Cereal Wars - Cereal Offenders | 4
I it's January nineteen fifty nine and executives at General Mills Headquarters in Minneapolis are gathering to hear from the man they hope will be able to jumpstart the company's cereal fortunes that man is the Dapper Gordon Johnson the account director from the Madison Avenue Advertising Agency D._F._S.. General Mills has been treading water for a decade. It's rapid growth in the thirties is now a distant memory. General Mills has an eighteen percent share of the market but it still behind post and has less than half of Kellogg's market share so just how how can the company move up from third place Johnson is confident. He has the answer cheerios tricks in cocoa puff so great products but they don't stand out look Kellogg's they got Tony The tiger and they sponsor Hannah Bog Peres huckleberry hound cartoon show what you got to understand is your customers. Aren't the parents sure they pick up the TAB but it's the kids who call the shots and they'll scream until their parents get the cereal they want and kids want the cereals with characters they love so we got to create those characters general general mills achieve his arms and just how do you plan to do that. Johnson is ready for that question. There's this animation studio in Hollywood and they've got some great characters that I think in rival anything Hanna Barbera does take a look at this pilot real the lights dim Johnson turns on the projected his friend supersonic rocket gainsborough bow on the screen the executives see a flying squirrel in an aviator helmet and his scatter brained loose companion running away from out of control fireworks. They're just the kind of Wacky duo kids go for the executive smile but the AD chief isn't so yet this will be expensive. I hear Kellogg's pays fifty thousand dollars episode for Huckleberry. Hound Johnson flashes smile. That's the best part the animator is Jay Ward. He's a bit of an oddball but he's broke so we got a very good price from his producers eighty five hundred dollars per half hour episode the Ad Chiefs Jaw Drops. Are you serious. That's the cost of a ninety second T._v.. Commercial and they really deliver on that budget absolutely they'll be working with an animation studio in Mexico that charges much less than any here in the states and like I said wards desperate the executives are thrilled. It seems like a perfect solution. A kid show with entertaining characters at our rock bottom price. The execs may think they're getting a great deal with Jay Ward but they're about to discover that this high strung animators got a subversive streak that will put him and general mills at loggerheads shipping and mailing from your desk has never been simpler than with Sunpro online from Pitney bowes with central online from Pitney bowes is just click sand and save for his lowest four ninety nine. That's four dollars ninety nine cents a month sent envelopes flats and packages right from I'm your desk and you are back to business in no time and for being a business wars listener you'll receive a free thirty day trial to get started and a free ten pounds scale to ensure that you never overpay starting at four ninety nine per month. You can also qualify for special U._S._P._S. rates for letters and priority mail shipping calculate exact postage online in print posters right there from your P._C.. Save Time and money on mailing and shipping with semi pro online go to P._B.. Dot Com Slash B._W._i.. You to access this special offer for a free thirty day trial plus a free ten pounds scale to get started. That's P._B.. Dot Com Slash V._W.. Experience Shipping made simple with a free trial of sent pro online from Pitney Bowes from wondering I'm David Brown and this is business <music> on the last episode post kept ahead of General Mills by drenching it cereals in sugar. Meanwhile Kellogg's got an assist from Tony The tiger to cement its dominance of the market Kellogg's cartoon Tiger made clear that when it comes to cereal kids are now in the driver's seat and parents merely their chauffeur's so now general mills is looking to create its own army of animated characters to take take on Tony and his pals starting with a cheeky squirrel in a dimwitted Moose. This is episode for cereal offenders. It's April nineteen fifty-nine nine and animator. Jay Ward is sitting in the bar of the elegant Roosevelt Hotel in Hollywood with his business partner Bill Scott the Pudgy pair are waiting to meet Gordon Johnson from General Mills Ad Agency D._F._S.. But Johnson's late really late to kill time ward is lobbying jelly beans up into the air and trying to catch them in his mouth he flips green wind up above his head and lunges sideways to catch it and misses the Jelly Bean bounces off his spectacles and lands in his glass of Cola Darn. He's about to make another attempt when Scott elbows him in the ribs. Johnson is heading toward their table. Sorry sorry for the weight. I can't believe how long it takes to get a limousine at the airport. Scott raises an eyebrow. A cab might have been quicker. Johnson gives Scott looked at says. I don't take cabs despite the Awkward Awkward Start Ward and Scott are teen to hear what Johnson's