# Quarter of breakfast cereals' cost is spent on marketing, so…

- Link: https://fundraising.co.uk/2008/06/24/quarter-breakfast-cereals039-cost-spent-marketing-so/
- Published: 2008-06-24T09:51:04+01:00
- Author: Howard Lake

“One of the biggest costs in cereal manufacturing is not the value of the ingredients
not the cost of the production, but the marketing. About a quarter of the money 
you spend on breakfast cereal goes on the cost of persuading you to buy it. That
still leaves room for gross profit margins on processed cereals that are 40% to 
45%.”

So writes Felicity Lawrence in The Guardian Weekend on 14 June 2008 in an edited
extract from her book “Eat Your Heart Out: Why the Food Business is Bad For The 
Planet And Your Health”.

Where’s the public outcry about these costs? Why don’t you hear people saying that
of course commercial manufacturing companies are very poorly run, they pay their
staff far too much, and of course they wouldn’t ever spend their money on cereals.

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Yet those same people will decry charities for spending money on fundraising, for
paying professional staff to do an efficient job, and cite this as a reason why 
they don’t give to charity.

So, spend 25% on marketing to achieve a 40-45% gross profit. That’s a pretty good
return on investment for a fundraising campaign.

So why is it OK for the likes of Kelloggs to achieve those levels of business investment
and efficiency, but not for charities?

I suggest it’s a mix of double standards and an (wilful? nostalgic?) uninformed 
view of how charities operate.

Still, next time I hear someone telling me how poor charities are I might tell them
a story about the corn flakes they had that morning…

 * **[Faster Payments Service – any benefits to charities yet?](https://fundraising.co.uk/2008/06/24/faster-payments-service-any-benefits-charities-yet/)**(
   24 June 2008)
 * **[NSPCC denies rumours of financial difficulties](https://fundraising.co.uk/2008/08/05/nspcc-denies-rumours-financial-difficulties/)**(
   5 August 2008)
 * **[National Trust trials interactive version of annual report](https://fundraising.co.uk/2008/08/11/national-trust-trials-interactive-version-annual-report/)**(
   11 August 2008)