Cereals were in the news earlier this summer when Sainsbury’s announced that it was going to start selling its own brand range in recycled plastic bags without the cardboard box in a bid to reduce packaging. However the major manufacturers don’t seem likely to follow – yet.
Kellogg’s reports that its packaging is 100% recyclable where facilities exist and its cereal and cereal bar boxes are made out of 88-90% recycled material. The company’s official statement on packaging reads: “Our foods tend to be delicate flakes so the box, in particular, ensures the food isn’t damaged and, therefore, doesn’t contribute to the high levels of food that European consumers already throw away every day.”
And Nestlé (Cereal Partners) says it believes that to remove the cardboard carton would be detrimental to the quality of its breakfast cereals.
Sami Qayyum, negotiator for grocery products at Bestway Cash and Carry, is not impressed by Sainsbury’s move. He says: “They are trying to earn brownie points by doing their bit for the environment. The fact is that almost all cereal boxes are recyclable and the box performs a protective function for the cereals as these are not consumed all in one go once opened.
“Recession is playing its part too as consumers want to be sure that nothing they buy gets wasted and the boxes allow this very comfortably. Certainly in the wholesale arena these recyclable boxes will be seen for a long time to come.”
Qayyam is very upbeat about the breakfast market: “Suppliers are trying to put the fun back into breakfast time with great tasting cereals and exciting on-pack promotions and if they can make the breakfast experience as enjoyable as possible then fewer people will consider skipping it.
“Limited editions have been hugely popular as consumers are constantly craving innovation. But price is a key factor for them in the current economic climate. Where there are healthy options along with innovation both branded and own label (even better if price-marked) are equally enjoying a fair share of the sales.”
At Nisa-Today’s, Today’s Group trading controller Tazeem Saide reports that Weetabix, Sugar Puffs, Corn Flakes, Rice Krispies, Quaker Oats and Alpen are the best sellers. She adds: “Organic is not working as much as we would like but own label is growing.”
Kellogg’s has made much of the fact that ‘branded is best’ with its on-pack message ‘If it doesn’t says Kellogg’s on the box then it isn’t Kellogg’s in the box’. Kellogg’s boasts being the largest food advertiser in the UK and its Â£78m annual spend means its commercials go out every week of the year.
Chris McLaughlin, head of specialty accounts at Kellogg’s, says 10 of the top 15 selling cereal brands in the market are Kellogg’s. And the company provides category management recommendations for cash and carries and wholesalers to ensure they have the right ranges for their retail customers.
Kellogg’s UK sales director Mike Taylor recently announced that the company is moving from a focus mainly on the multiples to a multi-channel strategy, with impulse a key pillar of that.
He says that about 20-25% of Kellogg’s UK’s business is in impulse and it’s growing at about 30% per year. The company is recruiting a 40-strong field sales team which will be focused on independent retailers and linking with them through cash and carries and delivered wholesalers. It is also setting up an insight panel on impulse and out-of-home to give it better understanding of these channels.
Kellogg’s has introduced smaller pack sizes for independents and also price-marked packs. Plus it reduced the range available through the independent channel, to give clarity and help retailers make the right choice.
In foodservice Kellogg’s is looking to partner wholesalers with field sales to focus on the breakfast opportunity in hospitality. Taylor explains: “Historically there has been a lack of innovation in foodservice but we want to innovate to unlock the area and maximise the cereal opportunity in out-of-home food.”
Meanwhile McLaughlin says Kellogg’s prides itself on understanding its customers and their needs. He says that in cash and carry that means it’s all about making things simple. Retailers have a limited time to shop and want to know what they are stocking is going to sell. Therefore, by improving the quality of the fixture, we make it easier for them to shop. We do this by making our brands more visible.”
The 10 brands Kellogg’s recommends for c-stores are Corn Flakes, Crunchy Nut, Coco Pops, Rice Krispies, Special K, Bran Flakes, Fruit and Nut, Frosties, Special K Red Berries and Variety. He says that value for money has also been at the forefront of Kellogg’s communication and as a result the company currently offers a series of price-marked packs on its top 10 selling brands.
