You can’t “Leggo your Eggo” if you can’t get one
Posted on | March 15, 2010 | No Comments
Author:
Jason Voiovich
Ecra Creative Group
Key Points:
1. FDA inspectors found Listeria bacteria in a Kellogg’s facility in Atlanta that makes Eggo frozen waffles. Ever since, Eggo waffles have been in short supply nationwide.
2. The short-term risks are modest; if they can get back up and running quickly, the heightened interest may actually boost sales.
3. However, it’s taking longer than anticipated, and consumers are losing connection with the brand long enough to consider a range of different options.
My oldest son has irrational love for Eggo waffles.
Specifically, Cinnamon Swirl Eggo Waffles. They’re like a little toasted cinnamon roll infused with white frosting. He goes through two boxes a week for breakfast. Check that, he went through two boxes a week for breakfast.
He hasn’t stopped for lack of enjoyment. It’s also not because my wife and I have put our foot down and insisted on healthy breakfast choices (more on that later).
Our problem is simple: We cannot find them.
And it is not because they are unpopular, it is because Eggo is not making them right now. And it is not for lack of demand (apparently, my son’s Eggo love is widely shared), it is because the Eggo factory has a big, big problem.
Long story short: In October 2009, FDA inspectors found contamination problems and Listeria bacteria in Eggo Buttermilk Frozen Waffles at a production plant in Atlanta, Georgia. Eggo maker Kellogg said they’ve had problems with the facility after it flooded, and have been working hard to clean it effectively. The FDA, however, hasn’t been impressed with the effort – subsequent tests have been positive for Listeria as well. Kellogg spokespeople say it will be mid-2010 before normal production is restore. And that’s if they can pass inspection.
The folks at Kellogg are no dummies. All you need is a few sick kids to ruin your brand. They pulled the plug quickly.
Unfortunately, for the business equation, that preemptive measure has meant one of the company’s major production centers is offline, and grocery stores across the country can’t get enough Eggos to meet demand.
That’s meant empty or half-stocked shelves and notices like this one:
To Our Valued Customers,
Some of your favorite Eggo products are out of stock nationally. We are working hard to fix this short-term issue. We’re sorry for the inconvenience and appreciate your continued support.
866-971-3320
Eggowaffles.com
Short term, my a. . .
This has been going on since last summer. That’s not “short term” in my book. But frustration aside, I thought it would be interesting to illustrate the short-term and long-term risk to the Eggo brand – as well as the short-term and long-term opportunity presented to its competitors.
To do that, I’ve created a decision tree of consumer behavior.
As we can see, Eggo doesn’t (or didn’t) really face much of a short-term risk. Eggo is such a dominant brand in its category, that it doesn’t really face an instant competitor that would be likely to hold on to much market share once full production resumes. We can see that evidenced by many grocery store shelves leaving the space open for Eggo – in effect, losing sales by square foot – while this has been going on.
As a bonus, absence does seem to make the (consumer) brand grow fonder. An incident like this can draw attention back to the Eggo brand and could even have (or could have had) a positive influence on sales. We’ve seen that with other commodity food purchases (Spinach, Tomatoes, etc with similar issues).
However, over the long term, Eggo faces significant risks. The longer consumers go without a particular brand, the easier it is to develop alternative habits. With dedicated effort, a purchase habit could be broken in as little as two weeks. But Eggo has worked hard to maintain at least some inventory, delaying (what I believe will be) the inevitable if it goes on much longer.
After about 90 days, a larger share of consumers will either engage with a new brand willingly (having lost hope), or begin to accept advertising and communication messages from alternative sources.
At first glance, it might be that a direct competitor (Pillsbury) or a store brand might be the largest recipient of new market share. Or perhaps that another toaster-ready breakfast option might serve as an alternative (i.e. Pop-Tarts, etc). These options represent the closest alternative to the brand experience.
But I’m not so sure consumers will stick with the category.
The length of the delay might play into underlying or festering unhappiness with the Eggo brand. In other words, in my case as an example, a parent might decide this is the perfect opportunity to move away from “toaster breakfast”. Personally, we are working on “grain” options – different cereal or bagel options my son might like instead. We are also considering more of a protein-rich option (eggs and lean meats), but time in the morning is a consideration, and most egg products require a bit more prep time.
Of course, there could be other options as well, but I think these are the big ones.
It all points to significant risk to the Eggo brand, and a significant opening for alternative breakfast foods to make inroads.
I haven’t seen much strategic competitive communication, however, which clearly is a strategic mistake. The longer competitors fail to take advantage of an open consumer mind, the longer they leave Eggo time to get its act together.
Opportunities rarely get better than this.
Related Links:
Company Information
CNN Money Article: Eggo Waffle Shortage
Tags: breakfast food > Eggo Waffles
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About
Jason Voiovich
Ecra Creative Group
Phone: 651.209.2778
Principal and co-founder of Ecra Creative Group, a Minneapolis, MN based creative services firm specializing in brand development, reputation process management, naming/trademark, and product launches to drive measurable business results.
