From my previous posts we have observed that the three companies I am using in this case study are enthusiastic about their products and business But, there are challenges. Specifically, I was interested to find out the obstacles that newcomers into the cereal market face. Each of them had a unique answer:
I was not really surprised by what Carolyn Creswell of Carman's shared. For this company it simply comes down to money: "The cereal giants have large marketing budgets which offers them an opportunity to promote and offer price cuts on a very regular basis. As a small company (under 20 employees!) we just don’t have that sort of capital." Their approach is to "keep our costs to a minimum and focus on top quality at a fair price".
But, smaller, upstart companies have other challenges too. [me]&goji faces challenges specific to its own business model which focuses on creating custom cereals sold only online. Adam Sirois stated that "It is a challenge for us as on online company to communicate our product and convince new customers to take a chance on something they can't hold or haven't had before." The big retail companies have a corner on store shelf space and consumers' minds. Gaining familiarity is tough.
Interestingly, Pro Oats sees a completely different type of challenge: ingredient availability. Maximillian Cascone put it this way: "We were surprised by the challenges we faced finding all-natural ingredients from bulk suppliers. Almost everything we found had some kind of coloring or chemical or other garbage that was exactly what we were trying to avoid. You'd be surprised how few suppliers there are of organic and all-natural dried fruit in bulk - almost every place we found all traced back to one or two suppliers." And, in most cases these suppliers have minimum order requirements making it difficult for a small company still in limited volume production.
So, with all these challenges what is the future of cereal upstarts? I'll examine that in my next post.
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