The move is in response to the decline in Kellogg stock, which was spurred in part by the change in consumer preferences, as shoppers are becoming more health conscience and avoiding foods high in sugar.
John Stanton, St. Josephs University Professor of Food and Marketing joined Fox Business News' "Mornings with Maria Bartirom" on Thursday, to discuss why Kellogg is making the move and whether or not it will stimulate interest.
"It is a great way to get some attention in a category that is dying and make some fun out of having cereal," Stanton said. He insinuated that what has hindered Kellogg is that eating cereal is boring.
However, Stanton feels that with this new café concept it doesn't have to be, "what they are trying to say is cereal doesn't have to be boring. The idea is to create fun and excitement and show that Kellogg's believe their breakfast cereal can be something they would like to have in the morning."
Stanton reiterated this marketing strategy is less about profits, and more about getting people excited about the products. "This is a good way for a company whose category has been declining and you are sitting around saying we have to get people to recognize this is a good product."
Shares of Kellogg are higher by 0.27% to $77.88 at the start of trading this morning.
Separately, TheStreet Ratings has set a "Buy" rating with a rating score of "B+" on Kellogg's stock. This is driven by a number of strengths, which TheStreet Ratings believes should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks it covers.
The company's strengths can be seen in multiple areas, such as its notable return on equity, expanding profit margins and solid stock price performance. TheStreet's Ratings feel its strengths outweigh the fact that the company has had sub par growth in net income.
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: K