For risk-shy investors ducking into the pantry section of consumer staples, cereal king Kellogg (NYSE:K) is a natural idea. But food producers don't guarantee a safe investment; meat mavens Smithfield (NYSE:SFD) and Tyson (NYSE:TSN) have both posted negative average operating cash flow growth over the past five years. So with caution in mind, let's see whether the home of Tony the Tiger has earned its stripes.

As any cash-strapped college student can tell you, cereal is a relatively cheap and easy breakfast. When necessary, it can also double as lunch, dinner, and midnight snack. With many consumers feeling exactly that kind of pinch, Kellogg's status as the world's leading cereal maker looks like a decoder ring for profits.

Not surprisingly, the company's global cereal volume increased about 1% in first-quarter 2009, and management expects good growth from the category going forward. Describing its cereal prospects, rival General Mills (NYSE:GIS) recently endorsed that upbeat take by attesting that "Industry growth in 2009 was the best we've seen in 14 years ... And despite all that growth cereal is still consumed by only a third of all breakfast occasions."

Kellogg's supermarket clout notwithstanding, the company does lag peers in certain areas. Sales growth in the Asia/Pacific region -- home to an expanding consumer class increasingly important to American companies -- appears to be several percentage points behind that of General Mills. In addition, H.J. Heinz (NYSE:HNZ) shareholders have benefitted from a faster-growing dividend in the past five years.

Looking forward, however, one could argue that Kellogg is serving up a bowl full of optimism. Management has made notable marketing tweaks, updating classic kids' brands with parent appeal (touting the fiber in Apple Jacks, for example). Yet its biggest single opportunity to boost financial results is K-Lean -- a plan to cut $1 billion in costs by 2011. In 2009 alone, that could translate to about $0.50 in earnings per share.

That said, don't go Froot-Loopy with excitement just yet. The expected cost of achieving those savings is as high as $0.22 per share. Including negative currency effects, 2009 EPS could be flat with 2008. Management sees similar K-Lean expenses in 2010, all of which means that the initiative's full benefit likely won't be realized for several years.

Then, of course, there's the breakfast-table competition. General Mills is a natural rival, but so is Ralcorp (NYSE:RAH), which owns the Post cereal portfolio. Yet the more immediate threat may come from private-label brands, which are growing especially fast in the incremental, or promotional sales, category. Finally, there's always the risk of another peanut recall in the future, which hurt Kellogg's snack business earlier in the year and contributed to gross margin compression.

Finally, while Kellogg's Keebler cookies line invites risk, should Oprah and Dr. Oz turn consumers against elf-made desserts, companies such as Sara Lee (NYSE:SLE) are the more likely victims of a sudden renewed craze for fat-free foods.  

When it comes down to ordering up shares, I suspect that investors are most interested in whether they should dig into General Mills or Kellogg. In part, that decision depends on time horizon. Unlike the flat results that Kellogg may report this year, General Mills sees 6%-7% EPS growth in its current fiscal year, even with negative currency movements. A few years down the road, however, Kellogg's productivity gains may produce faster earnings growth.

In the meantime, I am slightly partial to General Mills, thanks to its diversity in major food categories and its slightly higher dividend yield. Given the recent appreciation in Kellogg shares and the noted risks, Tony definitely looks Goo-ood, but he may perhaps be a stripe or two short of Gr-r-reat.

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Fool contributor Mike Pienciak is full of granola, in more ways than one. He does not own shares of any company mentioned. The Fool has a disclosure policy.