# GIS (General Mills) vs K (Kellogg)



## gibor365 (Apr 1, 2011)

I was looking to start position in one of 2 biggest cold cereal producers GIS (General Mills) and K (Kellogg)... Looks like that bought a little undervalued.... What is in your opinion better buy for long term?


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## kaleb0 (Apr 26, 2011)

I can't speak to the technicals of either company as I haven't looked at them. However, because you're asking about holding long-term, I would be cautious about anything in this space.. From an anecdotal / practical standpoint, I am bearish on any packaged/prepped food makers including cold cereals. These types of plays used to be 'consumer staples' and are still categorized as such but myself and many of my peers no longer eat cereal for breakfast and there is a growing movement away from pre-processed and canned food goods especially among millennials. This trend is already taking a bite out of the earnings of the likes of campbell's soup (news storey: Kicking the can: Campbell's hit by fresh food shift). I'm not saying this market will dry up, but I think it is ripe for some major disruption and will be hit by a big shift in societal norms.


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## gibor365 (Apr 1, 2011)

kaleb0 said:


> I can't speak to the technicals of either company as I haven't looked at them. However, because you're asking about holding long-term, I would be cautious about anything in this space.. From an anecdotal / practical standpoint, I am bearish on any packaged/prepped food makers including cold cereals. .


That what I kinda don't get... I can understand that people consume less MCD or KO, or Campbells.... but why cereal? This is healthy food! Even my family doctor suggested me to eat more cereal because I have high cholesterol and blood pressure....
So what you people eat?


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## Just a Guy (Mar 27, 2012)

Have you looked at the majority of cereals out there? The ones from the big companies, their main sellers are the sugar cereals marketed to kids...read the packages, if you can understand them, and you may find even their "adult" products leave a lot to be desired.

That being said, from the looks of the "average" waistline in this and the country to the south, I don't think these companies are going under any time soon. The "whole food" groups are just a vocal minority from what I've seen...parents today were raised on crap, and that's what they'll stuff into their kids.


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## fatcat (Nov 11, 2009)

Just a Guy said:


> Have you looked at the majority of cereals out there? The ones from the big companies, their main sellers are the sugar cereals marketed to kids...read the packages, if you can understand them, and you may find even their "adult" products leave a lot to be desired.
> 
> That being said, from the looks of the "average" waistline in this and the country to the south, I don't think these companies are going under any time soon. The "whole food" groups are just a vocal minority from what I've seen...parents today were raised on crap, and that's what they'll stuff into their kids.


right, 95% of those cereals are very simple carbohydrates that pop your blood sugar and leave you hungry an hour later ... they are over processed and sugared up and people know this and are moving away from the category (just as they are moving away from KO's carbonated sugar beverages which account for over 60% of their revenue) toward eggs or yogurt or steel cut oats and so on

both KO and GIS, just like MCD have real challenges ahead to try and pivot to a new product and new brand

this is a really interesting conundrum ... all three above companies are category leaders with established brands, research and marketing (and real estate) they all have stellar track records but need to reinvent their brands to continue to grow ... or convince people not to move to new food categories, something i think will be very hard to do as food choices from around the world proliferate and people get the chance to constantly try new things

GIS is probably more free to pivot since it sells a lot of brands in different food categories but KO and MCD are really pigeonholed by their main product line


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## moose (Nov 19, 2013)

gibor said:


> That what I kinda don't get... So what you people eat?


I heard that cereal sales for general mills were slumping as of late. And I too would like to know what people (kids, millennials, and the older folks) are eating for breakfast usually. 

Quickly, I would add that I have the impression that Kelloggs does nicely in the fit woman low calorie granola bar department


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## kaleb0 (Apr 26, 2011)

gibor said:


> So what you people eat?


I definitely wouldn't consider myself a whole-food nut, but most cold cereals have 2 big down-sides in my opinion; a) most have tonnes of sugar/additives and won't actually give you the type of lasting energy that more balanced alternatives offer and b) most would require one to pour milk on them. We don't even buy milk in my house, generally. We get dairy through some yogurts, cheeses, etc. We buy the odd small milk carton for cooking certain meals that require it.

