New life for custom cereals

One of the trends that I have been watching for several years is the rise of companies that create custom cereals according to customer demands. This innovative manner of making cereal had its beginnings in Germany and is led by mymuesli. Two U.S. companies, [me]&goji and MixMyGranola, tried to copy this model here. At first this looked very promising.

Last summer, however, it appeared that this approach might not being having the intended success. [me]&Goji announced that they would be shutting down. In the fall, MixMyGranola entered into a partnership with Element Bars, a food bar company, although it does not appear that relationship is still intact. Just this week, however, Element Bars announced that they were acquiring [me]&goji which had already ceased operations. Jonathan Miller of Element Bars says that they "share the same vision of custom, whole foods and hope this acquisition will continue our growth in the custom food space." It is not yet clear how the cereals will be branded.

One of the difficulties that these upstart companies faced was breaking into the large cereal market. Perhaps their future will be brighter if they are part of a company with more resources. We will continue to watch.

[me ] & Goji to close

Now that I'm unpacked its time to get back to all things cereal. And, there's no better place to start than with breaking news from a company I have followed with interest over the past for years: [me] & Goji
Today the upstart company announced it will he shutting down at the end of the month. Here's an excerpt from a company email today:

When we decided to launch Me & Goji three years ago, our goal was to take a common product—cereal—and completely rethink it. We aimed to offer the best cereal on the market, from our packaging, to the quality of ingredients to the story and values behind it. We believe we succeeded in doing these things and our amazing customers have been the validation.
Ultimately, what led to our decision was our inability to progress out of the bootstrapping startup phase and into a scalable business.  Having tried everything from creating the first cereal of the month club, to a retail product, to a cobranded line of cereals with a teen pop star, we feel comfortable that we have tested all waters.

This is unfortunate news as [me] & Goji has been an impressive entrant into the crowded cereal marketplace. But, as I've pointed out before, it is difficult to compete in this environment, and especially to break into consumers' minds. The future will be won by those who innovate, but the journey there will not be an easy one. Sadly, there will be casualties along the way.

Cereal for your Valentine

Monday is Valentine's Day, the occasion to express your love to the very special person in your life. Chocolates, flowers, and jewelry will be popular gifts, but what about cereal?

Cereal is hardly ready to be the premiere choice for demonstrating one's affection, but at least some companies are hoping that some will see it as unique and special. Both major U.S. custom-cereal companies have special Valentine's promotions, ranging from Gift Certificates to a Valentine's Day Mix.

What's really significant about this is that the newer, startup companies can get away with this whereas the established cereal companies can't. No one would dare risk their relationship by giving an off-the-shelf box of Kellogg's or General Mills cereal for Valentine's. That could spell disaster, or a long sleep in the doghouse. But, giving something out of the ordinary could actually earn you points! All this reinforces the idea that newer, innovative brands have a higher perceived value. That's the challenge that the big companies are going to have to deal with more and more. How can they move their cereals from mere commodities to high value brands?

Technorati Tags: cereal, Valentine, me+and+goji, MixMyGranola, breakfastbowl

Cereal upstarts V

In recent weeks I have had a series of posts looking inside three relative newer comers to the cereal industry - companies that are trying to break into the marketplace with their unique cereal concepts. I appreciate the willingness of Carolyn Creswell (Carman's), Adam Sirois ([me]&goji), and Maximillian Cascone (Pro Oats) to share the candid thoughts and dreams behind their respective ventures.

As we've observed, these company leaders are passionate about their cereal and optimistic for the future despite the challenges they face against the well-entrenched cereal marketplace. The fact that there are alternative cereal brands, however, suggests that perhaps they are on to something. There obviously are a significant number of consumers who want something beyond ordinary in their breakfast bowl, and for this reason there is still room for companies who can truly innovate and think outside the (cereal!) box.

In the words of Pro Oat's Cascone, "We're doing something different, something we truly believe in and that hasn't been focus-grouped into oblivion. It's very much an 'upstart' mentality - one that says, hey, we're here, and this is a product that has the potential to really take over a large part of the market - we're ready to do it!"

