The breakfast cereal group Kellogs has signalled in the past week how much power it had lost in recent years to the giant supermarket chains. In past decades, the supermarkets had to do the bidding of food manufacturers like Kellogs to ensure their stores were supplied with products that attracted customers. Now though, consumers trust the big supermarket brands as much as the established ones.

Supermarkets have also exploited their power over a store's layout to induce more customers to go for their own-label goods. In response to this, Kellog's now says it will produce breakfast cereals for Germany's discount chain Aldi, to be sold under the retailers own label.

A different recipe will be used from Kellog's branded products. Even so, it is a significant break from a long-standing policy.

Cereal packets sold in Britain still say: "If you don't see Kellog's on the box it isn't Kellog's in the box." Martin Webber

Of course, Kellog's has not been helped by the fact that fewer and fewer people actually sit down in the morning at home and devour a bowl of cereal and milk.

Pam Robertson, of the consultants Brandsmiths, thinks Kellog's move to produce for someone else is a mistake, driven by its desire to make use of idle manufacturing capacity.

"They've got such a strong brand, and a brand that represents so many different things that we believe they could have gone into new market areas. It wouldn't necessarily have filled production, but we think that, with the strength of their brand, they should have kept going in that direction, extending the brand into new areas that actually represented a much stronger flavour of what the brand represents, rather than continuing to make just a variation on a theme in terms of cereals.

And if you look at their brand, we would say, what does sunshine represent? Sunshine has been strongly associated with the Kellogg brand. Does it only have to be breakfast cereals? Could it not be other things? Could it not be other occasions? One has to think that maybe they've considered these things. But at the end, filling the production capacity has been more important than actually extending into new, perhaps riskier markets with the brand."

I think this could inflict real damage on Kellogs because consumers really believed that anything that didn't have Kelloggs on it, wasn't Kelloggs, and therefore there was something special about this brand. Now that is being undermined. Pam Robertson