The breakfast club

FRIDAY INTERVIEW:WE ARE in "the era of the 'and'," according to Tim Mobsby, Dublin-based president of Kellogg Europe. "The expectations keep ratcheting up. You have to do the basics, and then you have to that and that and that," he says, moving his hand up a notch in the air for each expectation.

But Kellogg’s is doing something unexpected in Ireland: it is hiring. Fifty new jobs will be in place by the end of the year, with most of the positions based at the 104-year-old company’s European headquarters in Swords.

Even with a 12.5 per cent corporation tax rate to enjoy, a multinational like Kellogg’s is not expected to be here, in uncompetitive old Ireland, when it has a variety pack of cheaper countries to choose from. It helps that Ireland has the highest per capita consumption of cereals in the world – a statistic that Mobsby, somewhat paradoxically, attributes in part to Ireland’s dairy tradition.

“It certainly didn’t do us any harm – the fact that we have a very well-developed business in Ireland,” says Mobsby, an Englishman who arrived in Dublin in 2005 when Kellogg’s first set up its European HQ in Airside business park.

“I don’t like the term business-friendly because I think it sets the wrong tone, but there’s an environment here that is actually conducive to doing business,” he says.

“Cost, obviously, is a factor, and the cost base here is probably not its greatest advantage, I’ll be honest about that. There are some unfortunate consequences in the current recession, but there may be some positives for the longer term as well if it actually makes Ireland more competitive in the European context.”

Not that Kellogg’s has had to cut the pay of its 200 (soon to be 250) staff. “We’re fortunate in that regard,” says Mobsby, who also goes by the titles senior vice-president of the Kellogg Company and executive vice-president of Kellogg International.

The food industry has undergone changes since Mobsby, a marketing specialist, ended a seven-year stint at Heinz to join Kellogg in 1982. Shifting product – Kellogg’s shifted almost $13 billion (€9.9 billion) in 2009 – is just the starting point. These days there are traffic lights to negotiate.

Kellogg’s has been named as one of the key players in the food industry’s estimated expenditure of €1 billion in lobbying to prevent the introduction of the traffic lights food labelling scheme, which had been advocated by the (now abolished) UK Food Standards Agency, among others.

In June, the European Parliament sided with the industry and voted against proposals to oblige manufacturers to label their products with red, amber or green symbols to denote the amount of fat, saturated fat, salt and sugar per serving. MEPs voted instead for the industry’s favoured method of front-of-pack labelling of guideline daily amounts (GDAs).

“People talk about lobbying, but actually the way a lot of regulation comes about is about collecting input from a whole variety of stakeholders. We’re a player, in that we contribute to that debate actively.”

While health campaigners say traffic lights are better at preventing consumers from buying unhealthy food and simpler to understand, the industry and some nutritionists complained it was too simplistic. “I would describe common sense prevailed,” says Mobsby. “The problem with traffic lights is they suggest there are good and bad foods, and we would argue that there’s no such thing as good and bad foods, there’s good and bad diets.

“The traffic-light system tends to demonise certain foods. If it gets labelled red, if a consumer sees red, it doesn’t say moderation, it says stop, don’t go there.”

GDAs, on the other hand, are “more friendly, more practical” and “not as complicated as people believe”.

Anyone who spent their childhood breakfasts reading the nutritional panels on the side of cereal boxes and wondering what vitamin B12 was all about will know that cereal companies were among the first to provide any information.

“Industry can move that much faster in many respects than regulators can. We can decide what we want to do: boom!” On the other hand, the words “full of salt” and “full of sugar” do tend to be uttered by nutritionally conscious parents in connection with Kellogg’s products – a connection Mobsby is understandably keen to break.

“There’s about 40 per cent less salt in our range of cereals, if you combine all of the tonnes of cereal that we sell, than 10 years ago. Now there was never a lot in the first place, but the science around salt is actually very, very strong so, as that has come along, we’ve tried to respond to that.”

Sugar is more of “a perceptual issue”, he believes. “Sugar tends to attract a vast amount of attention, which I would argue is disproportionate with the realities of the science, but hey, the science in the end doesn’t matter, it’s what the consumer feels, what they want. If the consumer thinks we have too much sugar, we have too much sugar, and we’ll find ways to take it down.”

As with salt reduction, “it’s critical that we do it at a speed that the consumer can accept”. Kellogg’s calls this modification of products “renovation”. Mobsby disputes the suggestion that the evolution of cereal to cereal bars has negative nutritional consequences. He says people use cereal bars as an alternative to fattening snacks, rather than as a processed breakfast.

Mobsby is not complaining about the greater entanglement of industry with “the social agenda” that has redefined his job. Since he swapped beans for All-Bran, he hasn’t looked back, with his career taking an upward spiral around Kellogg’s, from its UK base in Manchester to its corporate headquarters in Michigan, to Paris.

Neither Kellogg’s, nor Mobsby and his wife have any immediate intentions to leave Dublin. “Ireland is our home now, that’s where we’re based, we treat it as home.”

While Mobsby expects the recent bout of consolidation in the food industry to continue, the cereals segment is already “reasonably well consolidated”, particularly in Europe. Despite “disappointing” quarterly sales figures released yesterday, Kellogg’s has increased share in its two key European markets, the UK and France, as well as in Ireland, where AC Nielsen figures show it has a 58 per cent share of cereals.

Meanwhile, the financial crisis has reminded him of the importance of what he calls the “ordinary person” test. “What would an ordinary person do is a good way of thinking about how business today should operate. What is reasonable as judged through the eyes of an ordinary person? And if you can pass that test, you don’t tend to do too badly.”