Brief:

• Kellogg, the packaged foods brand whose sales fell 2.5% in Q2 2017 from a year earlier, is offering several of its snacks to customers of ride-hailing apps like Uber and Lyft, according to a press release by the company. The service is part of its partnership with Cargo Systems, and makes Pringles, Rice Krispies Treats and Cheez-It crackers available via Cargo Systems consoles in New York and Boston.
• Drivers with consoles by Cargo, which launched in June and give drivers a chance to earn more money by offering customers products like snacks, phone chargers and cosmetics, hand off the Kellogg snacks to passengers using Cargo's mobile website to place an order.
• A quarter of millennials snack at least 4x a day, per a Mintel study. The recent move by Kellogg aims to address this trend by making snacks more accessible while on the go, according to the Kellogg press release.

Insight:

Like soda brands, snack foods need distribution in order to sell effectively to people who will quickly choose another available option to satisfy thirst or hunger. Kellogg has suffered from sales declines and mounting debt as the company struggles to adapt to changing consumer tastes. Ride-hailing car services can potentially become a significant point of sale as passengers let someone else do the driving while they snack and look at mobile devices.

The concept behind Cargo is convenience. Riders have access to products immediately with a few taps on a mobile browser, boosting their experience. For drivers, it's free, and they can earn higher ratings and tips as a result. This presents a unique opportunity for marketers to connect with consumers via in-car products. As one of the few companies that have partnered with Cargo, Kellogg aims to boost its position as consumers' top-of-mind snack brand.

Product marketing and ride-hailing services have already proven to be a winning combination, and Cargo's growing partnerships with brands like Kellogg build on this. For example, a Marc Jacobs' six-hour Uber promotion featuring a free bottle of the brand's Daisy fragrance drove 61 million impressions. Hershey has also seen success with product promotions with Uber.

Cargo aims to offer a win-win-win service for drivers who want to supplement their income, customers interested in impulse products during a ride and marketers who want to reach a captive audience and drive product sampling. Cargo was founded by former employees of Birchbox, the online monthly subscription service that sends customers a box of four to five samples of makeup and beauty products. That means they are familiar with the idea of getting samples of products from major brands that seek to reach new audiences.