Marketing Case Study: A Sweet Breakfast Memory that Connects with the Wrong Market

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A Sweet Breakfast Memory That Connects

With the Wrong Market

By JOHN GROSSMANNNOV. 12, 2014

Christopher Pouy founded Cow Wow Cereal Milk to capitalize on a taste he loved as a child:

cereal-infused milk. Credit Annie Tritt for The New York Times.

COW WOW CEREAL MILK is a two-year-old company that makes milk in breakfast cereal

flavors. Founded by Christopher Pouy, a former advertising copywriter seeking to capitalize on a

childhood love, it is based in Los Angeles and employs 10. By putting a child-friendly cow on

the package and giving his flavors names like Fruity Trudy and Chocolate Chip Cathy, Mr. Pouy

branded his product for 5- to 12-year-olds.

THE CHALLENGE Targeting the right customers. Following unexpected publicity from media

outlets and promising sales on a college campus, Mr. Pouy found himself second-guessing his

audience — even though he knew that to sell to high schoolers and college students, he would

have to rethink his whole brand.

THE BACKGROUND Schooled in the advertising business at Secret Weapon Marketing, the

company that linked a pink bunny to Energizer batteries, Mr. Pouy, 38, worked at big ad

agencies and ran his own shop called Chicken Pox — “to spread ideas virally” — for more than

a decade. Then his enthusiasm dwindled. “I’d done the same kind of projects so long, I was no

longer getting the gratification,” he said. “I wanted to create something I had a stake in and

reignite the passion and excitement.”

Mr. Pouy asked himself: “What can I make that’s not already out there? What would I like?”

Those questions led him back to his childhood breakfast table, where the best part of his morning

cereal came when he put down his spoon, lifted the bowl to his lips and gulped the remaining

milk infused with the flavor of Froot Loops or Cocoa Puffs.

Why not give children a more exciting, vibrant range of flavored milk than the Neapolitan palate

of chocolate, vanilla and strawberry? Knowing he’d be selling to parents and wanting to “do it in

a responsible way,” Mr. Pouy insisted on 1 percent organic milk, no artificial flavors or colors,

and organic cocoa powder and cinnamon. With six grams of added cane sugar, each 8.5-ounce

serving had 150 calories. For packaging, he chose Tetra Paks that did not need refrigeration and

had a shelf life of up to a year.

With $175,000 of his own money, he made his first 9,000 cases in late 2012. A distributor landed

some of his milk in convenience stores and gas stations in Southern California, and Mr. Pouy got

Cow Wow into Legoland and the Los Angeles Zoo. Then, in April 2013, with the product still in

limited local distribution, Cow Wow went viral, much to Mr. Pouy’s surprise and joy — at least

initially.

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Proclaiming that Cow Wow “tastes like heaven,” the late-night TV host Jimmy Kimmel riffed on

the product for nearly a minute. “Just when the Twinkie dies, we come up with cereal-flavored

milk. I’ve never been prouder to be an American,” he said. In June 2013, Cosmopolitan

magazine displayed the Fruity Trudy package and hailed Cow Wow as the lead “fun item” in a

list of fun stuff. And in September 2013, BuzzFeed included Cow Wow in its list “27 Reasons

It’s the Greatest Time to Be Alive.”

It was great publicity. But there was one problem: the age of the viewers and readers. Mr. Pouy

said he quickly realized “these are not the people I’m trying to sell my product to.” That

disconnect nagged at him as he began talks with an investor, the owner of an incubator, who

would ultimately acquire a majority stake in Cow Wow and become a silent partner, leaving Mr.

Pouy as president.

By November 2013, still aimed at children, Cow Wow was being put on shelves in the first of

900 Kroger supermarkets. Because Mr. Pouy lacked the resources to offer discounts and

coupons, his milk was priced about 20 cents higher than flavored milks in Tetra Paks offered by

Organic Valley and Horizon Organic. His sales did not meet expectations. “I was groomed on

the more conceptual, marketing side of things, not on pricing or how to enter a market,” Mr.

Pouy said. “What I found out was, Mom is the most frugal shopper of them all, and price made

more of a difference than I thought it would.”

Our columnist Andrew Ross Sorkin and his Times colleagues help you make sense of major

business and policy headlines — and the power-brokers who shape them.

Then in May his local distributor, who happened to serve Santa Monica College as well, got Cow

Wow into the school’s food court. Fifteen cases sold in the first week. The next week, Mr. Pouy

stood near his product and watched. “Pretending to be a teacher, I saw people taking all three

flavors,” including the new Cinny Minny, he said, “and that’s all they bought.”

THE OPTIONS Two days later, he met with his partner to discuss three possible paths:

■ Stay the course. Stick with young children, who are, by far, the biggest consumers of milk.

This option was appealing because high schoolers and college students are notoriously fickle.

What if Cow Wow was a fad? To pursue this option, Mr. Pouy’s next step would be to target

private and charter schools and expand national sales in Kroger and other grocery stores with a

marketing push to educate mothers about the benefits of flavored milk and alert children to Cow

Wow’s flavors. The expected cost: $100,000.

■ Change course. Follow the buzz and the sales and pitch the product to millennials. To pursue

this option, Mr. Pouy would rebrand, redesign, repackage and reformulate. He would try to hook

18- to 35-year-olds with hipper cows and a larger package with a resealable cap instead of a

straw. To cut costs, he would switch to a nonorganic formula, “since millennials are less

concerned about nutrition than mothers.” He would focus on selling to colleges and convenience

stores. Cost: $100,000.

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■ Adopt a hybrid strategy. Try to market to both age groups simultaneously. To pursue this

option, Mr. Pouy would need to create two distinct marketing campaigns, one targeting mothers,

the other millennials. With little overlap, the cost would double to $200,000.

WHAT OTHERS SAY Seth Goldman, co-founder and chief executive of Honest Tea: “At 150

calories per 8.5 ounces — roughly 50 percent more calories than low-fat milk — this isn’t a

product that should be marketed to kids. Mr. Pouy is better off promoting his drink toward the

millennials that are already gravitating toward his drinks. He should invest in field marketing

efforts on campuses where students can enjoy the drinks as an occasional chance to reconnect

with their childhood.”

Kara Goldin, founder and chief executive of Hint, a brand of flavored water: “I recommend

focusing on a single target market. A cereal-flavored milk for the college market? I doubt it. But

if that is your market, move out of the Tetra boxes and into a wide-mouth resealable bottle. And

millennials young and old do care about ingredients, not just calories. And don’t settle for just

any space in the stores you get into. If moms are your market, be where moms will look in the

store. In the milk section is O.K., but how about in the cereal aisle? Or in the baby/kid food

section?”

Doug Hall, founder and chief executive of Eureka Ranch, a consulting firm that helps companies

create innovative products: “My advice is to stop being greedy. You have found a group of

people who love Cow Wow. Focus 100 percent of your energy on millennials. Our research has

found that presweetened cereals would have a hard time being introduced today. They exist only

because they are ‘grandfathered in’ through the memories of older people. Let millennials adopt

and own it. Then let diffusion of the innovation pull the product to the mass market.”

THE RESULTS Offer your thoughts on the You’re the Boss blog at nytimes.com/boss. Next

week, on the blog and on this page, we will provide an update on what Mr. Pouy decided to do.