Randomly Noted

It’s been nearly a decade since Pepsico bought Quaker Oats. So, Dow Jones Newswires reporter Anjali Cordeiro decided to take a look back at how successful the acquisition has been. Her verdict – the oat cereal business for Pepsi has been soggy at best.

Part of what has hurt the business, she reports, is that during the recession, consumers went for lower costing brands. But also, the company has acknowledged that it has under-invested in the business.

I have a simple solution for Pepsi – buy the rights to the recipe for Post Fortified  Oak Flakes from Post Foods LLC, the company that is the latest iteration of original Postum Foods. Somewhere along the line, a decision was made to discontinue the Post Fortified Oat Flakes. In this bloggers view, that was a huge mistake. These oat flakes were the tastiest cereal ever made. And healthy at that. So, Pepsi, an easy way to get a hit back on your hands is to resurrect this wonderful, old cereal!

And apparently others feel the same way about Post Fortified Oat Flakes. It comes in number 9 in a survey of the top 100 all-time favorite cereals. Click here to see the other cereals on that list.

The recession gave a big boost to private-label brands peddled by retailers- cheaper breakfast cereals, soups and soft drinks (among other things) that taste the same as big-name brands.  The growth in sales is starting to slow: In the four weeks to May 16, “private label’s market share grew at an average 11%, a drop from the 21% growth those off-brand products saw at their peak around February,” DJN colleagues Anjali Cordeiro and Paul Ziobro report. Is this a sign consumers are feeling more confident and willing to buy pricier brands? Perhaps, but as happened following the economic downturn of the early 1990s, big-name brands will never recover the market share they had before the credit crisis. Fact is, when shoppers get used to store brands, they almost never leave them – even when their wallets and checking accounts fill up during an economic boom. Indeed, this is why consumer goods makers have been cutting prices recently in a scramble to keep shoppers coming back. Speaking of which, Anjali reports that Procter & Gamble will test a cheaper version of its iconic Tide detergent. “Tide Basic will cost roughly 20% less than the standard product,” she writes. What it won’t have is “the added fragrance technologies and other advanced technologies of the standard Tide.” Kroger Co. and Wal-Mart Stores Inc. will test the new product in 100 stories in the South. It will certainly be interesting to find out if shoppers detect a difference between premium-price and cheap Tide. If they don’t, I doubt P&G will let us know. Tide, P&G’s No. 1 North America brand, generates more than $3 billion in annual sales. Here’s Anjali’s piece:

http://online.wsj.com/article/SB124648188584882481.html