THE RISING BAR

WILLIAM SMYTH

By Convenience remains a strong motivator in the breakfast aisle, with grab-and-go items flying off the shelf and into grocery bags of Americans in need of a quick way to start their day.

According to Information Resources Inc., Chicago, the breakfast-bar or cereal-bar category saw a 6.6% increase to $915 million for the 52-week period ended March 28, 1999, with private-label snack bars showing a 28.3% increase.

"Nutri-Grain bars are going through the roof. While oatmeal seems to be down in our stores, convenient morning foods are going up and up and up," said Joe DiLoreto, a buyer for Star Markets, Cambridge, Mass. "For breakfast food, cereal still remains the driver, but it is down a tad. The convenient morning foods just keep going up."

Star Markets places the breakfast items next to the ready-to-eat cereal. The whole breakfast section is between 8 and 16 feet, with an average of 12 feet in most stores. The section contains cereal bars, granola bars, toaster pastries and fruit snacks. The retailer uses endcaps and special displays for breakfast foods, and ads are put into circulars on a weekly basis. DiLoreto also noted that pancake and muffin mixes are doing well.

IRI data show that while ready-to-eat cereals still account for the lion's share of the breakfast category, with close to $7 billion in sales, cereal continues stalled, with sales plateauing or going down for many major-brand varieties.

Toaster pastries, another convenience item, were down 1.3% according to IRI, with $467 million in sales for the 52-week period ended March 28. Hot cereal was up 3.5% and raked in $710 million.

Not surprisingly, retailers had differing views about what customers are putting on their morning tables, but everyone agreed that breakfast and snack bars remain strong.

Al Milne, a category manager for frozen and packaged goods at North West Co., Winnipeg, Alberta, said both frozen and shelf-stable breakfast items are doing well. He credits a variety of locations for breakfast items as a key to sales. "Currently, we carry breakfast bars in the cereal aisle and the portable-snack section. We find that multiple locations increase sales," said Milne. "Pop Tarts and toaster pastries are displayed in the cereal aisle and Nutri-Grain bars are in dual locations."

According to Milne, shelf-stable breakfast items are the second-highest category in his stores, in terms of sales.

North West runs 51 weekly ads for breakfast items a year, and more ads are done over the Christmas and New Year's season. Pillsbury Toaster Strudel is put into circulars once or twice a month. Promotions are done throughout the aisles with cereal bars and other products.

For the 143 stores in Canada and the 15 stores in Alaska, space is tight, since units are between 2,000 and 30,000 square feet. Shelf-stable breakfast items comprise between 2 and 4 feet.

Milne said that the most popular frozen items are large sizes. "Right now we do endcap bulk features a lot. The 48-pack Eggo waffles and the 32-pack frozen pancakes do very well. It's surprising, but pancakes are starting to take off in this market," he said.

Casey Mooney, a category manager for Homeland Stores, Oklahoma City, is also seeing high sales of breakfast bars. "Cereal bars are showing good growth in our stores," said Mooney.

"Breakfast bars have a different consumer. They tend to be upscale and older than a cereal buyer is. They also tend to have a higher income and have no kids. Cereal is predominantly for children," added Mooney.

Grab-and-go breakfast items are in the cereal section of Homeland stores, said Mooney, and generally occupy between 8 and 16 feet. Granola bars, cereal and breakfast bars, fruit snacks and toaster pastries can all be found there.

Muffin and pancake mixes are found in the baked-goods aisle, Mooney said. Endcaps are done occasionally with toaster pastries, and cereal bars have been cross merchandised on juice ends and cereal ends. Mooney pointed out that endcaps "definitely help and always drive volume."

Hot cereal has been "soft" in the Homeland stores, and Mooney said that it's because hot cereal is for an older generation. "The younger generation is not picking up on it. It's also less convenient. We're continuing to see a trend in our stores of convenience. The preparation time is longer with hot cereal."

Other retailers also told SN that grab-and-go items were very popular with their customers. Debbie Goulding, a category manager for Buehler Foods, Jasper, Ind., cereal bars in a separate section or breakfast center.

"The breakfast items are doing fine. The separate section is across from the cereal aisle on another shelving unit," said Goulding. "There are about 8 feet of pop tarts and 12 feet of instant breakfast cereal bars. [A separate section] definitely betters sales."

A buyer from a large Midwestern chain who did not wish to be identified had similar comments. "Things that are quick are doing great. That is where we are seeing the largest increase in sales," said the buyer.

"You have to do endcaps and displays. The bars are usually found in the store in the same aisle as the cereal. We also try to advertise them at least once a month.

"Although the aisle where they're merchandised varies, the average size of the section is 16 feet," said the buyer. The buyer also pointed out that, in his stores, the "old-standbys" like oatmeal are doing well, but "pancake mixes aren't taking."

Murrys in Upper Marlboro, Md., is both a retailer and a manufacturer of breakfast food, and has good success with its Murrys brand French toast sticks, which it distributes to the entire Eastern coast. Some of the chains that have the product include Winn-Dixie Stores, Wal-Mart Supercenters, Harris Teeter, Pathmark Stores, Stop & Shop, Kroger Co., A&P, Tops Friendly Markets and Giant Food.