Bad news for breakfast cereal
- Thread starter Charlie Marlow
- Start date
So you’re saying that Omaha labor costs has nothing to do with them closing the plant? Somehow I doubt that.
A good store grocery buyer is worth his weight in gold. The guys that are good are good.
So, the salesman calls on the grocery buyer with a promo on Doritos with at 2.99 price point. There might be a BOGO spiff for the store. Say the customer buys 3 bags for @ $ 9.00. They run the promo for 3-4 days or even week, but they a ton of additional stock to sell once the sale ends and then get their $ 5.50 a bag for those that didn't shop the sale, or eat a ton of those chips. The products that tend to have really good "sale" prices, typically have real good shelf code.
One thing for sure, the store grocery buyer or his top guy will almost always order the soap aisle because that's the most profitable product in the store based on volume. Sure a small specialty area may make more net profit, but the soap aisle generates the gross profit. Proctor and Gamble, Arm and Hammer, Dial Soap, etc, they do a shit load of off-invoice pricing.
Some store have a pricing rationale where they would rather sell less units and make more per purchase profit, others believe in velocity, or selling more for less money. Some grocery buyers use strictly net profit, others use gross profit as their pricing structure.
They are called "loss leaders". Kinda like with Miracle Whip.
Customers who only come in for the specials are called "Cherry Pickers."
I haven't read the article, but are the plants they are moving too also unionized by the same union?
As I said in another thread, my son works for an international company and deals with the real internal numbers on a ton of economy/industry.
He says the overriding theme is NOBODY is spending any money now.
How many people do they employ, and is there any industry in Omaha that can absorb a large influs of people used to making top wages?
Economically speaking, things are gonna get a lot worse in the next 3 months.
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I would want to spend more than five seconds looking into why the Omaha plant is closing, before bloviating about why it's happening.
In 2021, the same union that went on strike in Omaha also went on strike at Kellogg plants in Michigan and Pennsylvania (also Tennessee). Workers in Ontario would not belong to the same union, but labor costs there are very high.
They did have a
We only buy the sale items each week except for milk. It's doable and we buy store brand almost exclusively. We hit Aldi whenever possible which isn't that often. Nearest 1 is 100 miles away but their fresh produce and bread is hard to beat
I believe I read, the last time Kellogg's had a strike. They said they would have to close one of the plants, if the Union didn't meet some of their demands on concessions. I was kind of waiting to see if this eventually happened, at one of the plants.
Funny how I had relatives working there back when I got my 1st summer job. Making cereal sounded Super Lame, so I took a hard pass. Didn't know they paid $$$$ like that at the time or I didn't listen like normal. I guess you can work like a dog, but eat steak everyday too.
Funny how I had relatives working there back when I got my 1st summer job. Making cereal sounded Super Lame, so I took a hard pass. Didn't know they paid $$$$ like that at the time or I didn't listen like normal. I guess you can work like a dog, but eat steak everyday too.
So you’re telling me free market forces have nothing to do with them closing the plant? Somehow I doubt that.
My wife bought the Aldi's version of Cheez-It once. I told her that I appreciate her trying to save some money, but we can splurge and get the good stuff.
That off brand Cheez-It is terrible. At least the Aldi's brand.
Probably smart. Isn't cereal one of the worst foods you can possibly eat with all the sugar most contain?
I was just going to say hate seeing anyone lose their job but cereals are absolutely horrible for us. One of the worst things we can give to kids to start their day
Just like 15-20 dollar an hour minimum wage hasn't resulted in higher food prices at the burger joints and kiosks instead of humans. Everything has consequences
Continuing unemployment is staying elevated. Meaning people aren’t finding work once unemployed.
Striking unions are free market forces? On the other hand you’re right that if a union artificially drives employment costs too high, companies will move to other less costly locations. People shouldn’t complain then when production of goods gets moved out of the country.
Unions once served a purpose. Not so much anymore and in most cases are a big problem because of their greed,
I believe the free market force he's referring to is the declining demand for Kellogg's products, which is causing the company to consolidate production at fewer facilities. And they're not shifting production to Guatemala, but to Michigan, Pennsylvania and Ontario. If you think these are locations that have cheaper labor because the food workers' union holds less sway than in Omaha, good luck pitching that theory.
So why those facilities instead of Omaha? Labor costs and the fairly recent strike I’m sure have nothing to do with it🙄
Sad to see jobs leave the Nebraska area, feels like ConAgra 2.0 and yes, guys like me are partially to blame as I Stopped eating cereal years ago. Most of it is riddled with trash and is just so bad... I've maybe had 2 bowls in 10 years.
It's the SAME UNION in Michigan and Pennsylvania and they also went on strike three years ago, just like in Omaha.
And of course labor costs are a factor in the plant closing, but they're not unique to Omaha. Labor costs are clobbering every business.
Kellogg’s claims Omaha plant needs new equipment. Probably just a business decision in light of decreasing mark share.
Like others have said, $6 is too much for sugar coated flakes
Like others have said, $6 is too much for sugar coated flakes
Ibota is awesome my Wife has easily saved over 15k the last 5 or 6 years. Patience and dedication but well worth it.
Or replacing a full time job with 2-3 part time gigs.
I’ll concede that. The fact remains that labor costs company wide are driving part of the rising cost of their product which decreases demand. Unions have driven a large share of our manufacturing out of our country and made us dependent on our enemies.
You all realize that these manufactures produce the "store-brand" items?
You keep talking about labor costs. How much does the CEO and upper management make. We didn’t go on strike for a raise. We were trying to get rid of the two tiered system we let them have when cereal sales dipped before.
No one really should be eating cereal anyways. Horrible for you and has contributed to the obesity epidemic that plagues the US.
Are you saying you went on strike because you think the ceo and upper management make to much?? Gawd I hope that's not what you're saying.
Virtually all food other than unground meat has it’s fair share of trash in it. Sugar is the biggest issue with cereal. Breakfast cereal has fed hundreds of millions of kids in particular. Vitamin and other nutrients added to cereal have actually contributed to better nutrition for kids who otherwise might not get what they need for proper development. It’s not black and white.
Sure, but the store brand products drive less revenue. It's better than losing the business to another manufacturer, but a shift toward store brands is still a killer for a company like Kellogg.
I guess I’ve been forced in the past to eat store brands instead of name brands and I didn’t believe they tasted the same. Cereal at self serve hotel breakfasts generally tastes like crap even though it’s made to look like Kellog’s.
Virtually all good other than unground meat?
Rice? Potatoes? Onions? Eggs? Carrots?
Processed food is what is terrible for most people. All the sugar and corn syrup.
Was cereal great at one time when people could work off all the added calories? Yeah. It's not 1950 anymore.
Yeah I'm not big on the store brands either.
The only cereals I like are Wheaties and Raisin Nut Bran, and the latter is loaded with sugar. So once or twice a week, I eat Wheaties with a little bit of Raisin Nut Bran poured on top. It's still junk food, but not a total sugarfest.
