ONE BOWL AT A TIME. There's a new food craze in town, and if you haven't heard of it yet, you're either out of touch or you're getting too old. Photo by Shaira Luna, courtesy of SME Insight.
ONE BOWL AT A TIME. There's a new food craze in town, and if you haven't heard of it yet, you're either out of touch or you're getting too old. Photo by Shaira Luna, courtesy of SME Insight.
Spreading happiness one bowl at a time By Karen Galarpe SME Insight First Posted 15:44:00 01/31/2008
There’s a new food craze in town, and if you haven’t heard of it yet, you’re either out of touch or you’re getting too old. That’s because since 2006, many young kids, from grade school to college, have been saving up their baon for bowls of cereal they can buy in school. And a lot of yuppies troop to the nearest outlet for their cereal fix too.
So what’s with the bowl of cereal, you ask. At Cerealicious, a cereal bowl is not just a cereal bowl. True, cereals are drowned in milk here, but the toppings go from fruits to chocolates to puddings to coffee jelly and more. In fact, Cerealicious offers 40 cereals and 40 toppings and you can mix them any way you want to or go for any of the 20 certified “blockbuster” mixes cheerily named after blockbuster movies. Thus, you can munch on Charlie and the Chocnut Factory today, order Nutting Hill tomorrow, and snack on Oreo Afraid of the Dark the day after.
Nothing like it has been offered yet in the country, although cereal bars and cereal cafes have been mushrooming in the US lately. This is the reason why a group of young people—friends, classmates and officemates all aged 24 then—banded together in 2005 to offer that concept here.
“We saw the idea, and thought it would be cool to bring it here,” says Crissy Balatbat, one of the owners and the business development and PR/media manager of the group. Besides, they agreed that they wouldn’t be able to compete with fast-food outlets should they go into burgers, fries, barbeque, or coffee. They agreed, though, that they have to Filipinize the concept to make cereal bowls a hit here. “In the US, 90% of Americans eat cereals. It’s a staple food. Here, we are rice eaters. So the way to make cereals click is to sell the experience,” says Crissy.
Selling the experience The experience starts with the customer choosing the cereals he wants, the toppings, and extras like ice cream or yogurt. Each cereal bowl is splashed with the store’s own secret milk shake. He can then choose between a trailer bowl (small) or a blockbuster bowl (big). The customer then eats his cereal bowl with friends in the bar stools or sofas cozily placed in the café. Cerealicious’ apple green interiors and homey kitchen atmosphere set the mood for fun. Often, customers laugh at the menu items, what with the witty names for the blockbusters. “Wit and humor are part of our marketing strategy. We want to sell cereal in a fun way,” says Crissy.
Before the first outlet of Cerealicious opened in the UST campus in January 2006, a lot of work went into refining the concept and perfecting the product line. The group behind it—Crissy, Charlene Falcis, Lester Fuentes, Katrina Ronas, Natasha Tabucal and Andrew Varona—raised P800,000 to start everything.
They chose a campus setting for their very first outlet since cereal bars hit it well in such locations in the US. UST proved a good location since it not only has a school (grade school to graduate school), it also has a hospital and a church inside it. “We felt we can expose our product to a very diverse and big market in UST,” says Crissy.
Educating the market When the UST outlet was opened, though, response was not immediate. They were the only food place open then on the second floor of the carpark building. They felt that the challenge was first, to educate the crowd of the value of eating cereals, and second, to let them know that a cereal café named Cerealicious is here.
By word of mouth, students came. Soon doctors and nurses would come in too. Sales picked up but plummeted during the summer when classes were over.
Refusing to be discouraged, the group used the downtime to improve the product line. They also hired a food specialist to concoct their secret milk shake at this time. “At first, our milk was common; it was nothing spectacular. It can be bought from the market. Now it’s something that’s uniquely ours,” says Crissy.
So when school reopened in June 2006, Cerealicious was ready. Sales spiked up. And inquiries about franchising poured in.
Franchising Cerealicious The first franchise outlet opened in August 2006 on Taft Avenue, across De La Salle University. “Our primary market consists of students and young people from 13 to 30 years old in the A, B and upper C market. They’re hip and young and have purchasing power,” reveals Crissy.
Soon, these two outlets were followed by more, with most located in schools, and some in malls. To date, there are 17 Cerealicious outlets, some of them outside Metro Manila—Cebu, Davao, and Baguio. Three outlets are company-owned, and three are joint ventures. The rest are franchisees. They also join school fairs and cater at children’s parties and boardroom meetings.
“A franchise package costs P250,000 for a cart (inclusive of equipment and franchise fee) and P500,000 to P1M for a store, depending on the size,” says Charlene. They also offer assistance in site selection and negotiation process, as well as pre-opening, opening and after opening support. In reviewing franchise applications, they prefer those who are about their age and who are hands on. “We want to deal with those who are of the same wavelength as us; those na ka-jive naming,” says Crissy.
Every quarter, the group holds a general assembly attended by all franchisees. Here they review standards and introduce new products (aside from the cereal bowls, they now also offer smoothies called cereal smoochies, and cereal splits which are like banana splits). And every week, area supervisors gather the weekly sales reports from outlets and franchisees and present this to the group. Each franchisee also has a hotline to a partner. “We aim to maintain good relationships with them,” says Crissy.
Hands on management Cerealicious’ expansion has necessitated that the owners be more hands on in running the business. Four of them, in fact, have already quit their day jobs to focus on Cerealicious.
They have also put a system to everything: A thick operations manual details everything needed to run a Cerealicious outlet, the product of time motion studies and step-by-step training seminars. They also improved their backend system, adopting a just-in-time inventory system and installing a POS system for easy monitoring of what sells. Tie-ups were also forged with cereal suppliers like Nestle and Kellogg’s, which gave them a 30-day credit line and marketing support.
As for keeping customers, marketing strategies include promotions such as the Blockbuster of the Month, a product that goes with the current season. Customers can also suggest new blockbusters they can put on the menu, with the winner getting free cereal bowls for a month.
Admittedly, they still have a long way to go in educating the rice-eating market about cereals. Crissy says: “We have to mention a brand for them to know what cereals are. Then they say, ‘Ah. Di ba breakfast yan? Di ba pambata yan?’
But the group remains undeterred. They know that the ultimate cereal experience can make people happy. And happiness starts one bowl at a time.
(Excerpt from an article in the November-December 2007 issue of SME Insight magazine.)
Copyright 2008 SME Insight. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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