PepsiCo to revitalize its oatmeal business

Aug. 4, 2010

A decade after its $13.8 billion purchase of Quaker Oats, PepsiCo is cooking up a major push for its oatmeal business, which has gotten a bit soggy, reports The Wall Street Journal.  Quaker dominates the oatmeal category with a 58 percent market share of hot cereal, according to Mintel.

A decade after its $13.8 billion purchase of Quaker Oats, PepsiCo is cooking up a major push for its oatmeal business, which has gotten a bit soggy, reports The Wall Street Journal.  Quaker dominates the oatmeal category with a 58 percent market share of hot cereal, according to Mintel. It enjoys sales of $212.2 million, followed by private label ( $103.7 million), Cream of Wheat ($27.2 million), Quaker Weight Control ($14.5 million) and Bob's Red Mill with sales of $6.4 million, according to Symphony IRI.

Only 40 percent of Americans eat breakfast and pressure from store brands has eaten into profits. In response, PepsiCo is investing more money into Quaker's North America business, which accounts for nearly $2 billion a year in sales, or 4 percent of the food-and-beverage giant's total. Its goal is to get more people to eat a morning meal and to make it Quaker oatmeal, pitching the cereal as healthy, tasty and a good value.

PepsiCo also plans to reach out to schools and nutritionists on the attributes of oatmeal. And it plans to launch a line called Quaker Mix-Up Creations, designed to let children combine different flavors into their oatmeal. Quaker is improving the texture of its instant oatmeal and reducing the salt and sugar and will introduce a new multigrain oatmeal aimed at adults.

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