I think it's mainly because American's (really everyone) is getting savvier about health. 20 years ago, Kellogs could have convinced the public that their cereal were actually healthy through TV ads and such. But now with the internet it's impossible to convince anyone because the facts about sugar are out there and people are changing their behaviors.
If I had to make a bet I'd say in the next decade of so, Kellogs and other cereal manufacturers will kill off most of their cereal brands, keep a few well known brands around, and make a shift to the "healthier cereals" space that's occupied by these smaller players and private labels.
Just today I was shopping for cereals for our kids at French Carrefour. I dont eat it personally, so as usually a bit struggle for a guy in big mall to even find it.
Found normal section, tons of these known brands like Kellogs, when looking at content it was all 17+ grams of pure sugar amd looking very artificially. Huge shelves full of it. Fuck that, I aint going to ruin life of my kids.
Went to bio section of the store, picked up some Carrefour's branded oatmeal with few bits of thin slices of dark chocolate (unfortunately this was requirement), still 10g of sugars IIRC but much more fiber and overall looking more healthy.
Priming from TV ads is still strong, folks buy tons of that crap for their kids thinking how great parents they are (and they drown it with big glass of orange/apple juice, whats better than starting every day with 50g or more of raw sugars when you are 4 years old and weight 20kg).
If I had to make a bet I'd say in the next decade of so, Kellogs and other cereal manufacturers will kill off most of their cereal brands, keep a few well known brands around, and make a shift to the "healthier cereals" space that's occupied by these smaller players and private labels.