BREAKFAST STRATEGIES

MARYELLEN LO BOSCO

While cereals still rule in the breakfast aisle, some retailers are currently cross merchandising them, along with other morning foods, elsewhere in the store to garner additional sales.

For example, Rick Hagan, sales manager and head buyer for Camellia Food Stores, Norfolk, Va., puts some cereal in the dairy aisle, near the milk.

"We have specific cereals that we promote in the dairy department, and we try to maintain [at least] one on an ongoing basis. The cereal is usually a promoted or advertised feature that we get a special buy on," he said.

Cross merchandising is not done in all the stores, but it has been successful in those units where it has been implemented. Camellia has been using the strategy for about 18 months.

"We assume that customers have already passed the cereal by the time they get to the milk, so we assume these are additional or impulse sales," Hagan explained.

Cereal in the dairy aisle is signed and may be on an aisle stack or a pallet. In addition, it may be in the flier as a featured item.

In the frozen aisle, Camellia keeps a display of syrup next to the frozen waffles, which is another way of coaxing additional breakfast sales. "We do that every other month," Hagan said. "Either the syrup or the waffles or both are on promotion. We don't want to put up a display unless we are competitively priced." Usually the items are on a four-week temporary price reduction.

Camellia also cross merchandises toaster pastries and breakfast bars in the bread aisle. "We do secondary displays in the bread aisle and next to the cake once a quarter," Hagan said. "We do that mostly with Nabisco products."

John Bogdanovich, director of marketing for Jitney-Jungle Stores of America, Jackson, Miss., noted that Jitney stores have also cross merchandised milk and cereal.

"Recently, we advertised milk in our circular and included cereal, which is just a natural avenue of pursuit. We also cross merchandise with our cold boxes at store level," Bogdanovich said. "The cold boxes contain milk and juice, and we tie in cereals. We use rounds in our stores, as well as end-aisle bunkers."

A marketing manager from a small Midwestern chain who requested anonymity told SN that "We cross merchandise juice boxes in the breakfast aisle, and beverages, such as Looza fruit nectars."

Like Hagan, this retailer is displaying maple syrup next to the waffles in the frozen aisle. Stores were running a special promotion for the two items and cross merchandising them for the first time when the source spoke with SN. The promotion began in September and is doing well.

In addition, pancake and waffle mixes and syrup are merchandised together in the baking aisle, the source said. These include locally milled muffin and waffle mixes, which get special attention.

All the retailers agreed that ready-to-eat cereal is their biggest breakfast item -- mostly due to the sheer volume -- although convenience foods have a bigger profit margin. Camellia devotes about 42 feet to cereal, with 8- or 12-foot sections used for hot cereals. Since hot cereals do better in the colder months, manufacturers begin promoting in the autumn, said Hagan. He had an ad breaking at the end of September, when he spoke with SN, and was planning at least two more promotions for hot cereal before the end of the year.

At Scolari's Food & Drug in Sparks, Nev., 85% to 90% of cereal sales are in the ready-to-eat category, while about 10% are in hot cereals and 5% in other packaged breakfast foods, according to Chuck Jones, senior buyer.

"We start doing some promotions for hot cereal about now," he said when he spoke with SN last month, "but we are still promoting ready-to-eat cereals pretty heavily."

Jones noted that the RTE cereal companies are putting more marketing dollars into some of the "new style cereals with fruits and nuts." He also speculated that RTE is most popular in his marketing area because of the mild climate.

All-family cereals are the most popular cold breakfast food, Jones said, which he partially attributes to the heavy college population. Young adults probably put cereal on their lunch and dinner menus, he noted.

Scolari's generally devotes about 48 feet to the cereal category. Special promotions are usually put on endcaps or on the side of endcaps. "We try to get away from stacking in the aisles," Jones said.

Unlike Scolari's, the Midwestern retailer sells more children's RTE cereals than all-family. Items like frosted and honey-coated Cheerios, Fruit Loops and cereals with toys or special offers are especially popular, the Midwestern source said. She attributed these preferences in her marketing area to the number of young families with children.

Imported McCann's oatmeal and natural cereals like Kashi are also popular, she said. "We have every cereal known to man," the source quipped, saying one side of an entire aisle is devoted to the cereal category. Opposite the cereal, a half-aisle is used to merchandise juices, breakfast bars and other packaged breakfast foods.

Hot cereal is popular in the winter, said the Midwestern source. "We try to do a promotion [for hot cereal] beginning in November and continuing through the winter," she said. In September, the retailer demoed hot waffles (from a mix), hot cereal, sausage, milk and juice.

"We showed them quick and healthy ways to serve kids breakfast." The waffles were made from a mix produced by a local manufacturer, and the sausages were fresh from the meat department.

At Jitney-Jungle, RTE cereal occupies about 48 feet, while hot cereal accounts for about 8 to 12 feet in the cereal aisle. Kids' cereals are also the most popular at Jitney, according to Bogdanovich. In addition, an 8-foot section is devoted to toaster pastries, granola and instant breakfast items.

Hot and cold cereals are promoted "virtually every week," Bogdanovich said. Stores use lean backs and endcaps to call attention to these items.

Convenience breakfast foods are also doing well at Jitney, particularly fruit and grain bars. The stores have private-label items in every major breakfast category, he said, and they all do well.

Scolari's devotes between 8 and 12 feet to toaster pastries and breakfast bars, according to Russ Hahn, another buyer at the store. The convenience category goes up and down, Hahn said. "Some items do well, and some poke along. Pop Tarts do well, and Health Valley and Quaker are steady," he said.

Kellogg cereals are promoted often at Scolari's, as well as Hy-Top private-label varieties. "We promote three [Hy-Top] cereals per quarter, and we promote them heavily," he said. Both Hahn and Hagan of Camellia sell the eight-pack snack-pack cereals from Post and Kellogg, but they are not very popular.

"They are not doing what I would have anticipated," said Hagan. "The item from Kellogg we've had probably close to a year, and the Post item for six to eight months."

"It's more of a niche item," noted Hahn. "Kids don't think of it as a snack. Anything new like that you have to promote, and they aren't promoting it much."