CEO: Poor People Should Eat Our Cereal For Dinner! #TYT

When we think about our consumer under pressure, there's things that we could do, but most importantly, what this category could do. The cereal category has always been quite affordable, and it tends to be a great destination when consumers are under pressure. So some of the things that we're doing is first messaging. We've got to reach the consumer where they are. So we're advertising about cereal for dinner. 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. That was the CEO of Kellogg. His name is Gary Pilnick. Giving families struggling with the high cost of groceries due to inflation a solution to their woes. If you will just eat cereal for dinner like a college student. Insane. Now, he was responding to a question about a recent article in the Wall Street Journal titled, it's been 30 years since food ate up this much of your income ongoing high costs lead food manufacturers and restaurants to keep price

s elevated, and they report that eating continues to cost more even as overall inflation has eased, it slowed down. Does it mean prices have gone down? The benchmark price of everything is still high, but prices continue to go up at a slower pace. I guess that's something that we're supposed to celebrate now. Prices at restaurants and other eateries were up 5.1% last month compared with January of 2023, while grocery costs increased 1.2% during the same period, according to the Labor Department.

And if you take a look at this chart, you'll see that in 2022, consumers spent 11.3% of their disposable income on food, which is a three decade high. And it is true that the rate of inflation has slowed this past year. Food prices, which includes both food at home and restaurant purchases, increased 2.6% from January of 2023 to January of 2024, according to the CPI report released February 13th from the Bureau of Labor Statistics. By comparison, prices rose 10.1% over the previous one year per

iod in 2023. So again, prices continue to go up. They haven't gone down, but they're increasing at a slower pace relative to last year. It's not good. I mean I think we all feel it at the grocery store. Right. And it's it's pretty devastating. And so the idea that we should take advice from the CEO of Kellogg, which makes cereal and the advice, of course, is to eat more cereal, like obviously there's a conflict of interest there. Like, why are we taking his advice? Or even why would we be placed

in a situation in which the media would put him in a place to give us advice on inflation, like it's insane. We might have millions of people watching this show, but you can be the difference maker because we just need 1% of our audience to be paid members, and then this show can be around forever, so you can make that difference. Click join. Now look, I think that this is one of the problems for Biden's reelection, because while the Biden administration wants to tout his economic successes, pe

ople are not feeling those successes when they go to the grocery store. It's just the fact of the matter. It's the truth. Yeah. So, I'll get to what he could have done about it, but, they kept talking in this interview, the longer interview about how the consumers are under pressure, and they're under pressure because if you have to give a third of your income to rent and now 11% of your income to food, and a lot of people are now past 30%, which is ideal for the rent or mortgage, they're now at

about 50%. My God, what's left? There's almost nothing left. Right. So that's why they're under pressure. But in this context, the CEO of Kellogg is partly talking about it as a positive thing because they're under so much pressure, they have to resort to cereal for dinner. And he's smiling throughout the entire interview, going like, basically, isn't it great? Okay. And so for I mean, somebody ought to teach the brother that when you go on TV, you're not supposed to say, like, it's great that

consumers are getting annihilated and they got to eat cereal for dinner now. Which is not a nutritious option for dinner. - Yeah. - And look, I get it. If you're just talking about in your country club with your business buddies, they talk like that and they're like, oh, great job at Kellogg. Nice job on the profits, etc.. Oh, the consumers are under pressure. We got them now. Right. And I get it. You want to push your brand so that more people will eat it at breakfast, lunch and dinner. So you'

ll make more money. We all understand, but we're asking for a little bit of sympathy rather than the almost gloating about it, you know? And so and as a guy who cereal for dinner for about a decade, it was not ideal. Not ideal. It's a thing you have to do rather than want to do. Exactly. And more and more Americans are being pushed into a situation where they just can't afford what they would typically purchase at the grocery store for their families. And, look, this is the thing that's so frust

rating because consumer behavior can change what these corporations are doing, right? Because if you look at the. Price of something and it's just too much, then you're going to change your behavior. But that's really difficult to do with things you need to survive, like food. Okay, so I don't know how much further this can go. You're starting to see some changes in behavior when it comes to the auto industry. So the price of new cars had become so exorbitant that more and more Americans are lik