“These packs are margin enhanced to support the convenience sector,” he explains. “We have also reduced our case sizes to give convenience retailers the ability to better manage their stock holding and cash flow while still giving shoppers access to the brands they know and love.”
Promotions are a key part of Kellogg’s convenience store repertoire, and it has tailored its programme to meet the different needs of its wholesale customers. Offers include price downs, link deals and multibuys. As far as individual brands are concerned, Kellogg’s says that its Crunchy Nut has been the big success story of 2009 as consumers look for both quality and great taste.
McLaughlin says: “The convenience sector is of high importance to Crunchy Nut and this has been reflected in the brand’s 2009 TV advertising which depicted a shopper purchasing Crunchy Nut from an independent convenience outlet. This has helped Kellogg’s to communicate the widespread availability of Crunchy Nut within the market place.”
However it is Special K which is Kellogg’s biggest cereal brand. In 2000 there were just two varieties but such is the Â£120m brand’s popularity that 10 are available today. Special K is 50 this year and to celebrate, 100 red swimsuit clad girls (including TV presenter Kirsty Gallacher) posed on London’s Millennium Bridge.
The big brands are definitely the ones to stock according to Graeme Foster, business controller for wholesale/independents at Cereal Partners UK. “New product development (NPD) remains relatively small in relevance terms for the wholesale/convenience area primarily due to convenience store fixture sizes and the need to concentrate on the top sellers.
“The top selling brands currently far outsell current cereal NPD as these established brands are bought everyday by all consumers across all market areas. They should therefore be stocked 100% of the time across all outlets to meet consumers’ requirements and expectations.”
Of course health is a main focus for many consumers but Foster says breakfast cereals fit the health agenda by providing wholesome, nutritious breakfasts at relatively low cost.
“Nestlé Cereals is well placed on the health agenda by offering a range of cereals, all containing whole grain, while also developing the whole grain effect by substantial television advertising and also through the green banner on top of every box,” he explains.
When it comes to trading, Foster says most of his company’s issues with breakfast cereals continue to be range focused. “More often than not retailers don’t maximise sales as they don’t make all the top selling cereals available to their customers. Although Weetabix, Corn Flakes and Crunchy Nut Corn Flakes may be available in most stores, shoppers are also looking for a range of other top selling cereals to satisfy requirements.”
He says a one-metre, five-shelf convenience store fixture has around 24 single facing opportunities. “That’s enough room for most of the top selling ready to eat cereals, plus a couple of hot oats products to complete a recommended fixture. However on most of my store visits I rarely see an adequate range being sold. Education is key to success and we strive to educate in many ways, from undertaking store trials to implementing recommended cash and carry planograms.”
Foster adds that although most wholesalers stock an adequate range the on-shelf presence of brands does not reflect total market performance. “Fixture facings should reflect what sells, according to industry sales data, and sadly that’s not always the case with every customer. We have recently updated our wholesale/cash and carry planograms and have recommended fixtures which are being developed by the Nestlé cash and carry field sales team.”
Like Kellogg’s, Cereal Partners has a trade promotional plan for wholesalers which includes price-marked and ‘% free’ packs.
Foster adds: “The channel remains very important to Nestlé and we have plans to grow by offering a focused core range plan and relevant pack and case sizes for retailers. Last year we reduced Shredded Wheat cases down to eights. This year we’ve introduced Shreddies and Bitesize Shredded Wheat in smaller cases of six.”
Key brands for the cash and carry/wholesale channel include Nestlé Cheerios, Shreddies, Shredded Wheat, Honey Cheerios and Bitesize Shredded Wheat. “All are top 20 brands in their own right,” explains Foster, “And all have ongoing above-the-line TV media support. Cheerios and Honey Cheerios continue to perform well as they are given increased space in cash and carries and have been introduced into more convenience store fixtures.”