These three highlighted companies are not the only newcomers on the scene. There are others, such as MixMyGranola, Umpqua Oats and YogActive. The reality is that, like in any industry, there will be winners and losers. Some of these entrepreneurs will never achieve enough traction to succeed. A rare few may become powerhouses to the point of either changing the industry or becoming take-over targets of big multi-nationals. This latter scenario is the story of some other previous upstarts like Bear Naked, Cascadian Farms and Kashi.

It will be interesting to watch the development of these upstarts in the coming months and years. I'll you keep you posted.

Technorati Tags: cereal, Carman's, me+and+goji, Pro-Oats, breakfastbowl

Cereal upstarts IV

With life slowing down a little I'm finally getting back to my series on new companies breaking into the cereal market...

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.

Technorati Tags: cereal, Carman's, me+and+goji, Pro-Oats, breakfastbowl

Cereal upstarts III

Continuing with my exploration of new companies breaking into the cereal market...

As we discovered in my last post, the three sample companies are optimistic over their prospects. But, they face many challenges, especially as they compete against large, multi-national cereal companies in an already crowded cereal marketplace. While they recognize the challenges, they seem undaunted in their determination and belief in what they have to offer.

Pro Oats' Maximillian Cascone has the following perspective: "Like any smaller company, we don't have the advantage of the economies of scale that a company like Quaker does. We don't have the luxury of multi-million dollar ad campaigns to brainwash consumers into buying our product. So our goal is to create a product that beats theirs in its healthful properties and make our way into markets that we think will be attracted to our product, even if it is slightly more expensive than the big name brands. As our brand becomes more widely known, we will grow into larger markets."

It is apparent for our upstarts that the strategy is finding a niche that will give them an edge. Pro Oats focuses on a "very-high protein quick oatmeal that is all-natural". Carolyn Creswell from Carman's is also up to the challenge, and is convinced that they have something unique to offer because in their assessment in the U.S. there are "not many companies offering a pure, natural product that wasn't full of sugar or flavourings". She states that many Americans who tried Carman's in Australia contacted them requesting the products in their home country.

But, it's not only having a unique product that gives these companies a fight chance against the big boys. It also has to do with their entrepreneurial culture. Adam Sirois of [me]&goji is convinced it comes down to "innovation and agility" because "It takes longer to turn big ships so smaller, more nimble companies have an advantage when it comes to meeting the needs of consumers." And, with the availability of social media such as Facebook, etc. "it is easier than ever for a small company to gather customer data [and] really gauge consumer needs, at little or no cost."

Tough competition is obviously their biggest challenge, but there are others as well. We'll explore those in my next post.

Technorati Tags: cereal, Carman's, me+and+goji, Pro-Oats, breakfastbowl

Cereal upstarts II

I am currently examining the attempt of newer companies to break into the crowded cereal marketplace, and have chosen three different ones to gain insights into their thinking and strategies: Carman's, [me]&goji, and Pro-Oats.

The first question I posed to their company representatives is: "What do you see as the future of the cereal industry?"

Not surprisingly they are quite optimistic about the future of the industry, and especially their respective company's place in it. While I only interviewed three upstarts, it is interesting that virtually all the new entrants into the cereal market are brands emphasizing healthier cereals. And, this was evident in their responses. They sincerely believe that people are fed up with mass manufactured cereals with questionable nutritional value.

As Adam Sirois of [me]&goji stated, consumers are increasingly realizing "the big companies could spray extruded flakes with vitamins and offset the bland taste with sugar". It is evident that recent concerns about the nutritional value of some cereals is feeding this perception and big, multi-national companies are an easy target, leaving room for those that offer healthier options.

Maximillian Cascone of Pro Oats put it this way: "Like the rest of the food industry, the cereal industry will continue to move towards all-natural and organic ingredients and processes.  This is not because the food companies are being altruistic, but because consumers are becoming more and more conscious of their food choices ... There appears to be a growing consensus and awareness that food and its ingredients and processes can profoundly affect your well-being and overall health. The consumer as always will vote with their wallet, and the smart money will be on natural and organic foods."

