Progressive Grocer

FEB 2017

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58 | Progressive Grocer | Ahead of What's Next | February 2017 Grocery Cereal cereal, also launched in January. For her part, Fisher is highly opti- mistic about the category's long-term outlook, perhaps because, as she points out, Post "is the only cereal company to show growth in the category over the past 52 weeks. is is a result of our commit- ment to taste and our focus on marketing and merchandising fundamentals. "We don't believe cereal is boring, and retail- ers shouldn't either," she continues. "Breakfast food is a huge category, representing over $50 billion in sales, and is a significant business driver for retailers. Cereal is also the second-largest breakfast category behind fruit and one of the most economical break- fast options available to consumers. Additionally, research shows that when ready-to-eat cereals are in the grocery cart, the average cost of all groceries is $94.64, versus $46.54 when cereal is not in the cart — an increase of 103 percent, according to Nielsen Home Panel information. When shoppers stock up on their weekly must-haves, cereal is a go-to item that leads to additional purchases." More Ways to Go To counter the cereal category's current overall lack of momentum, AFB's Cabassa points out that, as well as focusing on health, savvy super- market operators "are exploring and offering an expanded selection of products and increas- ing promotional activity to deliver not only the products [shoppers] are looking for, but also at a value." He further recommends "segmentation of the category in print and media." Additionally, for many cereal makers, selling strategies revolve around cereal's versatility as an anytime snack or meal, or even as a recipe ingredient. "We are seeing the trend of cereal being con- sumed at various times outside of breakfast," notes General Mills' Prucha. "It can be a snack, as well as a different dessert option, and we have some marketing that focuses on this." "We've received lots of interest from consumers about unique recipes that mix our cereals and other healthy foods to make great-tasting and nutritious snacks, so we've been incorporating more and more recipe- based content into our marketing strategies," says Barbara's Kenny. Literally thinking outside the box is anoth- er smart move. "One of our best strategies with cereals is to offer them in single-serve bags," observes Kazemzadeh. "is gives the customer a chance to try the product at low cost. Once they become fans, they switch to the larger box." Additionally, Kay's has updated its packaging to make it "fresher and more appealing," she explains. Despite her upbeat view of the category, Fisher be- lieves grocers can still increase their odds of spectacu- lar sales. "To be successful in cereal, smart retailers will seek to optimize their shelf sets to 'fix the mix' for their consumers and their neighborhoods, and provide the right products at competitive and everyday promotion- al prices," she notes. "As the only major cereal company 100 percent vested in cereal, Post Consumer Brands is increasing investment in the category, including advertising and consumer promotions on our core best-selling brands. We're also making changes to our merchandising and packaging to improve consumer appeal and shopability. With the broadest portfolio of cereals spanning all segments of the category, we're uniquely positioned to help [grocers] create the mix that works for each of our customers." New and Exciting Speaking of cereal offerings, Cabassa suggests that retailers adopt "innovative product introduction," since, as he asserts, "innovation is the constant which keeps consumers engaged in the product." In an effort "to bring the category back to growth," Prucha also stresses new product develop- ment: "It is important to bring news to the cereal aisle, and we have focused on product innovation and renovation to keep the category relevant." Fisher, too, agrees on the importance of new products, observing: "We believe the key to success- ful innovation that will actually grow the category is to offer the right product at the right price for the right consumer. … Because taste is king in the ce- real aisle, we'll continue to invest in taste improve- ments across our portfolio where it makes sense and will increase consumer appeal." Even with all of the emphasis on novelty, how- ever, a large contingent of shoppers will always want their old standbys close at hand. Cabassa acknowl- edges that, for many consumers, "there is nothing better than just dropping back to your favorite [cereal]. at's what makes us all unique." PG Innovation is the constant which keeps consumers engaged in the product." —Dan Cabassa, America's Food Basket To learn the latest about the cereal bar category, visit Cr EATI v E P EBB l E s Fans of Post Cinnamon Pebbles can use them to coat doughnuts for a fun breakfast treat.

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