Beyond Seinfeld’s ‘Unfrosted’ – Lessons from Michigan’s Serial Grain Entrepreneurs

The recent release of “Unfrosted”, directed by Jerry Seinfeld, had a disappointing debut on Netflix and was even considered “one of the worst movies of the decade“

But with an all-star solid that features Seinfeld, Jim Gaffigan and Amy Schumer plus America’s love for Pop-Tarts – In 2022, $3 billion was sold – the film has the potential to change into a cult classic.

And while it might make viewers need to go back to those 93 minutes they spent watching the movie, the true story of the toast cake may teach a worthwhile lesson about the persistence of serial entrepreneurs and the strategic decisions that may create a competitive advantage.

In mine teaching, research and working with student entrepreneurs over the last 15 years, I’ve learned that entrepreneurial ideas don’t have to be “new to the world” to achieve success.

A brand new invention: cold cereals

In 1876, Dr. John Harvey Kellogg, a renowned physician and creator, took over as superintendent of the Battle Creek Sanitarium. The famous medical resort attracted 1000’s of patients each yr to the small town of Battle Creek, Michigan.

John’s younger brother, William Keith Kellogg, handled the day-to-day operations while John tried to offer his patients with fresh air and a vegetarian, whole-grain eating regimen, which he called “biological life“

The eating regimen inspired the brothers to develop a recipe for a healthy breakfast, recognizable today as cold cereals. John Kellogg saw cereal as medicine for his sick patients and created the Sanitas Food Company to provide it for the sanitarium’s guests.

Will Kellogg believes that the product will also be consumed by healthy people. Although he saw broader industrial potential, he didn’t determine to pursue the idea until he saw the entrepreneurial success of a sanatorium patient who produced a similar product. This patient’s name was Charlie “CW” Post.

The post office couldn’t afford to pay for full room and board at the sanatorium, so he worked in the kitchenaccessing recipes.

After leaving the sanatorium, Post founded his own company, Postum Cereal Company, in 1894 and introduced the first ready-to-eat cold cereals to the wider market.

Post success prompted Will Kellogg to go away the sanitarium industry in 1906 and found the Battle Creek Toasted Corn Flake Company, which became a direct competitor to Post. In 1909, the company was renamed the Kellogg Toasted Corn Flake Company and in 1922 the Kellogg Company.

Serendipity results in industrial success

Although this cold cereal story predates the Pop-Tart story, it shows some of the ways in which entrepreneurial ideas come to light.

In the case of Kellogg’s Corn Flakes case played a role.

Although there are barely different versions of the original story, the gist is that after rolling out wheat dough and forgetting about it overnight, the Kellogg brothers discovered that the stale dough easily broke into thin pieces that might be used to organize cold cereal. Will later produced flakes with corn that were crunchier.

Another lesson of entrepreneurship is that success can simply be achieved recognizing an opportunity.

The approach to preparing cold flakes was discovered by accident and over time perfected through trial and error by the Kellogg brothers. CW Post adopted – some might say stole – the method for industrial use, without having to spend time inventing and perfecting the product.

Although the Kellogg brothers may have invented a healthy alternative to breakfast, Post was the first to bring this invention to market and thus the first to display its industrial viability.

Toaster Dough Race

While Post may have won the cold cereal battle in the product’s early days, Kellogg’s won the toaster cake contest featured in the movie “Unfrosted.”

After Post’s death in 1914, his daughter, Marjorie Merriweather Post, played by Schumer in the film, took over the company at the age of just 27, becoming one of the first American women to carry executive positions. In 1929, Postum Cereal Company became General Foods Corporation after Marjorie Post made quite a few business acquisitions.

What happened next shows that being first to market does not all the time provide a competitive advantage. In fact, it’s normal for some marketing experts to call this the “second-mover advantage.” One industry research suggests that early movers beat latecomers in only 15 out of fifty product categories.

This is what we see in the Pop-Tart story.

It was Statement of Marjorie Post in February 1964 about upcoming “Country Squares” – shelf-stable fruit-filled cakes – which gave Kellogg the idea to create its own version.

In the six months before Country Squares even hit store shelves, Kellogg’s released “Fruit Scones.” They were fast renamed Pop-Tarts after the popular pop art movement of that era.

Pop-Tarts turned out to be a hit. In 1967, Kellogg’s added frosting that didn’t melt in the toaster and additional complementary flavors original 4 – blueberry, strawberry, brown sugar, cinnamon and apple, currant.

What about Post’s village squares? In 1965 the name was modified to Toast’ Pop Ups, and in 1971 the brand was sold to Schulze&Burch Biscuit Co.currently the world’s largest supplier of store brand toasters.

In a nod to this history, the Pop-Tarts website states, “Others may have tried making toaster dough, but only one has ever perfected it.”

Although the first mover may have an advantage, the quick follower often wins the game in the future.