To respond to this trend, innovation will thrive. Carman's founder, Carolyn Creswell, believes that the cereal industry will continue "to grow through a range of new product development", especially in light of new research on the health benefits of certain nutrients and foods, such as oats. Many companies are likely to jump on this bandwagon for the foreseeable future. Sirois is convinced that "the future of the cereal industry will show a kick-up of smaller cereal companies. Though the cereal industry is known for having too many options, 95% of those options come from the same 2 or 3 factories. There is still space for innovation in this industry and it will come from the smaller guys, who will be quicker to meet the needs of consumers".

These three companies, along with a myriad of other new health-oriented cereal manufacturers, are obviously convinced that cereal is a lucrative market with great potential as consumers search for alternatives to the common options available to them. Like with any emerging industry, there are many who will try to gain a foothold in the marketplace, but eventually only a handful will survive and there will be industry consolidations, etc. My next couple of posts will examine how these companies plan to compete and the challenges they face.

Technorati Tags: cereal, Carman's, me+and+goji, Pro-Oats, breakfastbowl

Cereal upstarts I

One aspect of the cereal industry that has regularly captured my attention is the attempt by small, emerging companies to break into the cereal marketplace and take on the "big three". There are dozens of alternative brands out there focusing on a particular niche, some appear to be reasonably successful. A few, like Kashi, became so successful that they were actually taken over by one of the big cereal giants (i.e. Kellogg in this case).

Over the next week I will be writing several posts that look deeper into "upstart" cereal companies that are currently trying to gain a foothold into a very crowded cereal marketplace. To do so I have contacted three such companies, representing a diversity of approaches and strategies. Company officials have provided me their perspectives and I will be sharing those in the coming days. A couple have also given me samples to try.

The three companies I will be highlighting are:

• Carman's Find Foods an Australian firm just starting to make a presence in the U.S.
• [me] & goji one of the custom cereal companies, and
• Pro-Oats a small instant oatmeal manufacturer just getting started

I know you will find their stories and insights interesting.

Technorati Tags: cereal, me+and+goji, Pro-Oats, Carman's, entrepreneurs, breakfastbowl

More [me] & goji

Last month I did a four-part series comparing my experience with custom cereal manufacturers MixMyGranola and [me]&goji.

In response to my posts [me]&goji co-founder Adam Sirois emailed me his reflections and some additional information. He gave me permission to share his email. Here are some excerpts that provide greater insight into what they are doing:

This is Adam, one of the co-founders of [me] & goji. I wanted to thank you for running the 4-part series on our company versus mixmygranola- it was great to read a nonpartisan comparison. I appreciate the honesty of your review (you actually purchased your own mix, rare!), and I'd like to address a few points you raised in your article to continue the discussion, shed some light on our thoughts behind the industry and highlight some things that set us apart.

Using a combination of MyMuesli and GM's MyCereal soft launch to press in 2001 as a foundation for our business model, we decided to focus on cereal as muesli does not have a big market here and you do not find many small cereal companies in the US the way you do granola; we saw an opportunity there.  We do not try to shy away from the influence they had, but like any new company, we attempted to improve upon the foundations they laid. Apart from being the first custom cereal & granola company in US, we have innovated in several areas including:

-first (& only) to have a LIVE nutrition counter that updates in real time as you add each ingredient
-first (& only) to allow customers to upload any picture onto their Cereal Capsule (who hasn't dreamed of having their face on a cereal box!)
-first to use drag & drop functionality to make the mixing experience interactive
-first to target people with special dietary needs, such as those who are intolerant to gluten or elite athletes with a focused diet
-our website is designed to be educational and engaging where visitors can learn about new exotic foods and their health benefits
-we are an eco-conscious brand and one of the only consumer product companies I know to offer carbon offsets at the purchase point (Green Tags)

As you know, cereal is a $10b industry and it is a product that people are passionate about.  Before us, cereal was considered a fast-moving consumer good with low-perceived value.  What we are trying to do is reposition cereal--similar to the way Starbucks repositioned coffee--as a premium specialty good that can be catered to each individual. We do not sacrifice quality for quantity or price and every ingredient we choose to offer is the best of its kind we have discovered, even if it means sacrificing the organic tag (our blueberries are grown wild in Maine and hand-picked, but not certified organic).

