MORNING CRUNCH

KELLY GATES

Shoppers entering a number of supermarkets throughout the country are encountering a new and unique advertising program designed to raise awareness of participating brands of cold cereals and to encourage an immediate purchase. What makes the program so unique is that the shoppers themselves then become a direct-marketing medium by passing along the marketing message to other consumers.

The new-sprung advertising program, "Supercards," consists of small display cases that are mounted directly onto a wall or attached to shopping basket racks near the entrance of participating Safeway stores, including Vons and Dominick's, as well as Pavilion and Pathmark stores.

The cases are filled with postcards adorned with the Honey Nut Cheerios bumblebee, the Trix rabbit and other familiar brand characters and logos immediately recognizable by most consumers. The back of the cards contains the appropriate space for a mailing address and a handwritten message, just like a standard postcard.

The brainchild of BrandAid Communications, an advertising company based in New York, this unique "Supercards" advertising program has been in place in various metropolitan areas, including New York, Philadelphia, Chicago, Los Angeles and San Diego, for the past six months and has reportedly been a huge success.

"With consumers taking more of an interest in on-the-go breakfast items lately, cold cereal manufacturers are looking for new ways to advertise to consumers to generate more of an interest in their brands. Plus, this new concept also allows retailers to get in on the action by offering their shoppers a free gift each time they come into their stores," said J.R. Badian, chief executive officer of BrandAid, who noted that retailers' logos are incorporated into the display signage.

"Consumers seem to love the idea because so far, every last postcard has been taken from stores by the end of each month."

Badian added that the displays hold 13 different postcards from various food brands, many of which come from cold cereal manufacturers like General Mills.

Participating retailers note that the program has been very effective in encouraging shoppers to purchase cold cereal during their visit to the store.

And, as much of the marketing of cold cereal now centers around children, the postcards have given grocers and manufacturers a direct way to market to kids at the store level. "The advertising program has been very successful in raising awareness of the products being promoted and prompting shoppers who have the postcards in hand to go directly to the shelf and purchase them," said Nayla Durr, spokeswoman for Vons, the Arcadia, Calif.-based division of Safeway. "It's been particularly good for reaching children since they're immediately attracted to the pictures of the Cheerios bumblebee and other kids' cereal characters that appear on the front of the cards."

Cold cereal, which was once the convenient alternative to the hefty breakfast of eggs, bacon and toast or pancakes and sausage, has quickly become too time-consuming for many on-the-go consumers.

Kevin Dukett, manager at Highland Park Markets in Glastonbury, Conn., said many of his store's shoppers are bypassing traditional cold cereals for new items like General Mills' cereal bars that combine cereal and milk in a single breakfast bar.

"Consumers are in such a hurry that they'd rather have a cereal bar than a bowl of cereal because it's fast and convenient," he said.

Consequently, retailers have their hands full trying to promote cold cereal at a time when consumers want breakfast items that are quick to fix and, most importantly, portable. So, the emphasis has shifted to the kids who are more apt to enjoy a bowl of cereal as their parents hustle about each morning, grabbing a last-minute Toaster Strudel or microwavable bagel sandwich on their way out the door.

Handy Andy Supermarkets, the grocery chain based in San Antonio, strategically places school supplies along the cereal aisle to attract children, according to store manager Lupe Anguiano. Handy Andy stores also have coffee in the cereal aisles, said Anguiano, "but, we don't cross merchandise anything like bananas or other produce that goes well with cold cereal. We stick to nonperishables."

In addition to cross-merchandising promotions, retailers are being bombarded with requests from cereal manufacturers demanding more exposure for their brands.

Some have even come up with creative ways to encourage grocers to foot the bill themselves.

According to Anguiano, many manufacturers are now offering discounts to grocers willing to promote their brands on a regular basis.

"We've noticed a major trend toward prepriced cereals that are less expensive by the pallet as long as we promote the items ourselves," said Anguiano, who added that much of this promotion is in the form of circulars. "But we don't get the lower price for a few promotions here and there; the manufacturers are asking for 12 to 15 promotions per year."

Aside from in-store circulars, many grocers and manufacturers work together to promote cereal through distribution of coupons. However, according to NCH NuWorld Marketing, a coupon-processing and promotion information management company based in Lincolnshire, Ill., the number of coupons redeemed in the past few years decreased due to a sluggish economy and industrywide consolidation.

Major cereal manufacturers like General Mills, Kellogg's and Quaker Oats are among the group of companies that have consolidated, resulting in a direct impact on the number of cereal coupons redeemed. Yet as these consolidated manufacturers continue to settle into their new corporate skin, this number has started to rise again and NCH executives expect it to increase steadily throughout the remainder of the year.

While brick-and-mortar stores provide a more traditional medium for cereal manufacturers to sell their brands, the Internet has increasingly become an integral part of the mix. Some manufacturers, like Quaker Oats, are even using the Net to give breath to old cereal brands that no longer boast a strong enough consumer demand to warrant the shelf space in supermarkets.

After a 25-year hiatus, Quisp, a Quaker Oats cereal that was popular in the 1960s and 1970s, has experienced a resurgence of interest from Internet shoppers.

Previously available in only five segmented regions of the country, the pink-alien cereal is now available online, thanks to a partnership with Netgrocer.com, the online grocer based in New Brunswick, N.J. "Manufacturers are starved to keep the consumers they have and encourage them to stay within their brand family, which is why there are so many line extensions and revivals of older brands," said Rex Talbott, vice president of marketing and manufacturing partnerships at Netgrocer.com. "A lot of the brand extensions we're seeing are efforts from manufacturers to keep up with kids' tastes."

He cites the addition of marshmallow bits into Lucky Charms and sweeter-tasting Cheerios cereals as proof that manufacturers are willing to do whatever it takes to capture the attention of younger consumers.

Talbott said that despite some of the inherent differences between online grocers and brick-and-mortar stores, much of the promotion of cold cereals is very similar. The format of promotions simply take on a different medium -- banner ads replace in-store signage and printable coupons are commonplace instead of coupon machines in each aisle. Consumer trends also impact Internet grocers in the same way they impact traditional retailers. "The major trend toward convenience and quick-fix breakfast items is the main reason cold cereals are being overlooked by some consumers in lieu of foods with faster prep times, which is evident online as well as in traditional stores," said Talbott. "If time and convenience wasn't an issue, no one would have an interest in shopping online and having food delivered directly to their homes."

As consumers continue to demand on-the-go breakfast items, retailers and manufacturers have their work cut out for them if they expect to keep the cold cereal category alive and well. "At this point, most are focusing on marketing to kids, which will likely be the case in the future, too," said Badian.