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 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, the company said.
Lee Doherty, head of specialty accounts at Kellogg’s, said: “This is about offering convenience retailers a new deal in cereal. 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.”
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