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Cereals branching out of pantry aisles


The cereal category is undergoing a quiet revolution as demand becomes both more fragmented and more exacting and as both vendors and retailers look beyond the cereal aisle for new opportunities.

Kellogg Co. is taking a leadership position in expanding the definition of what cereal for breakfast means by expanding both its brands and products. The company has taken advantage of the proliferation of sites where breakfast food is offered.

Today, cereal is often available both in the traditional aisle and in natural food sections. Products offered in the distinct sections may have varied originally, but, for example, whole grain variations on traditional cereals—including Kellogg’s Special K—have helped blur distinctions. Kellogg also has developed snack packs and food bars under the Special K umbrella. Now it seems an opportunity has established Special K as a growing presence in store pharmacy/HBA/OTC sections. Kellogg is positioning All Bran as its next entree into pharmacy.

“The Kellogg Co. sees this shift to preventative consumption as a great opportunity to provide the consumer with products that help them conveniently meet their needs,” said Joseph Mueller, vp of sales for morning foods and health and wellness. “In 2006, the Special K brand first entered the health-and-nutrition aisles. It will soon be joined by All-Bran Fiber Bars and All-Bran Drink Mix, which began shipping to retailers in February. These new All-Bran products are intended to offer the consumer more options to consume the appropriate amount of fiber for their diets.”

The Nielsen Co. reports that, among the food, drug and mass retailers in its universe, cereal dollar sales were essentially flat last year, but breakfast bars were up 12.3%.

Unsurprisingly, food retailers have been building on the wellness-oriented opportunities vendors such as Kellogg have helped open up, both with national brands and with private labels. Wal-Mart may stick closer to the basics in cold cereal—Great Value raisin bran is frequently installed alongside private label rice and corn items—but it is aware of obesity and diabetes maintenance needs among its shoppers and offers a sugar-free variety of its Maple and Brown Sugar instant oatmeal, even at discount stores.

Target similarly places an emphasis on wellness in hot cereals with Archer Farms Organic Multi-Grain and Blueberry Almond Instant Oatmeal available at discount stores, too, including at a College Point, N.Y., store displaying a wide and conspicuously grouped range of cold cereals without a wellness alternative.

Yet, Target followed opportunities out of the cereal section, placing its Market Pantry nutrition bars a shelf above the Special K bars offering in the pharmacy section.

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