got to say they know General Mills has purchase rocky and Bull Winco but they're short on the details. Johnson fills them in so hot off the presses is general mills has used its leverage as big advertiser to get A._B._C. to take the show ward and Scott Smile. Their cartoons going to be a network TV. There's a catch A._B._C.. Needs the show. Joe On air this fall okay. We're does the Matt Twenty six five minute episodes in six months. It's tight but each episode's five minutes so Johnson Butts in new the deals for twenty six half hour episodes but but our budget is only eighty five hundred dollars an episode. That's why the Mexicans are helping you out also so we need scripts in advance to make sure the show suitable for kids word looks distressed but but rocky bogue Lincoln aren't just for Kids Really General Mills bought a kids ads cartoon figure it out anyhow I have to get to my next meeting Nice meeting you both as Johnson leaves ward turns to Scott. I'm not making it just for kids. I don't care what general mill says as word and Scott scrambled to meet their deadline back in Manhattan. D._F._S. is about to crack another cartoon challenge. It's a Monday morning in May nineteen fifty nine and D._F._S.. Illustrator Joe Harris arrives for work in a buoyant mood for weeks. The agency's creatives have been trying to develop an animated character for general mills fruity puffed cereal tricks. Now Harris thinks he's got the solution so he heads straight to the office of Creative Director Chet Stover sketchbook in hand. Hey boss. I think I've got just what tricks needs. Harris opens his sketchbook to reveal a miserable looking rabbit Abbott with floppy ears. Stover is puzzled depressed rabbit no well yeah. This is the tricks rabbit you see. He hates carrots and loves tricks but every time he gets his paws on a box of kid takes exit away and tells him he's a silly rabbit. You know like Wiley Coyote. He never gets what he wants. Stover starting to like this bunny an so what's the line that'll sell the serial tricks are for kids a few months on slater. The tricks rabbit makes his debut. I have a problem I'm a rabbit and rabbits supposed to love carrots but what I love is tricks. I got enough for breakfast and lunch and supper and even after school. If I went to school really rabid tricks kids. That silly rabbit changes everything for tricks now after years a years of lackluster sales children can't get enough of the fruity rainbow colored corn puffs. Meanwhile back in Hollywood. Jay Ward is cranking out episodes of rocky and his friends on a shoestring budget in a tight deadline but the scripts he's delivering are making general mills executives nervous. They were expecting a simple kids show but instead wards given them a bunch of goofy characters designed designed entertain kids and grown-ups. Thanks to their quick wit and slide jabs at Authority figures soon ward in general mills are squabbling over the scripts. Eventually they strike a compromise ward agrees not ought to make fun of any army generals and key figures from American history but most of his lighthearted sometimes snarky satire survives and in November nineteen fifty nine general mills latest animated cereal cheerleaders rocky and bull winco burst onto the nation's screens and now here's the greater figure ooh cocoa box energy. Eh Chocolate you you you'll get the ideal rocky and his friends ends is a ratings hit and gives general mills powerful platform to promote it cereals but the company's troubles with ward aren't over yet. It's early nineteen sixty and Gordon Johnson is sitting in D._F._S.'s Madison Avenue Office reading the latest rocky and bull winkle scripts and he is not happy the characters next adventure is called the box top robbery it lampoons the way general mills and other cereal makers entice entice kids to eat more of their products by offering cheap toys in exchange for cereal box tops wards not only biting the hand that feeds him. He's mocking General Mills Promotional Strategy Johnson is steamed. He picks up the phone calls ward. What the hell are you thinking? You'll making fun of the people paying the bills but word refuses to budge and to Johnson surprise is General Mills approves the story in April nineteen sixty the box top robbery airs well as we all know no real basis for our world economy is not gold now nuts over how many thought solid everlasting rock rip security box top hits another rating smash moving general mills another inch closer her to overtaking post and then one of the company's vice presidents hits on an idea that will put even more pressure on post. It's nineteen sixty two and John on Halloween is in the kitchen of his Minneapolis home and he's feeling experimental. He's eating some brock's marshmallows. When a wild idea POPs into his head he drops a handful of the Pale Orange peanut-shaped peanut-shaped marshmallows on his kitchen table grabs a pair of scissors and starts cutting them into pieces fills a bowl with cheerios and pours milk over them then he sprinkles the marshmallow pieces on top in the moment he tries his first spoonful? He knows he's onto something but putting marshmallows in cereal boxes isn't an option the