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Kellogg's sales hurt as dieters drop Special K

Published on NewsOK Modified: July 31, 2014 at 2:15 pm •  Published: July 31, 2014

NEW YORK (AP) — Kellogg's cereal sales are struggling, in part because Special K is falling out of fashion with dieters.

The company, based in Battle Creek, Michigan, said Thursday that its profit fell 16 percent in the second quarter as its flagship cereal unit continued to suffer.

Cereal sales in the U.S. have been sluggish for some time now, given the ever-expanding number of breakfast options including Greek yogurt, egg sandwiches and even waffle tacos from fast-food chains. But Kellogg is also dealing with problems specific to some of its most popular brands. The movement away from calorie counting in the dieting world, for instance, has hurt Special K, which over the years has expanded to include snack bars, crackers and frozen waffles. The main selling point for those products has traditionally been that they're relatively low in calories.

In a phone interview, Kellogg CEO John Bryant noted that people are now more interested in foods that provide nutritional benefits, rather than those that simply keep their calorie counts down. It's why Kellogg has been getting rid of some of its 100-calorie products.

"There's a shift in consumer expectations," Bryant said.

To cater to those changing tastes, Special K has already been rolling out new products, including an instant hot cereal that includes grains such as quinoa. But the efforts haven't yielded a significant impact, with the company reporting a 4.9 percent decline in core sales for its U.S. Morning Foods unit in the latest quarter.

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