Retail Success Story: Post Foods

How to Grow Sales in a Shrinking Category?

In 2014, Post Foods was the #3 player in the ready-to-eat (RTE) cereal category and looking to grow sales. Though Boxed Cereal sales were declining, Bagged Cereal sales were growing — reflecting consumers’ increased preferences for value and reduced packaging. The leader in Bagged Cereals was MOM Brands (#4 in RTE), producing more than 30 lower-cost versions of leading brands — for example, MOM’s Dyno-Bites and Buzzers are comparable to Post’s Pebbles and Honeycomb cereals.

Could Post increase revenues by introducing a line of bagged cereals? This was the “Billion Dollar Question” with implications spanning sales impact, shelf placement, and risk of cannibalization.

Post needed to know:

  • Should Post extend their line into Bagged Cereal?
  • What are the risks? What are the rewards?
  • Can Post and MOM live together on the Bagged Cereal shelf?

Added urgency for answers came from a top retail customer who had an upcoming aisle reset. Knowing they needed to have a definitive answer on impact to sales and shoppability before moving forward with this key client, Post chose DI’s ShopperIQ-Assortment research methodology to determine the right plan. This approach includes virtual shopping and predictive analytics such as SKU-level basket analysis, cannibalization simulation, brand equity, volumetrics, and walk-away risk.

Read more in our newsletter or contact us for a copy of the full case study. To view a 1-minute video overview of Post’s assortment research, click here.

This research was presented by Mike Klein, Director of Insights & Analytics for Post Foods, at the 2015 Shopper Insights in Action OmniShopper Event. Contact DI with any questions or to request more information.