Meanwhile Weetabix is keen on price-marked packs. It says they are popular with consumers as they feel they are getting a fair price. Its current price-marked activity includes: Weetabix 12s Â£1.29; Weetabix bitesize, 450g, Â£1.99; Weetabix Minis Chocolate Crisp 375g, Â£1.75; Weetabix Minis Fruit amp; Nut Crisp, 375g, Â£1.75; Alpen Original, 375g, Â£1.69; Alpen No added Sugar, 375g, Â£1.69; Weetos Â£2.39; and Oatibix 12s, Â£1.59, which have just been launched in smaller cases of 8x12s. The company says it will continue to use price-marked flash packs as a ‘long-term great value offering’.
Tony Corp, marketing controller at the Weetabix Food Company, believes the independent sector provides the “perfect vehicle for consumer trial of the Weetabix range”.
“We have invested resource to develop and tailor cases to meet the needs of independent retailers. Outer case design has been developed to show clearer branding and visibility, showing clear price messages to instill confidence.”
He reports that Weetabix brands are performing well. “We work with outlets to suggest a core range based on market data, so that we all benefit. Our core range for independents – Weetabix, Alpen, Weetos and Readybrek – are all achieving strong growth.”
The company recently launched Oaty bars for kids – snack bars that are designed to be both healthy and appealing. However Corp says some outlets have been slow to take on new products which is why the company is providing smaller packs and cases so that retailers can limit their initial investment.
Specifically for delivered wholesalers and cash and carries, Weetabix holds regular trade days with free case activity.
According to Nielsen data, hot cereals delivered 20% of total cereal category growth last year, with Quaker contributing 84% towards this. The brand has recently added a sweet cinnamon variety to its Oat So Simple range. Packs incorporate a ‘two minute’ flash to communicate the convenience of the product.
Sean Summers, marketing director of Quaker, says: “Consumers are looking for three key things from their breakfast cereal – health benefits, affordability and convenience. Oat So Simple ticks all the boxes. Time is one of our most valued resources and Quaker Oat So Simple takes only two minutes, while ensuring consumers don’t need to compromise on the taste and quality of their breakfast. We’re sure the additional flavour will have a huge impact this winter.”
Quaker brand owner PepsiCo is supporting the Breakfast4Life campaign to help raise consumer awareness about the importance of getting a healthy breakfast every day. As part of its support, the company is increasing the amounts of Tropicana juice and Quaker porridge it donates to Magic Breakfast – a charity dedicated to providing a healthy breakfast to underprivileged children in the UK.
=== banking on heinz ===
Heinz Foodservice has launched two new campaigns in the wholesale channel.
The Bank on Heinz text-to-win promotion on sachets, which runs through to October, gives caterers the chance to win up to Â£10,000. Cases of Heinz Tomato Ketchup, Heinz Mayonnaise, HP Brown Sauce, Heinz Salad Cream, Heinz Tartare, Heinz Light Mayo and HP BBQ sachets contain a scratchcard with a unique code. Caterers text Heinz Foodservice to find out whether they are a winner. There are more than 8,500 cash prizes to be won.
Tal Drori, brand manager for Heinz Foodservice, says: “We will be supporting wholesalers throughout this promotion – to maximise end user pull through – with a range of mechanics including end user advertising in the trade press and in PLOFs, and work with wholesaler sales teams.”
The second lot of activity ties in with the latest ‘It has to be Heinz!’ advertising. It is the first time Heinz Foodservice has joined up with the Heinz retail division to shout about the fact that, when it comes to tomato ketchup, ‘it has to be Heinz’.
Caterers have the chance to win up to Â£10,000 cash, simply by keeping their eyes peeled for the 3,500 Heinz Tomato Ketchup 342g glass bottles being sent out with a special ‘prize winner’ gold label on the back.
If they find a winning label, caterers need to text the unique code on the label back to Heinz Foodservice to find exactly how big a prize they have won. There are 10 lots of Â£10,000 up for grabs, a host of other cash prizes, as well as Merlin Entertainment annual passes and Lotto tickets.
In a separate move, Heinz Foodservice has introduced a new Heinz SqueezMe! Tomato Ketchup cash and carry case as well as a Heinz Beanz point of sale kit with a tent card for standard Heinz Beanz or the Reduced Salt and Sugar variety, a window vinyl and menu stickers.