Pilnick touted a marketing campaign that his company launched urging people to give “chicken the night off” and instead consume bowls of Frosted Flakes and Frosted Mini-Wheats. Those advertisements don’t make the explicit pitch for cereal as a cost-saving move, instead showing it as a fun way to shake up a family’s dinner-table routine. But Pilnick brought it up when CNBC host Carl Quintanilla questioned him about rising prices at the grocery store.
“The cereal category has always been quite affordable, and it tends to be a great destination when consumers are under pressure,” Pilnick said. “If you think about the cost of cereal for a family versus what they might otherwise do, that’s going to be much more affordable.”
When Quintanilla pressed him, questioning whether that kind of a pitch might “land the wrong way,” Pilnick doubled down. “We don’t think so,” he replied. “In fact, it’s landing really well right now, Carl.”
Clips of the interview started popping up on social media, including on a subreddit called /NotTheOnion where people share real news that sounds like it could have come from the satirical website the Onion. On Reddit, some people complained about the cost of cereal, corporate profits and “shrinkflation” — where the amount of food in a package is reduced, but the price stays the same — while others noted that the sugary breakfast food isn’t actually a good substitute for a nutritious meal.
One user summed up the mood with an age-old rallying cry, “Eat the rich.”
“Hey, um, what stage of capitalism is this?” TikToker Julie (@hoolie_r) asked in a video that has been watched more than 2.4 million times.
Some critics questioned whether the CEO, whose total compensation last year was $4.9 million — and that was before his promotion to the top job — was following his own company’s suggestion. “I wonder what cereal he and his family are eating for dinner?” one user posted on X.
The anger was similar to the outrage that followed viral reports of eye-popping prices for Big Macs, with tabs for combo meals as high as $18. People have also been posting images of their grocery hauls to show rising prices — and one TikToker illustrated the inflationary trends by posting a video showing how the $20 grocery trip depicted in the 1990 movie “Home Alone” would now cost nearly three times more. Even rapper Cardi B has been complaining about how much more she’s paying for lettuce these days.
The supermarket sticker shock that people are feeling is real. Prices in the category have outpaced inflation, surging 26 percent over the past four years. And they’re likely to stay elevated — food prices, once raised, rarely come down. The cost of cereal and bakery products has jumped more than 27 percent since the start of the coronavirus pandemic, government data shows.
While some of the increase is tied to ingredient costs, industry experts say fuel, labor and packaging are the biggest drivers of rising prices in the snack and cereal aisles. But Americans are still buying, leaving little incentive for snack conglomerates to lower prices.
Companies like Kellogg, which spun off from its parent company last year and now goes by Kellanova, have an easier time getting away with this because consumers are “quite category loyal,” said Neil Saunders, the managing director of the analytics company GlobalData. “It’s like a treat and an indulgence,” he added. “If prices go up by a bit, the consumer doesn’t really change habits. So it’s sort of given permission for manufacturers to pass across some of that increase a little bit more.”