moisture in the marshmallows would reduce the serial shelf lives so Cahan puts general mills food scientists on the case they mix gelatin corn syrup sugar and colorings together to create a glue p substance that they pushed through molds to form shapes. They still need to figure out how to eliminate the moisture. The solution comes from NASA. That's right the space folks. NASA has been making food for its astronauts using a process called freeze drying which removes moisture while keeping the food intact in one thousand nine hundred sixty three with help from this space age process general mills delivers an unlikely cereal called lucky charms and it's animated mascot lucky. The LEPRECHAUN stars homers magic post also sees potential and freeze drying and they're looking to use it to try and deliver a knockout blow to the biggest selling cereal of all Kelloggs cornflakes post knows adults have been adding fresh fruit to their morning flakes for years so why not say them the hassle by putting freeze dried fruit inside cornflake boxes. This is the incredible freeze drying process. Let you give your family real fruit white inside a box of cereal. Everybody's rather have cereal with without just don't get it often enough so posted vetted cornflakes and strawberries blueberries and features Syria with fruit every time a better breakfast. The cornflakes war is all alarmed at posts new attack Kellogg's executives gathering the conference room of its headquarters in Battle Creek to plan a counter strike the head of marketing assesses the threat we've interviewed consumers and they loved the idea of cornflakes cornflakes with fruit. Despite the higher price they'd be willing to switch from our cornflakes two posts just for the fruit. This is a threat to our whole business kelloggs cornflakes might seem basic but in nineteen sixty three they account for twelve L. percent of all cereal sales Kellogg ships five million boxes of the stuff every day. It's the bedrock of the company's empire and that's why these executives will try anything to torpedo posts. The fruity flakes even unappetizing things Kellogg's food chief suggests they fight fruit with fruit will create a fruit and flake cereal of our own bananas are the most popular fruit let's put freeze dried slices of banana in cornflakes the executives perk up that could work but they're so focused on outflanking post they don't consider the taste factor but customers do when and Kelloggs cornflakes with instant bananas makes its debut in nineteen sixty five cereal munchers discovered that the tasty fruit slices promised on the box or closer to banana flavored driftwood within a year their products off the market but posts fruit and flake cereals aren't doing much better despite strong early sales people soon tire picking gooey freeze dried strawberries from their teeth and go back to standard-issue flakes the misfire leaves posts nursing a multi-million dollar loss on its investment and freeze drying technology and then post compounds. It's mistake retailers and consumers have been complaining about oversized sized cereal packaging so post introduces smaller boxes that contain the same amount of cereal as their competitors but when shoppers see posts shrunken boxes next to general mills and Kellogg's supersized packaging. They assume they're getting being less cereal for their money by the time post inflates. It's boxes again. The damage is done. The packaging disaster costs post four percent of the market allowing general neural mills to pull ahead to become the country's second biggest cereal maker now at long last general mills is ready to take on market leader Kellogg's but just as has general mills gears up to go hunting Tony The tiger the public pitches the entire industry occur ball cereal company profits have been on a sugar high for two decades but they're about to suffer her sugar crash. Business wars is brought to you by chase so you're ready to buy your first home congrats now. 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At checkout this is an incredible deal fifty percent off the regular price for a made-to-measure premium suit plus shipping is free. That's Indochino Dot Com Promo Code V._W.. For any premium suit for just three hundred sixty nine dollars is plus free shipping. It's July nineteen seventy seventy and on Capitol Hill a forty five year old with Elvis sideburns his testifying before a Senate committee. He's Robert showed up the civil engineer turn nutrition advocate and he intends to bring this serial giants chance to their needs Tony. The tiger is gird great big fraud wheaties is the breakfast of chumps not champions. I've studied the top sixty breakfast cereals Yeltsin. Two thirds are almost devoid of any nutritional merit Shoda pulls a list from his pocket and starts naming. Some of the serial offenders kelloggs cornflakes general. Oh Mills Kicks quaker Oats Cap'n crunch posts great nuts next he plays senators a compilation of cereal commercials packed with Lovable Cartoon Characters Napa happy down. You gotTa have practical the clock not well. You need new Kellogg Jack for breakfast. Suga cringe sugar the Chris Sugar Cream chocolate after the montage Chou