QUAKER BAG CEREALS CUT COSTS AND WASTE

HALLIE FORCINIO

CHICAGO -- Bagged ready-to-eat cereals have been around for years, but never from a major national brand.

Quaker Oats, however, sees bagged cereals as a growth opportunity. It has launched a value-priced line of six products in regular 13- to 18-ounce and large 35-ounce sizes. The colorful printed bags cost less than conventional bag-in-carton cereal packaging and represent a 30% source reduction.

Targeted at families with more than two children where cereal represents a significant part of the grocery bill, selling points are price and brand-name quality.

No stranger to the category, Quaker has sold bagged cereals for years under the Popeye label. Today, however, there is more emphasis on the bagged cereal business, according to Ron Bottrell, vice president of corporate communications. "We're using the Quaker name" and devoting more resources to bagged cereals, he explained. Filled at plants in Danville, Ill., and Cedar Rapids, Iowa, the six-flavor line includes Cocoa Blasts, Frosted Flakers, Sweet Crunch, Fruity OH!S, Marshmallow Safari and Sweet Puffs. Some of the flavors are new, others are former Popeye products with new names.

It's a priority to convince more stores to carry the products because a significant percentage don't include bagged cereals in their mix. Yet consumers buy 22% more cereal when they include bagged choices, according to figures from A.C. Nielsen, Schaumburg, Ill., because parents will buy more cereal when it costs less.

"We think having a major brand behind the products will be a plus for our customer, the retailer, and consumers who may have shied away from bagged cereals previously because they didn't know the manufacturer," said Bottrell.

"We still don't advertise. That's why we can sell the bagged cereals for 40% to 50% less than boxed brands," he added. In-store display racks, lively package graphics and signs invite trial.

"Graphics are fun just as the back of the cereal box is fun," he said. "We know the bagged cereals compare very favorably to name-brand competitors. The lower costs attract repeat users."