Examining the Corporate Social Responsibility Claims of Kelloggs
Breakfast cereals are an integral part of the British diet, and a key sector of the grocery market in the UK. The breakfast cereals market is made up of two main sectors: the ready-to-eat (RTE) sector, the hot cereals sector. It is a market that is well established and has been dominated by three main companies — Kellogg, Weetabix and Cereal Partners (an alliance between Nestle and General Mills. ) (Keynote, 2011) Together these companies control two thirds of the UK’s cereal intake, which would appear to be ever increasing.
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This is a trend that would appear to be mirrored around the world as although there are no official statistics available for the worldwide consumption of breakfast cereals, Key Note estimates that, over the 5 years to 2010, the market continued to grow. [pic] Consumption of Breakfast Cereals and Oatmeal and Oatmeal Products in the UK (grams per person per week), 1974, 1990, 2000, 2007-2009 (Keynote, 2011) [pic] Figure 9. 1: Growth in the Total UK Breakfast Cereals Market by Value (? m at rsp), 2006-2015 (Keynote, 2011)
Kellogg Company of Great Britain Ltd is a wholly owned subsidiary of the US-based Kellogg Company of Michigan, and is the leading breakfast cereals manufacturer in the UK market. Kellogg mainly operates in the ready-to-eat (RTE) sector, and has a wide range of products. Kellogg’s worldwide was launched in 1906 in Battle Creek Michigan, after Dr. John Harvey Kellogg accidentally developed the first. Kellogg’s Corn Flakes.
It is a company that has always stated its dedication to being a leader in industry, innovation and marketing. Kellogg) CSR Kellogg’s claim that corporate responsibility has always been a vital part of their heritage, and that they have always had a strong commitment to nutrition, health and quality. They maintain their stance that the ever-greater social challenges, such as feeding a growing population, battling world hunger, improving nutrition and addressing the obesity epidemic have been historically—and will continue to be—key concerns for them, and the food industry as a whole.
In order to demonstrate their involvement and concern for these issues Kellogg has devised a strategy to identify their major corporate issues based on ‘a materiality analysis that defined the most important areas for both our company and our stakeholders’. (Kellogg) From this they then devised a CSR plan than concentrated and revolved around what they call their four pillar areas. These are concerned with marketplace, environment, workplace and community. Marketplace: Marketplace CSR focuses on health and nutrition, responsible marketing, consumer information, product quality and responsible sources.
Kelloggs can be said to be doing well in the aspect of health and nutrition, being one of the few cereal companies that have found a way to bring their products in line with the NPM (Nutrient Profiling Model) code. (Mintel, 2011) In fact, even in the past year they have undertaken some impressive initiatives including a 15% sugar reduction in one of their most popular branded cereals, and lowered sodium in several others.
They also: • Participated in the Healthy Weight Commitment Foundation (a coalition of 100+ food companies and other stakeholders), which pledged to collectively remove 1. trillion calories from members’ U. S. products by the end of 2015. • Joined with leading food and beverage manufacturers to develop a new front-of-package nutrition labeling system in the United States, supported through an industry-led multi-million-dollar consumer education campaign. Environment: Kellogg’s can be credited with making great and steady gains towards providing a ‘greener’ environment. In fact, within the past year they have made huge leaps towards their energy, greenhouse gas (GHG) and water goals.
They have also: They were among the first companies globally to submit water use data to Water Disclosure, a new global data repository. • Made sustainability commitments (together with other members of the Consumer Goods Forum) relating to carbon measurement, refrigeration, packaging and helping to achieve net-zero deforestation. • Expanded engagement with suppliers on issues relating to sustainable agriculture. • Made important packaging improvements, particularly in Snacks business. • Implemented a new environmental and safety management system at Kellogg sites globally. pic](Kellogg) Workplace: Despite winning several awards and featuring in many tables of the best places to work, Kelloggs is still committed to improving the conditions of its workplace.
The most impressive of improvements this year include the establishment of a ‘total health management’ program for all employees, as well a new leadership development program. These two initiatives show Kelloggs to be a company that cares not only about their employee’s physical wellbeing, but also to be a company that is involved in the training and development of their staff.
Other notable workplace schemes include the improved safety regulations and their dedication to diversity-related organizations. Community: • Donated $32 million in cash and products to charitable organizations worldwide. • Continued to donate food to food banks and programs around the world. • Contributed to breakfast programs that provided millions of morning meals to schoolchildren around the globe. • Supported a downtown revitalization project in their headquarters city of Battle Creek, Mich. • Provided cash and/or product donations to assist with disaster relief efforts in Japan, Haiti, Chile, Australia and other regions.
Diagnostics Kelloggs can be said to communicate with the consumer fairly heavily via its marketing and promotion. In fact, the general breakfast cereal market has a hefty weight of marketing support behind it. In 2010, total topline advertising spend remained at the ? 100 million mark (Mintel, 2011) with Kellogg’s remaining as the biggest investor in advertising. (Mintel, 2011) Kellogg’s continues to invest more on breakfast cereal advertising than any other company, accounting for 67% of the total ad spend in 2010.