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Supermarket Guru

Breakfast cereals: another price hike!

General Mills, the nice folks who bring us many of our breakfast cereal favorites just announced that they are raising prices – again! The increase, according to the company will just be a few percentage points (Kellogg's raised their prices 5% earlier this year) but the reason is that they are making their boxes smaller! These changes will take effect June 25, 2007.

The reason? Higher prices for corn, wheat and cocoa according to the company, but cereal companies who already have huge margins, need to give us a break already. We most certainly, based on past history, can expect the other companies to follow the Big G's lead. By the way…what ever happened to that congressional inquiry into the price of breakfast cereals that was started back in 2002?

The profit margins of individual cereals are a closely guarded secret - but if we take a look at industry statistics (Source: UBS Warburg), the average cereal delivers about 17 % profit. While that might not sound like a lot, it's important to note that in cereals the packaging, shipping, sales, promotion and advertising total 48 % - just about triple (15 %) the cost of the raw material inside the box.

So what can we do?

Read the labels carefully - whole grains actually fill us up more than other grains, so the topline? Less cereal will fill you up more - and as you know whole grains are also more nutritious and can help reduce risk of heart disease and some cancers.

Switch from the more expensive "kid" varieties that are loaded with sugars and other ingredients like marshmallows to the adult cereal classics and add fresh fruit, nuts or even a teaspoon of white sugar (just 16 calories) to the cereal to make it more "kid friendly."

Try the store brands! The store brand cereals are typically less expensive by a dollar or more. Compare the taste and ingredients - they might not be identical - but if you are watching your budget, the taste difference may not matter. Remember that practically all store brands have money back guarantees, so if you are not satisfied with the taste, bring the unused portion back for a refund.

Cereal storage is important! Cereal will absorb moisture and spoil quickly - so take the box (or bag inside) and put it into a ziplock bag. Never store cereals in the refrigerator as moisture and odors from other food can be easily absorbed. It's also important to wrap them tightly to avoid insect infestation, especially over the summer and in warm damp environments.

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8 Comments

coco said:

sigh - I wish I could figure out a replacement for cold cereal that could make me as happy as cereal does. Of course, I did notice tonight that I was a lot more selective looking at those nearly $5 boxes of cereals in the grocery.

June 8, 2007 9:00 PM

juanita said:

CAN YOU FREEZE CEREAL?

June 9, 2007 10:43 AM

carol said:

I never thought I would see the day I would pay more for cereal than sirloin hamburger meat! But, I'm counting a heap on it bringing down my cholesterol as it advertises,otherwise it's adios amigos, pip-pip and cheerio. In other words Buh Bye.

June 10, 2007 9:20 AM

Mary said:

Make your own Granola with rolled oats - not instant, not quick cook. Many recipes on Internet, adjust them to your liking with the added ingredients.

June 10, 2007 10:18 AM

Joanne Elenes said:

As we all know cereal prices are ridiculous!

I refuse to pay nearly $5.00 a box, so I buy Oatmeal, at least you get your moneys worth!

What greed there is in our country.

June 11, 2007 4:00 PM

Martha said:

Pay more money for less product. Looks like someone is making a "killing" again at the expense of the common person that makes less than 20,000-25,000 a year.

Go to markets that sell in bulk (keep the oatmeal box and put the bulk oatmeal in the old box). We'll have to get more creative, that's all.

June 11, 2007 4:48 PM

Missy said:

Thats it, I'm going back to gardening and growing all my food. Between gas, cereal and the cost of everything else going up, and our pay NOT going up, how can a family get ahead? Time to go back to simplicity where we grow and make everything we need! This sucks!

June 12, 2007 7:22 AM

tess said:

I make granola cereal for my family. We like it a lot and it's so much cheaper than even the store granola. I make it simple and add to it as each person desires. My neighbor used to buy cereal from the store and I've got her switched to my granola recipe too. If you want the recipe, just ask!

July 31, 2008 9:00 AM