Progressive Grocer

AUG 2015

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Indeed, signs point to an RTEC renaissance: Dollar sales have continued to improve during the past year, 6 and many retailers are growing again in this category. 7 Tis is great news for retailers because the RTEC cate- gory is a driver of both total retailer dollars and trafc to the store. 8 RTEC is found in shoppers' baskets on 14 percent of grocery trips, and the total ring is $44 higher when cereal is in the basket. 9 Because of its strong turns and reach, RTEC is one of the most proftable categories within center store (coming in at 11 out of 127 catego- ries) 10 and the second most productive among break- fast-related categories. 11 In the breakfast foods category, cereal is No. 1 in unit sales, trips, repeat purchase rate and household penetration. 12 Other center store cate- gories that have low value and frequency in basket and tend to be over spaced include baking mixes, desserts/ gelatins, canned fruit, and jams/jellies/spreads. 13 Simply put, RTEC is a powerhouse category. Best of all, there's still room for retailers to better know–and fur- ther grow–the category. Let's take a comprehensive look at RTEC today: what, when and how the cereal consum- er eats, a walk along the path to purchase, plus plenty of opportunities for retailers to boost sales and store trafc while exciting and delighting cereal fans. RTEC category basics Cereal is both a well-loved classic and an evolving cat- egory, facing new challenges, welcoming new segments and embracing new opportunities. For many Americans, no grocery cart is complete without a box or two of their favorite cereal. Few foods are as fundamental to shoppers' grocery lists: In fact, 89 percent of shoppers who purchased cereal had planned to buy something in the category as they entered the store. 14 Combined with the high penetration rate of the RTEC category, it is clear that RTEC is a destination category 15 and a trip and aisle trafc driver for U.S. retailers—a go-to leg in any well-prepared grocery shopper's plan of attack. In the decision tree, the frst thing shoppers decide at the shelf is whether they want a mainstream brand or a natural/organic product, followed by secondary decisions about kid appeal, all-family appeal, simple health and value. 16 Nutrition matters too: Consumers look for calcium, protein, fber and whole grains in their packaged foods, 17 and cereal delivers on all these fronts– especially fber, which only 5 percent of Americans 18 get in recommended amounts. More than 60 percent of Kellogg's cereals, for example, ofer a good or excellent source of fber. In addition, RTEC actually accounts for less than 4 percent of added sugar intake in the United States. 19 While whole grains are an important part of a healthy diet, they're not the whole story. Te enriched refned grains found in RTEC provide a key plant source of iron, folic acid and B vitamins, nutrients that many Americans are lacking. Meanwhile, manufacturers have been working hard to make kids' cereals healthier than ever, with less sugar and more fber than in the past. 20 No wonder children who eat cereal for breakfast tend to have lower BMIs (body mass index) and a lower inci- dence of obesity than children who skip their morning meal. 21 2 R T E C A N D H I G H E R C E N T E R S T O R E S A L E S

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