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Bagged, value-price cereals are generating growth for Quaker Oats Co. in an otherwise lackluster market.

The cereals, carrying the Quaker name but priced competitively with private-label rivals, enabled the No. 4 cereal marketer to boost its overall sales volume by 2.4% to 211 million pounds for the year ended Oct. 8.

Total industry volume was down 0.8% to 2.6 billion pounds, according to Information Resources Inc.


Sales of the unadvertised Quaker bagged brands, like Cocoa Blasts and Frosted Flakers, hit $54.8 million last year.

The Chicago-based marketer's bagged brands accounted for 1 percentage point, or 26.4 million pounds, of Quaker's 8% share of the ready-to-eat cereal category in volume, the marketer said.

Analysts estimate that the total bagged cereal segment accounts for $250 million, or just 3%, of the overall $8 billion ready-to-eat category. "Quaker is enjoying good growth off a very small base," said Michael Mauboussin, analyst with CS First Boston, New York. "It is a void that Quaker can fill without hurting their own boxed cereal business."

While bagged cereals' success doesn't spell boxed cereals' demise, "it makes bigger players like Kellogg Co. and General Mills think twice about raising prices," Mr. Mauboussin said.


Cereal Sales

1995 sales (in billions) and share in the ready-to-eat cereal market for the year ended Nov. 5.

Sales Change Share

Kellogg $2.9 +0.1% 36.3

General Mills $2.1 -4.6% 26.2

Post $1.0 -3.5% 13.0

Quaker Oats $0.6 +0.3% 7.8

Industry total $8.0 -1.2% 100.0

note: Change compares the same period in 1994. Source: Information Resources

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