business news in context, analysis with attitude

The Los Angeles Times reports that Snoop Dogg is accusing Post Consumer Brands and Walmart of being cereal killers.

According to the story, "The hip-hop star, whose real name is Calvin Broadus, and fellow rapper and label head Master P, whose real name is Percy Miller, are suing the cereal conglomerate Post Consumer Brands, alleging it ruined their chances of diversifying the cereal scene and denied their company profits.

"In 2022, the artists established Broadus Foods with a vision of creating a family-owned company that would help diversify the food industry and set 'an example to minority entrepreneurs and business owners that they too could create and sell a good product,' a news release stated.  Part of the Broadus Foods mission, according to the pair, is to donate a portion of its proceeds to several charities aimed at ending hunger and homelessness within their communities."

The complaint says that Broadus Foods struck a deal with Post to have it distribute the Snoop Cereal products — Fruity Hoopz with Marshmallows, Frosted Drizzlers and Cinnamon Toasteez — to retailers.  It also says that Post wanted to buy Broadus, but that the entrepreneurs declined.  

The Times writes that "the rappers allege that Post had no intention of fulfilling its end of the bargain. Instead, the complaint claims, Post 'ensured that Snoop Cereal would not be available to consumers or that it would incur exorbitant costs that would eliminate any profit to Broadus Foods.'

"The complaint also alleges that Walmart, the largest seller of Post products, stopped putting the Snoop Cereal products on store shelves after the products successfully launched in Walmart stores across the country in July. According to the lawsuit, Walmart customers could not find the cereals in the stores within a few months.

"Among other things, the lawsuit accuses Walmart of hiding the cereals in a stockroom, placing them in the baby or clearance sections, and hiking their prices to more than $10 a box. Post and Walmart have also tried to hold Broadus Foods responsible for vague expenses incurred because the products did not sell, the complaint asserts."

KC's View:

Be interesting to see how this plays out.  Last I checked, manufacturers/distributors and retailers are in the business of selling stuff, and when stuff sells, to then sell more of it.  So it is hard to imagine why Post and Walmart would behave this way unless they saw the cereals as a losing proposition.