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- VERTICAL MARKETS
Cereal represents a large and enduring food staple. Euromonitor Int’l pegs U.S. sales for breakfast cereals at $1.025 billion for 2009, a figure that the firm forecasts to grow 11% through 2014 to reach $1.075 billion. Although packaged cereals have been around for some 150 years, consumers still aren’t bowled over by its convenience.
According to Mona Doyle, CEO of The Consumer Network Inc., ready-to-eat (RTE) cereal packaging received mediocre ratings in the organization’s recently completed 2009 Packaging Report Card survey. She says cereal packaging earned multiple mentions in the study’s “packaging I dislike” category and zero mentions in the “packaging I like.”
It may come as some consolation that brand owners continue to adjust cereal packaging and its messaging to zero in on a sweet spot with consumers. It’s a target that has taken on a decidedly green hue in this era of eco-consciousness and sustainability.
It’s also a phenomenon that has caught up with a source-reduced package format that one manufacturer has offered for several decades: bagged cereal. That company is Malt-O-Meal, Minneapolis, Minn., which claims 10 of the top 50 selling cereals by volume, according to 2009 Nielsen data. The company’s bagged cereals, shelved next to the nationally branded competition packaged in traditional cereal boxes, offer a sharp point of difference, particularly in an environmentally aware time.
“We’re pleased that major retailers are engaged with manufacturers to improve sustainability metrics and reduce packaging waste,” says Paul Reppenhagen, Malt-O-Meal’s director of customer marketing. “This is a very positive trend in the industry.”
Hoisting a green flagIt’s obviously a highly fortuitous one for Malt-O-Meal, which began to leverage its “newfound” enviro-benefit packaging advantage starting in late 2008 by adding printed violators to its laminated bags. For instance, its Tootie Fruities cereal boasts “75% less packaging than Froot Loops boxed cereal.” Similar violators appear on bags of its alternatives to familiar national brands.
“Our consumer marketing has historically focused on our cereals’ great taste and high quality, and on saving families money,” Reppenhagen says. “When research confirmed that 60% of U.S. households have ‘green intentions,’ it made sense that we should call their attention to the environmental benefits of bag packaging compared to a box with a bag inside. It’s one more great reason for consumers to choose Malt-O-Meal brand cereals.”
It’s also a message the company will aggressively push, according to company spokesperson Linda Fisher: “We’re going to be more assertive about promoting that along with consumer education.”
However, it’s not all about being sustainable: The company’s packaging was made more convenient years before the greenness was ever touted. Since 2000, after seeking a way to reseal the packages and maintain freshness more reliably than pressure-sensitive labels, Malt-O-Meal implemented Zip-Pak’s Press-to-Close zipper to span the entire top of the bag. It’s a feature that also incorporates the benefits of a pour-spout design.
Still, Malt-O-Meal intends to further improve the sustainability of its packaging, even after consumers finish off a bag. That’s through a partnership with TerraCycle to reuse and “upcycle” the bags-collected by volunteer brigades-into new products.
“We like the TerraCycle program because it further supports our sustainability commitment,” Reppenhagen says. “Every ‘upcycled’ cereal bag reduces the post-consumption packaging waste to zero.”
“We have more than 850 participating brigades,” Fisher says. “It’s one of TerraCycle’s most successful recruitment campaigns.”
From bags to cupsDifferentiation is a relative thing, a fact that compelled another cereal maker to move out of bagged product. GrandyOats, Brownfield, Maine, operates in the organic cereals market where, unlike mainstream cereals, a bagged or even stand-up format is commonplace. Last fall, GrandyOats replaced its plastic pouch cereal packaging with eco-friendly, yogurt cup-style containers from Polytainers, made from reusable, recyclable, dishwasher-safe polypropylene. GrandyOats acknowledges that for areas where PP is not recycled by municipalities, the cups are accepted in recycling bins at Whole Foods Markets nationwide.
“We really like the concept of reusable and recyclable packaging,” says Aaron Anker, chief granola officer. “It is a bit more expensive, but we feel it is a higher quality container. [Because] we are the only all-organic granola company, it helps our high-quality products to stand out from the rest of the granola brands.”
The response from retailers and consumers has been great, according to company spokesperson Tina Burford: “The containers stack easily, they stand out from competitors, and are much easier to use for customers than a stand-up pouch.” A 13-ounce container sells for $4.99.
Mainstream boxed cereal companies seek ways to improve their packaging, too. As was reported in our November-December cover feature, Kellogg’s concluded a 2009 market test that offered consumers an alternative to the conventional cereal carton. The carton is shorter and wider than the norm to save 8% of the carton material, yet it contains the same amount of cereal.
The company provided an update about the packaging in late 2009. “We learned much from the tests,” says Susanne Norwitz, Kellogg’s director of brand public relations. “However, the results did not warrant a national rollout of these specific package designs.”
No cereal roundup would be complete without noting the category-busting rounded canisters from Sonoco Products Co. that Target, Minneapolis, Minn., introduced for its Archer Farms cereals in 2008 that garnered a lot of attention and several awards. One thing that the breakout format demonstrates is the formidable package design that a private label brand can bring to bear in the cereal aisle. However, a complaint that Doyle relays about that product: “The package looked great, but the price blew me away.”
Whether consumers will be blown away in a positive way by any cereal packaging developments remains to be seen, but until then brand owners will continue to innovate, even if it takes another 150 years. F&BP
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Sonoco Products Co.