What Kellogg’s Cornflakes Can Teach You About the 2020 Recession

This is a simple message but it’s probably the most important post you will see in 2020, if you haven’t seen it already. In the time of a recession, amidst a global pandemic, your very first instinct is to cut your expenses right away, cease advertising and hope somehow, this will all return back to normal.

There isn’t going to be a normal from this point. This is the new normal. We can try to predict the future but nobody is really quite sure how we will get through this, but we can look to the past.

It is long known that during the great depression, Kelloggs Cornflakes wasn’t the only cereal brand in town. It is also known that Kellogg’s Cornflakes were originally invented as an anaphrodisiac, as a treatment to masturbation, but that is story for another day! Kellogg’s Cornflakes had some tough competition, and it is well recognised today that if they had not invested in their advertising and marketing, they simply would not have succeeded through the great depression. They advertised at a loss at first, but they didn’t win the race by sprinting. They won it by out-frustrating and starving out their competition in the market.

Kellogg Continued Its Marketing During the Great Depression

Kelloggs recovery great depression aerial drone inspection surveyDuring the Great Depression, things were as bleak as they are right now. In fact, many are saying it will be worse than the Great Depression.

They’re predicting unemployment will get as high as 31% (it was 24% during that time) and there is no doubt many small businesses – restaurants, bars, retailers, even agencies – will not return.

But there were some companies then – and some today – that continued to market.

According to a New Yorker story that ran during the Great Recession, Kellogg won during the Great Depression, while everyone else (including their competitors) failed.

In the late nineteen-twenties, two companies – Kellogg and Post – dominated the market for packaged cereal. It was still a relatively new market: ready-to-eat cereal had been around for decades, but Americans didn’t see it as a real alternative to oatmeal or cream of wheat until the twenties. So, when the Depression hit, no one knew what would happen to consumer demand. Post did the predictable thing: it reined in expenses and cut back on advertising. But Kellogg doubled its ad budget, moved aggressively into radio advertising, and heavily pushed its new cereal, Rice Krispies. (Snap, Crackle, and Pop first appeared in the thirties.) By 1933, even as the economy cratered, Kellogg’s profits had risen almost thirty per cent and it had become what it remains today: the industry’s dominant player.

Change Your Approach, Cut Back, But Don’t Cut Out

I encourage you to tread carefully and seek affordable advertising. This is a long game, a long battle. And we must concentrate on the long-term strategies in order to succeed this.

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