to resumes his attack as you can see our children are being programmed to demand sugar. Most Americans are nutritional illiterates and that makes them an easy mark for those eager to conceal the nutritional worth of their products. We need nutritional labelling on cereals until today few people at ever heard of showed up but now he's all over the news his attack on the breakfasts. It's a millions divide the nation to some. He's a crusader for their health fighting the war against empty calories to others. He's a meddlesome snob but either way he's got the serial. Business is on the defensive a few weeks later Kellogg's sends Harvard Nutrition Professor Dr Frederick Stare to Washington as the senators listen the bespectacled academic tears into photo. Troja is a civil engineer not a nutritionist he ignores the calories and protein in breakfast cereals. He also ignores how ninety five percent of cereal is consumed with milk but pointing out the flaws in showed US analysis does little to stop the growing number of Americans who are now questioning. What's in their breakfast bowl among them are the hippies in California who are now turning to Granola in the belief that it's a healthy natural alternative to mainstream cereals? It's been eighty years since Dr. John Harvey Kellogg created Granola in his sanitarium since then his ground wheat bread cereal had been forgotten by all except a few seventh day adventists who kept on crunching the rock solid crumbs through the generations but in nineteen sixty four Nashville Baker Layton Gentry Change James the recipe he replaced with rolled oats and added brown sugar sesame seeds and shredded coconut. The result was crumbly cereal that didn't threaten to break teeth gentry sold the rights to entrepreneurial seventh seventh day adventists who started producing his granola justice health food stores began popping up all over the golden state by the time showed his confronting the serial giants the new GRANOLA has become a cult hit with the flower or power crowd but Granola won't be staying underground for long. It's summer nineteen seventy-one and former General Mills Marketing Executive Jim Matson is is in downtown Saint Louis. He just moved here to join food manufacturer pet inc.. He's exploring his new home city when he spots something surprising a health food store. He didn't think they existed outside California thinking it might be a sign that the hippie food fat is going mainstream. He goes inside. Perhaps he'll spot a new product idea ahead of trend as the fragrance smell of incense. It's fills his nostrils Matson scans the shelves sea salt no rice flour to obscure we germ forget it but then he sees the cellophane bags of Granola on the serial shelf now that he thinks has got potential over the next year he and pets new products team prepared Granola for glory to give it mass appeal they make their Granola chunky and they also ditch the seeds in order to stand out in stores full of primary colored cereal boxes. They put their Granola in a C._p._A.. Box locks that looks like it came right out of nineteenth century general store to reinforce its rustic image they name it heartland natural cereal when it hits supermarket shelves in Fall Nineteen. seventy-two heartland is touted as an all natural breakfast within six months heartland captures more than two percent of the six hundred fifty million dollar U._S. cereal market it also sparks a breakfast revolution by December. All the big cereal makers are making Granola in practically no time these seemingly healthier cereals have swallowed up ten percent of the market but just like their sugar loaded kids these GRANOLA munching adults are being bamboozled. 'CAUSE IT turns out GRANOLA contains almost as much sugar as the candied flakes in their kids breakfast bowls but the public demand for more nutritious breakfast is only getting started as the nineteen eighties approach the hunger for good for you cereal only increases and that's going to play right right into general mills hands on the next episode cereal goes to the movies Kellogg's in general mills wrestle for the dollars of health conscious consumers and the supermarkets declare war on the serial giants from wondering this is business wars. We hope you enjoyed this episode and we invite you to subscribe on Apple podcasts. Google podcasts podcasts spotify stitcher IHEART radio. Wherever you get your podcasts go find a link on the episode notes you can tap or swipe over the cover art and you'll find some offers from our sponsors? We hope you'll support our show by supporting them. If you like what you've heard tele friend and tell them how to subscribe while you're at it and we would love it if you could give us a five star rating there's another way you can support business wars and that's by answering short survey at one dot com slash survey while you're there. Don't forget to tell us what business were stories. You'd like to hear quick note about the conversations. You've been hearing in this episode. We can't know exactly what was said but the dialogue is based on our best research. I'm your host. David Brown tristen Donovan wrote this story Karen. Low is our senior producer in editor.