We are not trying to create a gimmick or novelty item, rather a lifestyle brand and a superior product, and I believe we have (Food & Wine named us Best Natural Cereal in August).  While our granola is great, our cereal really sets us apart.

You were one of the first to feature us from the very beginning and we often used your blog as a resource during the early stages of development, so we thank you for that. We continue to follow your blog and recommend it to our cereal fanatic customers. We would love to keep an open line of communication and hear any suggestions / advice you'd like to give.

sincerealy yours,

adam
Technorati Tags: cereal, me+and+goji, breakfastbowl

Head-to-head: Custom cereals - Part 4

This is the fourth part of a series of posts about my recent experiences ordering from [me]&goji and MixMyGranola, the leading U.S. custom cereal manufacturers.

In short, both companies have done a great job and are creating a good product and ordering experience. In my opinion, there is no clear winner, at least not in these early stages of their evolution. I would have no hesitations ordering from either of them again.

Going through the entire process from ordering to eating has been a fun experience. Certainly the novelty factor alone gives custom cereals certain appeal. It is an innovative concept that has the potential to shake-up the breakfast industry.

But, I have a few questions and concerns:

1. Will custom cereals ever become mainstream? While it may be possible for a small business to flourish with this business model, I wonder whether it will ever catch on enough to have a significant long-term impact on the role of cereal of in our society.

2. How will custom cereal companies distinguish themselves from each other? Probably the most amazing part of this exercise has been the realization that there is more similarity between MixMyGranola and [me]&goji then differences. Unfortunately, in the effort to copy the success of mymuesli they seem to be neglecting the opportunity to further innovation and creativity. Long-term success will depend on each of these companies finding their unique niche and capitalizing on it.

3. Is there life beyond granola and muesli? Obviously the very nature of granola and muesli make them great candidates for a breakfast cereal base. But, I would like to believe that the next stage in custom cereal will include even more cereal options for consumers.

I look forward to watching this cereal drama unfold, and will keep you posted here.

Technorati Tags: cereal, me+and+goji, MixMyGranola, breakfastbowl

Head-to-head: Custom cereals - Part 3

This is the third part of a series of posts about my recent experiences ordering from [me]&goji and MixMyGranola, the leading U.S. custom cereal manufacturers.

After placing my order I knew that I would have to wait for my order. To my amazement it didn't take as long as I had expected. Even though I live on the opposite side of the country from both of these companies I had my cylinders of custom cereal within just a few days. To be exact, my MixMyGranola shipment arrived in 2 business days via FedEx, and the [me]&goji order was only one day later via UPS. Pretty impressive.

Having received the goods it was fun to look over the canisters. Each had a custom label with the name of my mixture, the list of ingredients and the Nutrition Facts calculated according to my recipe. I noticed, however, the MixMyGranola's label was not completely accurate as it listed "Organic Granola" without breaking down what comprises that granola as they are required to do. (I could find this information on their website, however). Also, in keeping with the similarity between the companies, both cylinders had personalized, hand-written signatures and other markings such as happy faces, etc. from the individual who prepared my mix. Nice touches to reinforce the personalized service and custom nature of these products.

The big question is: What about the cereal itself? I am usually reluctant to review cereal by taste as that is largely subjective. But, let me briefly describe what I observed. [me]&goji's granola is definitely the more hearty of the two cereals. Even the base granola itself comes with extras like sunflower seeds, cashews and pumpkin seeds. Interestingly, when milk is added the density of the cereal prevents any floating. MixMyGranola is a much more basic granola mixture. As far as my taste preference is concerned, I tended to enjoy more the taste of MixMyGranola's version, probably because it contains more sugars and therefore is sweeter. But, both were great to eat and will not disappoint anyone who enjoys granola.

With my stomach full, in my next post I will offer some final reflections on this entire experience.

Technorati Tags: cereal, me+and+goji, MixMyGranola, breakfastbowl

Head-to-head: Custom cereals - Part 2

This is the second part of a series of posts about my recent experiences ordering from [me]&goji and MixMyGranola, the leading U.S. custom cereal manufacturers.

