Wednesday, February 15, 2012

Pringles for Breakfast?

Everyone's familiar with the salty snack that, "Once you pop, you can’t stop." It was announced that Kellogg has decided to buy Pringles from Procter & Gamble for $2.7 billion. According to BBC News (2012), Pringles are sold in more than 140 countries and generate annual sales of $1.5 billion. It’s safe to say Kellogg will get its money back in two or so years.
 
Why the sale? Originally P&G wanted to sale Pringles to Diamond Foods but the deal never went through because Diamond had problems with its accounts. How I interpret this is that P&G has been trying to sale Pringles for a while. P&G is a billion dollar company but when you look at all the products it offers (Crest, Olay, Mr. Clean, etc.), Pringles doesn’t really fit in anywhere. Because Pringles is the only brand geared toward food, it makes sense for P&G to trim it off their business tree. One brand is hardly enough to justify the investments required for marketing to that particular niche.

Kellogg, a company most famous for its breakfast foods, will be adding a new niche–lunch snacks. I am very interested in seeing where this procurement will lead. Will Kellogg expand on its new marketing area? Or will it stay like it is: 37 different kinds of breakfast foods, and Pringles?

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