"Big food" companies fight to keep cereal afloat

Americans spend $10 billion on cereal each year, but sales have been on a steady decline over the last 15 years amid the country's changing eating habits and new breakfast food competition.

Fortune assistant managing editor Leigh Gallagher said "big food" is "under attack."

"They are seeing the most disruptive time that they have ever experienced in 40, 50 years," Gallagher said Thursday on "CBS This Morning."

In contrast, sales of packaged foods labeled "natural" rose 11.7 percent to about $23 billion last year, and those labeled "organic," some of which also are labeled "natural," rose 14.7 percent to about $9 billion, according to Nielsen.

"You see it everywhere you go; everyone is obsessed with organic, natural, fresh, wholesome. And this is happening in the supermarkets, it's happening at the restaurant chains, it's happening at the meat-processing plants," Gallagher said.

In an effort to boost their soggy sales, Kellogg's has launched Kellogg's Origins, a range of cereals, muesli, and granolas.

"A very big move, and a somewhat, I don't want to say desperate, but really sorely needed one," she said.

The breakfast giant saw cereal sales slump 4 percent last year. Gallagher said last year, the century-old company saw its worst profit it over a decade.

Kellogg's Origins is not the first organic cereal the company has put its name on, though. In 2000, it bought California-based Kashi.

Gallagher said Kashi thrived for about seven years until "they started getting their hands into it." Then, sales dropped from $600 million in 2008 to $500 million in 2014.

"The sort of painfully ironic thing about this for Kellogg's is that they were way ahead of the game when they bought Kashi," Gallagher said.

Other companies are also looking for fresh ways to get consumers to reach for their products on supermarket shelves.

General Mills is choosing more natural ingredients in Chex, and their popular Cheerios is now gluten-free.