4 Ways to Boost Cereal Sales

Think back to your favorite childhood foods. Chances are, cereal played a big part. For generations of kids, those bright, colorful boxes adorned with our favorite cartoon characters were a staple at the weekday family breakfast, just as bran-focused cereals were the go-to for our parents.

While cereal continues to be a convenient breakfast option for busy families, more on-the-go breakfast selections from quick-serve restaurants—and a growing preference for less processed foods and protein-heavy diets—have led to a years-long category decline.

But all is not lost. The cereal category was only down one percent last year, and with an audience of heavy cereal buyers consuming 74 percent of all cereal, there's plenty of opportunity to move the dial on sales, says Vice President of Category Management for Post Consumer Brands Greg Hasper. The key, says Hasper, is using the right mix of marketing and merchandising tactics to zero in on the core buyers—in this case large families with kids, Hispanics, and Millennials—who will help you boost not just cereal sales, but overall center store sales as well. 

“Center store continues to be a very important but challenged area of our stores,” says IGA CEO John Ross. “In a high traffic driving aisle like cereal, if you’re not winning in that category, it can be difficult to make all of center store work.”

Luckily, Hasper and Post have solutions. “We have a lot of good ideas from Post Consumer Brands, not only on how to grow Post, but on how to grow the entire cereal category,” he says.

Hasper and Ross spoke at length about the cereal category, sales, merchandising, and promotion during the Building Cereal Sales IGA category webinar last week. Ross asked Hasper about the top four things he would do in the cereal category if he opened an IGA store, and Hasper’s answers offer tips that all IGA retailers can use to boost their cereal, and in turn, center store sales. 

1. Organize the Cereal Aisle for Shoppers
   
   Traditionally, the cereal aisle has been divided by manufacturers, like Post, General Mills, Kellogg’s, Quaker, and more. But consumers don’t shop that way—they look at categories, and that’s how Hasper recommends retailers organize their aisles. 
   
   “We’re recommending that the cereal aisle be set up the way consumers shop,” he says. “So starting off with Malt-O-Meal® bags, and then come into kids’ cereal, then all-family, adult cereals, and then natural/organic as you go from left to right across the cereal category.” Once you set it up this way, then you can brand block from there. Hasper says retailers who have organized their cereal aisles this way have seen their sales increase.

   

2. Place New Innovation Products at Eye Level
   
   Hasper recommends giving new items the good real estate, and putting best-selling items on the bottom. For example, place the classic Cheerios, in its yellow box, on the bottom shelf, then one shelf up, place Honey Nut Cheerios, then place the innovation or newer item at eye level, and then a strong flanker item that has been established for a while, like Multigrain Cheerios, on the top shelf. With this approach, Hasper says you can take advantage of the new items in the first couple months of the introduction, avoiding a missed the opportunity for sales. 
   

   

3. Stock Up on Best Sellers and Big Brands
   
   First, ensure you have each segment’s big brands in stock. Then, Hasper recommends stocking the best sellers. Replace the worst-selling items with your innovation products, regardless of the manufacturer. For example, if your worst-selling item is from Quaker, but you are trying to make room for a Post innovation, don’t remove a decent-selling Post product just because the newcomer is Post. It’s better for sales to remove the overall worst-selling item in the category, not in the brand.
   
   “You need to be stocking the biggest and best sellers,” Hasper says. “We’re trying to make it easier for the consumer to shop in the store and find what they need in the cereal category.” By stocking the best sellers and newest innovation items, a retailer increases their sales potential from big cereal buyers, who purchase 74 percent of all cereals, according to Hasper.
   
   
4. Promote Cereal with Merchandising and Marketing
   
   In addition to reorganizing your cereal aisle by category and placing the innovation products at eye level, you can present a cleaner shelving space and dedicate endcaps to big sellers.
   
   

   Highlight bagged cereal  

   Bag cereal sales are growing, which is a plus for shoppers and retailers alike. It saves the consumer 20-30 percent over boxed cereal while the retailer makes more profit, Hasper says. Post has figured out how to make bagged cereal present better on shelves through a vertical trapezoid merchandising system, which is available through your Post Consumer Brands sales representative. 

   

   Post’s vertical trapezoid merchandising system vastly improves the shelf presentation of bagged cereals.

   Create an endcap devoted to crave-appeal

   Ross says many retailers aren’t using endcaps to promote pre-sweetened cereals, but Hasper encourages IGA retailers to do so. Despite shoppers’ increasing desire for healthier food, pre-sweetened cereals like PEBBLES™ or Oreo® O’s sell better than healthier adult cereals and appeal to shoppers’ craving for indulgent products. “Our research shows that taste is the most important thing when choosing a cereal,” says Hasper.

   Don’t forget digital

   Once you have your in-store merchandising down, the next step is to begin concentrating on your digital marketing.

   Heidi Huff, IGA’s senior director of Red Oval partnerships, is working with Post now to plan their digital marketing calendar for next year. Expect some exciting offers from Post for your National Digital Ad, digital coupons that tie in with Post’s sponsorship of events (like Major League Soccer), and lots of shopper solutions content from IGA.com, including recipes you can share on social media or print to use with your merchandising in store.

   Hasper also encourages retailers to think about cross-promotion when creating their own weekly ads. According to Hasper, cross-promotion drives volume, so when you offer a “buy four boxes of cereal” promotion tied to a free gallon of milk or produce like bananas or berries, you’ll be promoting additional sales throughout the store.

   Want to hear more about how to boost cereal sales? Watch the archived webinar here. 

Interested in a Cereal Aisle Makeover?

IGA is looking for an IGA retailer to work with Post to evaluate your current cereal aisle setup, then apply the best practices to help you increase sales. Contact IGA’s Heidi Huff to volunteer.