

Then there was an excellent panel featuring the 4A's Nancy Hill, the ANA's Bob Liodice and Adriana Eiriz of the CMO Council. Nancy Hill introduced herself with a comfortable level of bilingualism and shared some personal connections to both Mexico and Ecuador. It was her way of suggesting "I get it." She did not, however, just rely on that. She also spoke about her professional involvement with big agencies, small agencies, holding companies and independents: another "I get it" moment spoken from industry professional to industry professionals.

Bob Liodice acknowledged no ability to speak Spanish and refrained from doing so. In a way, it was also an "I get it" moment, suggesting in his tone and manner that he is well aware that our industry is tired of the uncomfortable and awkward moments when a non-Spanish speaker feels forced to say a few words in Spanish to a bilingual audience for no specific reason other than possibly to pander or brush off some high school memories. He gracefully spared us that. What he didn't say was that in the '80s as a brand manager at General Foods, he was an early adopter of U.S. Hispanic marketing practices in his business strategies. He also went on to join Televisa prior to joining the ANA. In other words, he, too, gets it. The clarity he exhibited during the panel quickly confirmed his level of awareness and interest in building the skill set of ANA members and creating a culture of CMOs that "get it" more often than they don't.

Keynote speaker Angel Martinez, CEO of Decker's Outdoor (home of Uggs and Teva), is of Cuban descent. He spoke of marketing as the rhetoric of business. His rhetorical skills were evident as he eloquently laid out the story of how his career in the shoe industry has informed his philosophies about branding and marketing. Nary a mention of U.S. Hispanic marketing in specific, but there didn't need to be. It was clear that we were being spoken to by someone who "gets it."

The second day included T-Mobile client Tim Switzer, who again, while non-Hispanic, clearly got it. He, too, made an "I get it" reference when he spoke about his past work with Nike and its lack of interest in marketing to Hispanics at a time when soccer was a brand priority. Following this, there was a compelling panel featuring Doug Darfield of Nielsen and Sterling Green, president of Spike DDB. This allowed for a different layer of "get it" to rise to the forefront. The panel addressed commonalities as well as tensions that exist between African-American agencies and U.S. Hispanic agencies, particularly as it relates to fighting over the "crumbs" (to quote Mr. Green) all too often allocated to support those initiatives falling under the convenient but questionable labels of diversity and multiculturalism.

Leaving Las Vegas, I was left wondering what makes the "get it" crowd so capable of accepting targeted marketing based on ethnicity and culture as a valid and important pursuit, vs. those who ignore it or, in some cases, are disdainful of both the marketing technique and of the consumers in question. Undoubtedly, much of what we talk about in conferences and here in the Big Tent becomes actionable when you're dealing with people who get it. Business obstacles are minimized when you're dealing with clients who get it.

Perhaps it's all about personal life experience and upbringing. Certainly that helps, but it can't be all there is. I have worked with many individuals for whom the U.S. Hispanic marketing arena is uncharted territory. Yet professionally they have been able to embrace the value and importance of this segmented marketing opportunity and act upon it. So I set out to classify the types of marketers I've known and see if I could find patterns that exist and qualities that distinguish the "get its" from the "never going to get its."

I drew an axis.

On one end of the horizontal I wrote "Enlightened." On the other end, "Frightened."

On one end of the vertical I wrote "Trial." On the other end, "Denial."

This created four quadrants. Two that "get it" and two that don't. Here's a description of each:

Enlightened and Trial: These are individuals or companies that understand all consumer behavior is influenced by culture and that have specific insight into the cultural nuances that define the U.S. Hispanic market, both collectively and in all of its various segmented forms. They are open to Hispanic marketing opportunities, so they embrace them on behalf of their brands, and they keep digging deeper. They are busy doing what marketers do: trying things. Creating initiatives that are well thought out, supporting them and activating them in order to generate desired or even unexpected results. Which sometimes they do and sometimes they don't, but that's not their sole measure of success. They're also measuring success by evaluating how their levels of enlightenment help to drive innovation and how their commitment to stay curious propels them to try new things.

Frightened and Trial: These are the individuals or companies that are, often justifiably, concerned about making mistakes or offending consumers. Perhaps they have heard horror stories about failed programs or poor agency partnerships. Nonetheless, they are willing to get over their fears and put possibilities in front of perfectionism. These are the brands that are trying to build their knowledge bases but don't get stuck in analysis paralysis. In my experience, their efforts to enter uncharted territory or to innovate in spite of their fears are often richly rewarded. This is the category into which I would say most early adopters fall. U.S. Hispanic marketing is full of many success stories from clients who started in or even currently exist in this quadrant.

Frightened and Denial: This category is tricky, because these clients/companies can often look like their Frightened/Trial counterparts. The difference is that they will never greenlight a program. They will, however, have their agency partners jump through hoop after hoop to bring them data and persuasive arguments that they say might change their positions. Nonetheless, their positions never change. No matter what is brought before them, they will not invest in this space. Their motives may range from professional lack of interest to personal objections that they are not willing to admit. Some, for example, are concerned that marketing to Hispanics will damage their brands vis-a-vis the non-Hispanic population, although they'll never tell you that. They live in fear and are often found keeping their heads in the sand.

Enlightened and Denial: Finally, there are those who know all the data, all the facts, and don't quarrel with them. They simply don't want to associate their brands with Spanish-speaking consumers for a variety of reasons, including a personal belief that English should be the official language of the U.S. Talk to them about bilingual consumers who are reached in English, and they'll reject the notion that these consumers are at all distinct from any other English-speaking consumer being targeted via existing methodologies. Whether you agree with them or not, they are at least straightforward and forthcoming in their approach. They won't waste your time like the Frightened/Denials will. They are simply not interested, and they will let you know that so you can save resources and move on.

I should add that not all non-participants in U.S. Hispanic marketing are in denial. There are those who choose not to allocate dollars toward the U.S. Hispanic market in any specifically targeted way, and do so purely based on sound business practices. Sometimes there are legitimate business reasons governed by the realities of a specific brand that make it impossible to allocate budget specifically toward a Hispanic marketing program. (I can't think of any, but I do know they exist.) If this is your situation, you owe it to yourself to make sure your decisions are not rooted in denial but rather in smart decisions driven by adequate analysis and discovery. The measure of whether you are in a Denial or Trial quadrant is if your willingness to address the U.S. Hispanic market would flourish if you were in charge of a different product or service line where the upside potential of the Hispanic marketing opportunity could not be called into question.

So, ask yourself: When it comes to U.S. Hispanic marketing, do you get it? Are you working with people who get it? Do you think there is anything to get? If you want to share, I'd love to hear what "getting it" means to you.