Kellogg Chastises Phelps

The company confirmed the decision via e-mail this evening: “Michael’s most recent behavior is not consistent with the image of Kellogg. His contract expires at the end of February and we have made a decision not to extend his contract,” Kellogg rep Susanne Norwitz wrote.

Phelps appeared on special-edition boxes of Kellogg’s Frosted Flakes, Corn Flakes and Rice Krispies Treats Marshmallow Squares following his winning streak at the Beijing Olympics last year. The Olympic gold medalist has been in the hot seat since news reports about him smoking marijuana first appeared in Sunday’s edition of the News of the World, a British tabloid.

Kellogg said the move follows the company’s decision not renew its Olympic Team sponsorship, which ended in December. “We originally built the relationship with Michael, as well as the other Olympic athletes, to support our association with the U.S. Olympic team,” Norwitz said.

Speedo and Omega watches have rallied in support of the athlete while others, including Subway and AT&T, have remained mum.

Kevin Adler, founder of Engage Marketing, a sports-marketing firm in Chicago, said Kellogg’s decision comes as no surprise. While others may not have gone public in their stance towards Phelps, it’s imperative that Kellogg do so because, after all, the cereal maker is heavily perceived as a kids’ brand, he said.

“Athletes are brands. That’s the most important umbrella concept we have to understand is if you do something that runs contrary to your brand image, it will affect your ability to monetize that brand image. It really kind of is that simple,” said Adler.

While other advertisers may follow suit, Adler said it’s also possible Phelps’ remaining sponsors will keep Phelps-related marketing initiatives under the radar for now, and amp up efforts as 2012 approaches. If anything, history is an indication that “people seem to have a very short memory of transgressions from athletes who perform well on the field of play.”