A couple of weeks ago I went online to place fairly identical orders from these two companies. Despite the different offerings, it was fairly easy to come up with a cereal combination that would allow for a fair comparison. In the end I decided to concoct a mixture that included their base granola plus dried blueberries, almonds and flax seeds.

Both companies have dynamic web sites that allow for the instant creation of the cereal of your choice. They also have premixed versions for those that either can't make up their mind or don't want to go through the hassle. (But half the fun is coming up with your recipe!) As far as the online simplicity and user experience, both websites are well designed and easy to use, although [me]&goji's is more appealing because you drag and drop your ingredients into an on-screen bowl. Cool! Each also allows you to see the nutrition composition of your formula before you purchase.

As far as choices are concerned, [me]&goji offers 9 cereal bases, including gluten-free options. From there you can choose from 19 grains and spices, and 14 dried fruits. MixMyGranola's options offer more possible combinations. Although there are only 4 bases (3 granolas and 1 muesli), you can pick from 17 nuts and seeds, 20 dried fruits, 24 extras (including such unusual ingredients like gummybears, pretzels and candy corn), and 17 enhancers (powders including spirulina, green tea and bee pollen).

In many ways these companies seem to be quite similar, even down to the use of a cylinder in which your cereal is packaged. But, each also adds its own twists, apart from the ingredients offered. [me]&goji allows users to donate $1 upon checkout to a worthy cause, this month to renewable energy projects and breast cancer survivors. MixMyGranola offers some special price incentives. If you join their monthly "granola club" you can save 15-35%. And if you first sign-up for their email newsletter you get a 10% discount off your first order, although I tried that and my special code didn't work - so no discount!

As far as cost is concerned, my [me]&goji order totaled $15.39 with shipping. The MixMyGranola bill came to $13.25 with shipping. But, it is important to note that the [me]&goji cylinder is somewhat larger. If you calculate the total cost per unit of weight, MixMyGranola is about 50% more expensive, although they are much more aggressive in offering discounts through their granola club, newsletter offers, and even a coupon included with the shipment. Shipping charges also can differ. I ended up paying an identical $4.99 for each order, but that's because [me]&goji's rate was still a "summer special". MixMyGranola rewards those who buy in builk, offering free shipping for orders over $40.00.

Ordering was a pleasant experience, but one disadvantage to conventional cereal shopping was evident. I couldn't take my cereal home with me and instead had to wait until it was delivered. More on that in the next post.

Technorati Tags: cereal, me+and+goji, MixMyGranola, breakfastbowl

Head-to-head: Custom cereals - Part 1

vs.

This week I am doing something new for this blog: I will be posting a multi-part series depicting my recent experiences with the two leading U.S. custom cereal manufacturers.

In the past year or so two companies, [me]&goji and MixMyGranola, have largely copied the success of German cereal maker mymuesli to introduce the concept of custom-made cereals to the U.S. This is certainly an innovative approach that allows consumers to design their own cereal online and then to have the finished product shipped to them in a cardboard cylinder. [me]&goji and MixMyGranola are betting their business hopes on the realization that there is a growing desire for personalization of all consumer goods and a quest by many for quality above commodification.

A couple of weeks ago I placed fairly identical orders from these two companies and have since had the opportunity to experience and compare their service and cereals. Watch for my reflections in upcoming posts.

Technorati Tags: cereal, mymuesli, me+and+goji, MixMyGranola, breakfastbowl

[me]&goji

Following in the footsteps of German cereal innovator, mymuesli, is an American company called [me]&goji. This New England upstart promises "custom artisanal cereal" that is "designed by you, handmade by us". Like with mymuesli you pick the ingredients and they put them all together and send them to you in a plastic cereal capsule. Some of the ingredient choices are quite exotic, and include such things as goji berry, chia seed, and macadamia. In all there are over 40 natural and organic ingredient choices. The cost starts at $4.90 for a 600g (21oz) capsule (but couild easily be much higher depending on your ingredient choices) plus USPS shipping. Not cheap, but when you are innovative and unique you don't necessarily have to be.

As I've stated before with mymuesli, this is an innovation to watch.

Technorati Tags: cereal, mymuesli, [me]&goji, breakfastbowl