The Ready-to-Eat Breakfast Cereal Industry in 1994 (A) - Why have private labels been able to enter this industry successfully?

5) Capital Requirements: in order to enter the industry, there were huge capital expenses to be sustained by firms, such as a minimum of $ 100 million for capital investments, and at least 125 employees to run a plant that could produce both packaging and cereals themselves. In this framework, advertising expenses may be added too, since they’re a great part of the expenditures a RTE Cereal firm has to face, and they also represent a great Barrier To Entry, being an amount close to 1/5 of the sales generated by the company.

Joe Coulombe started Trader Joe’s in 1967. Traded Joe’s can be characterized as a low cost, high quality grocery store. Eighty percent private label product mix, expanding its target markets, keeping costs down, and extremely effective marketing powers Trader Joe’s increase popularity. Since 2002, the market value of private food label has risen twelve percent (Datamonitor, 2008). This essay

These four retailers average private-label dollar share of 22%, well above the industry average of 16%. They have also seen higher levels of overall sales growth versus non-leaders – 5.3% versus 3.4% over the past 3 years. (Future of Food Retailing 2008, 136)

Selling ‘name brand’ products allows the supermarket retailers to access target markets where customers want products produced by popular companies and are willing to pay extra for it. However, by the retailers selling their ‘own brand’ products, they are able to gain customers from the target markets where they want the same product at a lower cost. This will increase their market share in the industry as well as their overall revenue/profit. This can be seen as the percentage of sales for ‘own brand’ products have increased from 19% in 2010 to approximately 30% in 2016. This means that the retailers are gaining customers which increases their market share and overall revenue/profit.

The retailers are motivated to promote private label goods because of their lower costs and greater profit margins.

It is also critical for us to try to enter the private label early because the market is expected to grow 10% for the first four years and we hope to gain a large market share over our competitors. Entering the private label would offer competitive advantage because it would decrease the cost per unit and spread our fixed production costs, however if price bids start a bidding war, then it is best to leave the private

2)A Junior marketing executive at MegaGrain Cereals suggests increasing the package size and price of its best-selling brand without increasing the amount of cereal inside the box. Her superior warns that this might be a bad idea because MegaGrains long-term survival, like most companies, depends on

This paper research the possibility of General Mills to be successful despite of high levels of competitions and consumers changed in eating habits to find healthier and fresher alternatives. With 150 years in the market and with a vast portfolio of more than 100 products that are marketed inside and outside the United States, General Mills have gotten behind in the development of new products that attract the need of the new consumer demand. New eating patterns represent a threat to the company along with the proliferation of private labels. A weakness in the strategic planning functions made General Mill’s competitors gained market share over GM. Chapter one mentioned that one the company biggest rival in the cereal line is Kellogg’s, which was already suffering from low sales. Yoplait in the yogurt line, used to be a leading brand in the country are now losing market share to give way to the newcomers.

The projected volume increase of 4% is viewed as an ambitious goal in light of the following factors: a) an increasing competitive environment with Energade facing two major competitors (namely Tummylicious, the entry from Good Foods, which has superior dissolving and taste characteristics vis-à-vis Energade, and Tastytime, which has more than doubled its share of market in 2000); b) the expected heavy media support for Tummylicious and other competitive brands resulting in Energade no longer dominating advertising spending (Energade share declining from 65% in 2001 to 42% in 2002 declining to an estimated 35% in 2003); and c) uncertainty as to the precise volume impact of the price increase to $.59 for Energade, which is heavily reliant on

How much do you know about the businesses that you see every day? The deals that they make behind closed doors, the loopholes they find and the people they bribe to let them do anything they want. Given how much we consume their products, we should know what we are getting out of it. They are required to print the nutrition facts on their products, but they use alternate names for ingredients so they average consume does not know fully what they are getting. They also do not undergo the same food quality testing as a government or locally run distributors. Not only do we not know what we are getting from these

* As per IBIS World research report “…industry research suggests that private labels or exclusive brand account for around 20%-30% of store merchandise and the rest is the same across the market” (Lekovic 22)

A recent 2009 SWOT Analysis of the organization from Datamonitor (2009) listed some additional opportunities such as the recent strategic acquisitions that helped in strengthening their market position. These acquisitions also help the organization to expand its operations in the natural and organic foods markets as well as increase its client base and the number of product categories. One acquisition in particular is the merge with Wild Oats Market in 2007. Other opportunities recorded by Datamonitor (2009) include the growing demand for private label products. Recent economic conditions have warranted companies to offer less expensive private label products as an alternative to the customers’ needs.

Beginning in 1923, Kellogg’s, a cereal company located in Battle Creek, Michigan, created PEP, a whole wheat cereal. Significantly, in 1930, it became the first fortified cereal consisting of vitamins B and D. According to Kellogg’s official website, it became the first product to undergo food fortification or adding of minerals and vitamins, using the spray method (par. 4). Prior to its discontinuation in the late 1970s, the company focused extensively on sponsored advertisement. Kellogg Company partnered with sponsoring radio networks, such as the "The Singing Lady” and the “Howie Wing”, to benefit the food and entertainment industry.

Customer demand, no competition, large margins. Every seller strives for those things, but with the positive comes the work, and the work includes getting to know what you should do and most importantly, what you should not do. While building your own private label brand has appeal for lots of reasons, DIY product label-building may not be the best course of action; the private label product business can be steeped with risk. An effective system to use while building a private label product business should include: product evaluation, proper legal vetting, identification to the right manufacturer partners overseas, small minimum order quantities (MOQ) on a wide range of products and all the hard work necessary to get your products launched on Amazon.

A large number of the total revenues made by confectionery companies alleviate from revenues by big supermarket chains. Retailers are continually focusing their efforts on price and as such this is a key concern of many manufacturers due to margin deterioration. There is also a growth in supermarkets own private label confectionery products. With these items becoming largely available and at a lower cost this could have effects on demand for branded confectionery