As for breakfast, I generally go for either an egg sandwhich, or some fruit and some yogurt, or sometimes even some natto (it's an aquired taste from when I went to school in Japan, most other westerners can't stand it, but its really good for you! Someone mentioned immigrants and the more diverse breakfast choices people are exposed to as our country becomes ever more diverse, I hadn't even thought of that! In my case it was traveling abroad as a born and bread Canadian that definitely reset my palette! Cereal is very uncommon as a breakfast food in Japan, so I adapted, and it stuck with me.)

I grew up eating cereal as a kid but haven't really touched it in the past few years and I have to say I feel way more energetic and healthy.


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## AltaRed (Jun 8, 2009)

moose said:


> I heard that cereal sales for general mills were slumping as of late. And I too would like to know what people (kids, millennials, and the older folks) are eating for breakfast usually.
> 
> Quickly, I would add that I have the impression that Kelloggs does nicely in the fit woman low calorie granola bar department


For all the years I have been retired (and for years before then), I find Life brand cold oats cereal or Nabisco's spoon size shredded wheat, with 1% milk, kick starts my metabolism in the morning and gives me the fibre that keeps my constitution in order. Occasionally I will make oatmeal but do not add additional sugar or milk..but sometimes a bit of cinammon. That keeps me going until lunch.


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## bettyboop (Dec 13, 2011)

I usually have a green smoothie for breakfast, on the days I don't it's either yogurt or steel cut oats.


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## gibor365 (Apr 1, 2011)

_As for breakfast, I generally go for either an egg sandwhich,_ But the highest cholesterol is in eggs ), As majority of Eastern European I was usually eatimg cheese or salami sandwich for breakfast, but lately I was eating more General Mills triple berries oatmeal cereal (with additon of fresh berries).... 
generally looking at health issues around the globe, I'm bullish on big pharma or medical technology company\ies like JNJ, ABT, ABBV, BMY, BDX, BAX.... and some healthy food companies, but which one?!


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## Nemo2 (Mar 1, 2012)

AltaRed said:


> For all the years I have been retired (and for years before then), I find Life brand cold oats cereal or Nabisco's spoon size shredded wheat, with 1% milk, kick starts my metabolism in the morning and gives me the fibre that keeps my constitution in order. Occasionally I will make oatmeal but do not add additional sugar or milk..but sometimes a bit of cinammon. That keeps me going until lunch.


One of our choices is _Post_ 0 Sodium/0 Sugar Shredded Wheat:

http://postfoods.ca/our-brands/post-shredded-wheat/our-story/


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## MrMatt (Dec 21, 2011)

moose said:


> I heard that cereal sales for general mills were slumping as of late. And I too would like to know what people (kids, millennials, and the older folks) are eating for breakfast usually.
> 
> Quickly, I would add that I have the impression that Kelloggs does nicely in the fit woman low calorie granola bar department


My kids eat cereal.
I eat smoothies, or oatmeal, wife eats oatmeal.
Large flake oats aren't a very high margin product.


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## HaroldCrump (Jun 10, 2009)

gibor said:


> That what I kinda don't get... I can understand that people consume less MCD or KO, or Campbells.... but why cereal? This is healthy food! Even my family doctor suggested me to eat more cereal because I have high cholesterol and blood pressure....


Methinks you need a new doctor, not a new stock :biggrin:

Others have already pointed out the adverse health effects of processed cereals.
In addition, this industry is heavily leveraged on the GMO and subsidized corn industries.
Any adverse changes, govt. policy, etc. in either case will affect their input costs.

There is currently a global backlash against GMO foods.
An escalation in the resistance to the growing and distribution of GMO crops can increase their input costs.

If you need a consumer staples stock, look at P&G, UL, etc. (but I suspect you may already have them).


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## fatcat (Nov 11, 2009)

gibor said:


> _As for breakfast, I generally go for either an egg sandwhich,_ *But the highest cholesterol is in eggs )*


gibor, eggs are back baby, big time, eggs are all good again ... perfect protein

https://medium.com/@davbunnell/why-you-should-eat-up-to-1000-eggs-a-year-36e49d68aef2


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