Food Industry Focus

Dec. 21, 2004
Cereal makers' subtlety infiltrating snack and dinner markets.

Cereal isn't just for breakfast anymore. Increasingly, U.S. consumers are sneaking bowls of cereal for -- gasp! -- dinner, lunch, and late-night snacks, according to market studies. Anyone who has lived in a home with teenage boys in the last 20 to 30 years easily can attest to that. Teen boys eat cereal like babies drink milk. They consume it before school, after school, for dinner, after dinner, for snacks, or just because it's there. And often it's not just a bowl or two but the entire box. And it's not just boys. What parent can't admit to offering Cheerios, Frosted Flakes, or Froot Loops for dinner at least once this year? In the last five years, the percentage of households that report eating cereal for meals other than breakfast has risen 4% to 10%, according to a proprietary marketing study done for Kraft Food Cos., according to a source. Those kinds of numbers don't dictate huge marketing budgets, but they do represent an opportunity for a category that is as saturated as, well, soggy flakes. Consider this: Based on that 4% increase over five years, it can be argued that snacking -- or even dining -- on a bowl of Cap'n Crunch between noon and midnight has kept the food category from a more serious decline. In recent four-week data compiled by market research firm Information Resources Inc., cold-cereal sales were up 1% over the same period a year ago. That's good news, too. That gain is the second consecutive one, helping reverse a 13-month decline in cold-cereal consumption. Now, cereal companies -- desperate to fatten sales -- are starting to recognize the obvious. Kellogg Co. sells Breakfast Mates, a package of cereal with milk and a spoon. It's easy to pick for a quick breakfast, lunch, or dinner. The nation's No. 1 cereal maker also packages Apple Jacks, Cocoa Krispies, and other brands in lunch-box-ready bags. Ditto for General Mills Inc. Nearly every cereal brand can now be found in individual cereal boxes -- perforated to open and add milk -- in convenience stores, as well as grocers. And then there are line extensions. Rice Krispies has all but become its own separate food category. Rice Krispie Treats, which now come in different flavors such as peanut butter or chocolate chip, are becoming as ubiquitous as Hershey's candy. Quaker Oats Co. continually tests Cap'n Crunch extensions with its own Cap'n Crunch Treat. And Chex cereals have long prompted consumers to eat the squares in its popular salty snack, Chex Mix. "We don't tell people when to eat cereal," says Quaker Oats spokesman Mark Dollins. "We just tell people to eat it." Though Kellogg's ads for its new Raisin Bran Crunch cereal announce that "breakfast is back," company spokeswoman Chris Urban says the company clearly considers cereal as an all-day treat. "Certain cereals are just good snacks," she notes. "How many times do you see kids just shoving Froot Loops into their mouths?" Actually advertising Froot Loops as a snack or for dinner, however, would clearly be -- dare we say it -- out-of-the-box marketing. Imagine the commercial where the kids choose cereal for dinner over pizza because it's quicker to make. Or better yet, pitting cereal -- with its crunch factor -- against Campbell Soups. More important, some argue, overt marketing such as that would be financially wasteful. "I don't think there would be a good return on investment," says a food industry analyst. "It's not that big of a market." But even Albert admits to the occasional bowl of cereal for dinner. "It's good for you," he says. That's the message every cereal maker should tout, Albert insists. "Nutritional news is one of the biggest assets that the product has going for it," he says. "People don't get enough milk or enough vitamins . . . ."

Jennifer Waters writes on the food industry for BridgeNews.

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