Giant looks to star power in the cereal aisle

Dive Brief:

Giant Food has unveiled an exclusive collaboration with Washington Capitals captain Alex Ovechkin for a limited release of Ovi' O's cereal, according to a press release.
The honey nut cereal will be priced at $2.69 for a 12.25-ounce box and will be available while supplies last starting Sept. 17, which coincides with Ovechkin's birthday.
The cereal also connects to an augmented reality hockey game, which customers can access by scanning their cereal box into Snapchat.

Dive Insight:

Retailers have a history of turning to athlete-endorsed cereals, with recent partnerships including Hy-Vee and NFL quarterback Patrick Mahomes and H-E-B with NBA star Tim Duncan to release Slam Duncan O's. The New England Patriots' Rob Gronkowski launched Gronk Flakes in 2012 at Stop & Shop stores, and Peyton Manning participated in the trend with his Peyton O's. Wheaties is perhaps the most iconic in the celebrity-backed cereal world, with its famous orange box bearing images of sports greats like Michael Jordan and Wayne Gretzky.

Athlete product endorsements are a powerful tool, giving most companies a 0.25% average stock return increase when they announce a deal with a prominent athlete, according to the Journal of Advertising Research. Sales for the product also typically rise an average of 4%, providing about $10 million in extra sales annually.

Cereal sales have declined in the last few years, decreasing 17% from 2009 to 2016 and seeing a drop from about $8.8 million in sales in 2016 to $8.3 billion last year, according to Nielsen data provided to Food Dive. In the struggling cereal segment, an athlete endorsement could restore the product's place at the breakfast table. An exclusive product like Ovi' O's can also be a draw for shoppers to choose one retailer over another, especially in crowded markets like the Washington D.C. metro area, where Giant operates.

Ovechkin has several other partnerships with prominent companies like Nike, Beats and Fanatics, with recent endorsement deals earning him around $4.5 million in 2018. Ovechkin may be a safe bet for cereal, requiring far less investment for a deal than other star athletes. LeBron James, for example, amassed $54 million in yearly endorsement earnings last year and is rumored to have a lifetime deal with Nike valued at over $1 billion, while tennis star Roger Federer clocked in at $65 million for endorsements.