e, forget the new car. We're going to look at the used car lot and see what we can find there. And so now the auto dealers and the car companies are like, okay, we need to start offering some discounts for the newer vehicles to try to increase the market for new cars versus used cars. See, in that situation, there's a little bit of wiggle room for for Americans, but it's a lot more difficult when it comes to something like the price of groceries. Yeah, and that's partly why a lot of the grocery

chains are bragging in, their calls to shareholders saying, hey, we're increasing prices more than we even have to, because people have to turn to us because they can't go to restaurants, for example. Yeah, exactly. And so since they're squeezed so much, we get to squeeze them a little bit more. And. I know for the shareholders, they say they kind of have to say it as a way of bragging about how well they did as CEOs and stuff. I still think it's a very bad idea, and it's certainly a bad idea to

do it in public, because I guess still a couple of consumers watch. CNBC is mainly business guys. But yeah. In fact. But look, Palahniuk's comments were so outrageous that this might be one of the only times I've seen a CNBC host push back. Okay, so here's that moment. It was incredible. Let's take a look. In general, the cereal category is a place that a lot of folks might come to because the price of a bowl of cereal with with milk and with fruit is less than a dollar. So you can imagine why

a consumer under pressure might find that to be a good place to go. Right? I'm all for innovation and marketing. But the idea of having cereal for dinner, is there the potential for that to land the wrong way? We don't think so. In fact, it's landing really well right now. Carl, when we look at all of our data, of course we would know that breakfast cereal is the number one choice for in-home consumption. We understand that for breakfast. It turns out that over 25% of our consumption is outside

the breakfast occasion. A lot of it's at dinner, and that that occasion continues to grow as well as the snacking occasion. But, cereal for dinner is something that is is probably more on trend now, and we would expect to continue as that consumer is under pressure. Cereal should be reserved for stoner food. That's it. That's it's sugar. It's a sugary treat. And it's just that a sugary treat. Cereal has its place in society, but its place is not dinner for children, dinner for your families. But

I don't know, Jake. He says that this is all landed really well. What do you think? Yeah, again, he just can't separate out two things. Look, I. And I told you guys, I don't know, a month ago or so, in one of the shows that we're doing, this topic came up and I said, the reason I had so much cereal when I was poor was because it comes in when I did the math under a dollar per meal. - And so if you. - Buy the grocery stores brand of it, well. No. Back in the day when I was doing it, it was even

if you bought Fruity Pebbles and Milk, you could still get it to under a dollar, right? So but when you say it's landing really well, yeah, I know you mean for your bottom line, but it's not landing really well with the public where you're like, ha ha, you got to eat for under a dollar a meal because you're dead broke. But I made more money as a CEO. Not a good look. Not landing nearly as well as you think it is. And please stop saying things like the breakfast occasion. - He's gonna circle back

to that. - Okay. But like. And after the show I'm going to have a snacking occasion. What. Please speak like regular human beings. They're incapable like totally total PMC talk. They have to. But guys last thing again we read you the quotes earlier. You know when we covered these stories about inflation about how they would tell their shareholders good news. It turns out we raised prices beyond inflation and people still bought the products. So we're going to keep prices high right. That's them

telling on themselves. It wasn't really the inflation as much as how much we wanted to make extra profit. Oh I wanted to come back to what Biden could have done about it. You're right. This is hurting him a lot and it's hurting Democrats now. Etc.. Well, one thing you could have done is you could have tackled price gouging. So when you see a shareholder quote like that, it didn't have to be just a show like ours. Imagine if Biden did a press conference and said, look, I saw the, Kroger's and Ra

lph's and all these different stores across the world and across the country, and they said this in their shareholder meeting. And you know what? That's it. If you guys are, taking advantage of this situation, taking advantage of the American people, there's going to be consequences. And here are the laws or regulations that I am proposing. And even if the Republicans go, oh, that's outrageous, how dare you attack these American companies? Then the Republicans are defending higher prices and you

're trying to get lower prices for the average American. Oftentimes, the fear of regulations leads to corporations changing some of their behavior. Even the pressure, if you don't get the law passed. - That's exactly. - Right. You've seen that with the FTC and some of their threats toward, you know, companies breaking antitrust laws and things like that, or allegedly breaking antitrust laws. So who knows? The devil is in the details, though, because I don't know what he would propose. Would it b

e price fixing? No, no, I would definitely be against price fixing. But there's a million steps before price fixing. And here's how many of them Joe Biden did. Zero, correct.