Not to butter up Aunt Jemima, but is Eggo's dominance toast?
While a Kansas City Star journalist taught "Eggo-nomics" to high schoolers, using the months-long Eggo frozen waffle shortage to explain supply and demand, WalletPop recently learned another lesson about capitalism: Look out for Aunt Jemima. Its toaster waffles could stand to gain the most as Eggo's presence shrinks.
If Eggo doesn't fix its production woes soon, will we gladly leggo our Eggo -- and embrace the competition?
"Stock-outs are death for goods that are low-involvement types of goods because people will readily switch brands," Donald Lichtenstein, a marketing professor at the University of Colorado, told WalletPop. "Frozen waffles are convenience goods that, while they have some degree of brand loyalty, if they're not available, consumers will switch."
This WalletPopper seconds the good professor for three reasons.
Aunt Jemima, Eggo's main rival in the breakfast wars, costs less -- $2.49 for a package of 10 waffles as opposed to $3.39 for 10 Eggos at Foodtown in Brooklyn, N.Y.
Aunt Jemima is backed by Pinnacle Foods, a company with resources deep enough to have purchased Bird's Eye in December for $670 million plus another $780 million to pay Bird's Eye's debt and expenses. And thirdly, the frozen waffle field has melted like butter on a warm Belgian. In 2007, rival General Mills dropped its toaster waffles because of Eggo's stranglehold.
Now it's batter up for Aunt Jemima, the pancake-focused brand which began producing toaster waffles in 1968. Despite Eggo's pledges to "work around the clock" to restore production, shelves presented a grim reality for the company at one grocer Monday.
The frozen food case at Foodtown featured nary an Eggo in sight while filled with Aunt Jemima waffles. The Foodtown store-brand waffles ($1.99 for 10) were absent, too, but only because they had sold out so quickly, manager Bob Peterkins said. "It's a huge outcry," he said to WalletPop. "Everybody wants their Eggos."
Even so, Lichtenstein, the university marketing wonk, indicated that empty shelves motivate grocers to fill them with whatever will sell.
Kellogg, the parent of Eggo, announced the shortage in November, citing a Tennessee plant shut down for renovation and an Atlanta plant crippled by flooding. The crisis is expected to last at least through June.
Not to waffle, but perhaps we're getting ahead of ourselves in even hinting that Eggo's extreme dominance is toast. Eggo, after all, did control 73% of the frozen-waffle market until this mess. And when it can crank out the waffles again at full speed, they'll probably sell like hotcakes.