Ready-to-eat (RTE) cereal in the U.S. is a $7.7 billion business.
The top three players share nearly 75% of the market, but private label
continues to gain. And the reason isn’t just lower price. Packaging now
provides a point of differentiation and, possibly, preference.
reclosable canister for its Archer Farms brand is shaking up the RTE cereal
market, which has been firmly entrenched in bag-in-box for decades. Target
touts the foil-sealed package as a “bag-free container.” The easy-flow spout
with snap-shut reclosable lid controls dispensing and helps maintain freshness.
Introduced in April 2008, the oblong-shaped paperboard canister measures 10
inches tall by 2.5 inches deep for convenient storage in consumers’ pantries.
Available in 18 flavors priced from $3.49 to $3.99, the canister holds from
10.5 to 25.75 ounces of product, depending on the variety.
1. Kellogg Co.
cereal leader continues its focus on innovation, spending $40 million on an addition
to its R&D facility and introducing a host of new products. Last month,
Kellogg expanded its line of Grab’n Go cereal packs with a third variety,
Frosted Flakes. Grab’n Go Corn Pops and Fruit Loops launched in January.
Laser-scored, easy-open pouches contain 70, 80 or 90 calories of cereal,
depending on the variety.
2. General Mills Inc.
higher prices for grain and other raw materials, General Mills saw a 2% sales
increase in 2007 for its Big G cereals (now all whole-grain). The Cheerios
franchise alone accounted for 12% of ready-to-eat cereal category sales in
fiscal 2007, making it the best-selling cereal brand in the U.S. New
flavors, as well as new packs, keep Cheerios fresh with consumers. For example,
introduced in early 2007, the Tot Pack canister features a flip-top aperture
for pouring and a teardrop-shaped one for one-at-a-time dispensing to
facilitate use as “finger food” for toddlers.
3. Kraft Foods Inc.
major development in the cereal category is Kraft’s sale of Post to Ralcorp, a
maker of private-label cereals and other foods. Announced at the end of 2007,
the deal was expected to have been finalized in mid-2008 but was still pending
as of early June. Post had more than $1 billion in sales in both 2006 and 2007,
but PepsiCo’s Quaker division is nipping at its heels for the No. 3 spot.