From A Happy Tummy to A Happy Family: How does this company bring its products at the forefront of consumers’ choices? [Monday: Marketing Marvels]
In the first sentence of the novel titled, “Anna Karenina,” Russian writer Leo Tolstoy said:
“Happy families are all alike; every unhappy family is unhappy in its own way.”
What Tolstoy meant in this statement is in order for a family to be “happy,” several key aspects must be attained such as good health, financial stability, mutual affection, etc.
Do you know that one company adopted the quote above as part of its key business principles?
Post Holdings, Inc. is an American consumer packaged goods company that operates in the foodservice, food ingredient, refrigerated, active nutrition, and private label categories.
As of 2019, the company is the third top cereal maker in the US, next to Kellogg’s and
Curious about how Post Holdings continues to thrive and compete in a changing world despite being 126 years old?
Just one secret―the willingness to adapt!
Just like Leo Tolstoy’s “happy families,” Post Holdings believes companies that thrive for a long time share a common trait: The ability to adjust to changes in the way they do business.
That’s why the company makes sure its operations are always “dedicated to delicious” because…
A happy tummy is a happy life and a happy life makes a happy family!
Some of the brands under Post Holdings are:
Manufactures products such as the Premier Protein Bar, PowerBar, Dymatize Protein Powder, and Joint Juice Supplement Drink.
Post Consumer Brands
Produces cereal products like Grape-Nuts, Honey Bunches of Oats, Malt-O-Meal, Pebbles, and Uncle Sam Cereal, just to name a few!
This leading cereal business in the UK manufactures various breakfast products like Alpen, Barbara’s, Ready Brek, and Weetos.
Foodservice and Refrigerated Retail
This segment consists of Michael Foods and Bob Evans Farms’ egg, mashed potatoes, and cheese products.
Private Brands (8th Avenue Food & Provisions)
Manufactures products under the Dakota Growers Pasta Company, Golden Boy Foods, Attune Foods Brands, and American Blanching Company.
How does Post Holdings keep up with changes in market trends and demands?
Through the concept of “seasonality!”
To prove its ability to adjust and adapt, Post Holdings varies its product production based on “seasons.”
(Seasons = Demand for certain products may be influenced by specific spending patterns and timing of promotional activities, holidays, and other events)
For example: Thanksgiving and Christmas celebrations increase the demand for Post Holdings’ egg products, potatoes, sausages, side dishes, and cheese.
Meanwhile, the demand for Malt-O-Meal, Better Oats, and Ready Brek tends to lean towards the cold winter season.
Because of this, the company ramps up the production of such products in those times to cater to the needs of consumers.
On the other hand, BellRing Brands tend to record lower sales as a result of the cold weather and holidays, which impact outdoor activities.
This compels Post Holdings to manufacture less BellRing products and focus on creating more in-demand ones.
Once the products are all set, they will now be distributed to grocery stores, supercenters, club stores, specialty stores, and drug stores.
Some of Post Holdings’ largest customers include Walmart, Tesco, Sainsbury’s, Sysco, US Foods, Costco, Sam’s Club, and Asda.
Post Holdings also sells products via different e-commerce channels to reach and connect with consumers in the digital world.
Aside from that, the company creates various TV ads that aim to educate consumers and raise brand awareness.
Screenshot from Post Holdings’ TV ad titled, “Bowls” in 2020. The video tells viewers that the company keeps its production lines running because it knows what a “full bowl” can mean.
Another marketing strategy of Post Holdings is positioning its products as a “healthy meal alternative.”
By “healthy,” the company means savory, affordable, and keeps consumers energized throughout the day!
Let’s use the Goodness-TO-GO product line as an example.
Originally, the line consisted of only drink products, but when granola bars became a trend in the market, Post Holdings started manufacturing Goodness-TO-GO bars, which ensure flavor, health, and “hunger-filling” qualities.
Alongside that, the company relaunched the entire product line as a “trendier and better way to replace a meal!”
These adjustments enabled Post Holdings to compete with other “big” cereal brands in the market!
In the past five years, Post Holdings, Inc. has recorded revenues of:
- USD 5.0 billion in 2016
- USD 5.2 billion in 2017
- USD 6.3 billion in 2018
- USD 5.7 billion in 2019
- USD 5.7 billion in 2020
Thanks to its willingness to adapt to ever-changing market trends, the company is able to manufacture good-quality products and address the needs and demands of different consumer groups.
Post Holdings, Inc.’s Earning Power: Valens Research vs. As-reported numbers
Post Holdings, Inc. (POST) makes for a great case study that we come back to regularly. One great reason?
The company has proven itself to be a better earning power generator than investors might think.
So, how well has POST been growing its business in the past years?
The research doesn’t lie—nor do the results. Earning power (the blue bars) continues to show results higher on average than what traditional databases show.
The blue bars in the chart above represent POST’s earning power (Uniform Return On Assets). POST has seen generally robust profitability. Its Uniform ROA ranged from 17% to 33% in the past ten years, or an average of 25%. Uniform ROA is at 25% in 2020.
The global ROA is just 6%.
The orange bars are the company’s as-reported financial information. If you relied on these numbers, you will see a company with terribly understated profitability. As-reported ROA (return on assets, a measure of earning power) only ranged from 2% to 4% in the past ten years. Its ROA in 2020 was only at 4%, almost six times lower than its Uniform ROA in 2020.
That’s what you’ll see in Yahoo Finance, Google Finance, and most other databases.
The company’s stock price also performed better than the rest of the stock market over the decade, which we can see in the blue line in the chart below. Its returns have been well above the market.
The numbers show that Post Holdings has been doing well and making a profit.
According to Robert V. Vitale, President and CEO of Post Holdings, the environment in which the company operates is dynamic and challenging.
He believes there’s a generational shift in how consumers relate to businesses―“older” consumers think about brands as “messages about quality and product characteristics,” while the “younger” ones demand a purpose.
That’s why as a leader of Post Holdings, Vitale encourages employees to focus on adaptability.
By adjusting its supply chain and product development capabilities, the company will gain a strong market position.
As this happens…
Post Holdings will enjoy “enhanced long-term prospects and more opportunities to transform for the future!”
About The Dynamic Marketing Communiqué’s
“Monday Marketing Marvels”
Too often, industry experts and the marketing press sing the praises of some company’s marketing strategy.
…Only for the audience to later find out that their product was a flop, or worse, that the company went bankrupt.
The true ROI in marketing can’t be separated from the business as a whole.
What good is a marketing case study if one can’t prove that the company’s efforts actually paid off?
At the end of the day, either the entire business is successful or it isn’t. And the role of marketing is always paramount to that success.
Every Monday, we publish a case study that highlights the world’s greatest marketing strategies.
However, the difference between our case studies and the numerous ones out there, is that we will always make certain that the firm really did generate and demonstrate earning power worthy of study in the first place (compliments of Valens Research’s finance group).
By looking at the true earnings of a company, we can now rely on those successful businesses to get tips and insights on what they did right.
We’ll also study the greatest marketing fails and analyze what they did wrong, or what they needed to improve on. We all make our mistakes, but better we learn from others’ mistakes—and earlier, rather than later.
Hope you found this week’s marketing marvel interesting and helpful.
Stay tuned for next week’s Monday Marketing Marvels!
Head of Marketing
Valens Dynamic Marketing Capabilities
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