Caso Quaker Oats

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CHRISTIE L. NORDHIELM

Quaker Oats’s Oatmeal Division
Polly Kawalek emerged from Bob Morrison’s office after her annual review in December
1998. By any measure, 1998 had not been a successful year for Quaker Oats’s oatmeal division
(“Oatmeal”), and culpability fell on Kawalek’s shoulders. It had been the warmest winter in
memory across the country, causing demand for oatmeal todrop, and failed product releases had
cost sales and led to trade marketing spending deficits. Furthermore, consumer interest in the
oatmeal category was waning, and the relevance of a 125-year-old brand was in question.
Quaker was among the top major brands mentioned when consumers were asked to list the
healthiest, most nutritious foods, so the “brand equity was bullet-proof nutritionally andevoked
wonderful memories, but it was a little old-fashioned, and everybody thought they already knew
all about it,” Kawalek explained. (See Exhibit 1 for consumer perceptions of brands’ nutritional
value.) Faced with dozens of substitute breakfast products, consumers were not loyal to oatmeal,
and Quaker struggled to breathe excitement into the category to attract buyers and keep currentcustomers. In defining a strategy for selling oatmeal, Kawalek had confronted fundamental
questions faced by the company as a whole. Who was Quaker’s core consumer? What did he or
she value about Quaker brands, and how could those values be served by Quaker Oatmeal? “How
can Quaker get a breakthrough message that provides a reason for consumers to eat oatmeal?” she
wondered as she trudged back toher own office.
Kawalek had been promoted to corporate senior vice president and president of Quaker’s hot
breakfast division in November 1996. The following year, Quaker hired a new CEO, Bob
Morrison, who immediately eliminated all executive vice presidents, the only layer between
Kawalek’s position and the CEO. Invigorated by her greater level of authority and by the
challenge of takingthe reins of a mature product that showed no obvious signs of growth
potential, Kawalek set out to rebuild Quaker Oatmeal. During the first eighteen months in her
new position, Kawalek did achieve record sales results and maintained Quaker’s number-one
share position, with command of 60 percent of the hot cereal market. The degree of that
dominance was shrinking, however, and the robust growththat she envisioned had not
materialized. By the end of 1998, Oatmeal was stagnating. (See Exhibit 2 for Quaker hot cereal
sales trends.)
Though she was frustrated after her review, Kawalek was confident in the plans she had
already put in place for improvements in 1999 and beyond. There were bright spots on Oatmeal’s
horizon, and Kawalek believed that her approach would capitalize on them.She was still left to
wonder, though, at what rate a mature product like oatmeal could realistically be expected to
grow. Was oatmeal a product that could fulfill the changing needs of Quaker consumers, or was it
a relic of the past? As a company, Quaker made repeated decisions about resource allocations—
©2006 by the Kellogg School of Management, Northwestern University. This case was preparedby Gretchen Hall ’01 under the
supervision of Professor Christie L. Nordhielm. Cases are developed solely as the basis for class discussion. Cases are not intended to
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QUAKER OATS’S OATMEAL DIVISION

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decisions based on the growth...