Kellogg’s has signalled a radical shake-up in the way breakfast cereals are sold in the convenience channel and received the backing of a major wholesaler for its plans.
The company will slash the cost to store owners of stocking its cereal by launching new case sizes, with a new lower number of packets per case meaning lower investment in stock for independent retailers.
The move will impact seven of the 10 top selling cereals and all 40 million packets of breakfast cereal sold each year in the wholesale channel by Kellogg’s. It will bring the case cost of Kellogg’s cereal to below £12.
“This is about offering convenience retailers a new deal in cereal”, explained Lee Doherty, head of specialty accounts at Kellogg’s.
“Convenience retailers historically get lumbered with the same larger case sizes as their multiple cousins. The fact is convenience retailers tell us they don’t need such large cases as their volumes are smaller.
“Having large case sizes with 12 or 10 packets of cereal in each simply doesn’t add up for convenience retailers. At best it takes up a lot of storage space and at worst impacts cash flow as retailers have to pay out for more product than they need.
“Our announcement today will change all this and will see us offer new cases sizes of between five and six packs, created especially for convenience retailers. The end result will mean convenience retailers will be able to buy cereal for less and in the amounts they actually need.
“Put simply, smaller cases are less risky for retailers”, said Lee.
The move was welcomed by Booker. Steven Fox, Sales Director – Retail from Booker said: “I am delighted that Kelloggs have taken the lead and helped us to give our customers what they want. Cash management has never been more important to independent retailers and this is one step to help them with this. I am confident that these smaller packs will sell well and also help our customers offer a better choice in their stores.
The new case sizes will be rolled out from November, with all Kellogg’s products in convenience moving to either a five or six packet case.
In a linked move, Kellogg’s will be rolling our price marking to many of its cereal including a permanent price marked pack of £2.79 on Krave.
“This is about ensuring all our convenience customers have the right mix of products, at the right price and in the quantities they need”, concluded Lee.
Kellogg’s cereals account for 47% of the total cereal category in convenience and delivered over £72m in sales over the last 52 weeks in the channel.
ENDS
Note to editors:
Example new case prices for Kellogg’s cereals:
|
Brand
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Number of packets per case
|
Recommended wholesale price per case
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|
Coco Pops
|
6
|
£10.69
|
|
Crunchy Nut
|
6
|
£11.59
|
|
Bran Flakes
|
6
|
£11.49
|
|
Corn Flakes
|
5
|
£10.29
|
Tags:
breakfast cereal