Cereality Starts Eastern Push

"We hope to put a couple in Center City and several suburban locations," says David Roth, co-founder and CEO of Cereality. "Very soon we will move into Chicago," he adds. "We are doing cite evaluations there now and expect to open by year-end. We also have our eyes on Boston, and Colorado is of interest to us. We're not looking to be everywhere at once, but, over the next 12 to 18 months, we'll enter key markets with units that are company-owned and operated."

Beyond that, Roth says, "We have all the systems set up for franchising. We will look to sign area-development, not single-unit agreements. And we'll seek franchisees with experience in multi-unit food service."

"We" is Roth and Rick Bacher, chief creative officer, who has 16 years of experience in corporate identity, packaging and design. Roth has experience in brand development, food and media. Asked how much he likes cereal, Roth is quick to say, "this is not about me being a cereal addict. It's about creating a brand around … other brands. The more important question is: How much do I like people who like cereal?"

He then rolls out a long list of cereal stats, such as, "95% of the American public enjoys cereal, and this applies to people from six months old to 80 years old and older; 100% of Americans have some form of cereal in their households; and it is eaten every day, all day." The folks at Quaker Oats Co., which has provided Cereality with start-up funding and R&D, supplied a wealth of insight into cereal-eating habits, Roth says, such as, "people are incredibly ritualistic about cereal. They want it the way they want it, and, even in the same family, two people don't eat even the same cereal the same way."

Cereality offers more than 30 different brands including Quaker Oats, General Mills, Kellogg's and Post, and more than 30 different toppings. Two scoops of cereal with one topping and milk costs about $4. Cereality is also a "Got Milk" licensee with the opportunity to cross-promote with the marketing slogan initiated by the Milk Processor Education Program. "They called us," Roth says.

The concept could work if the company executes its strategy well, says Clark Wolf, head of Clark Wolf Co., a New York-based food and restaurant consultant. "Concentrating on a single food category hasn't hurt ice cream, juice bars, espresso bars or submarine shops," he says. "It builds on other people's brands and connects with emotion and memory. It also allows for flexibility, such as trends to organic foods, whole grains, and even the old-fashioned notion that if you're going to have carbs, make them good ones."

Jim Blue also learned of Cereality through word of mouth. Blue credits Kathy Lin, COO of Madison Marquette Consulting Group, with finding Cerality's Arizona kiosk while scouting for unique retailers. In addition to inking an agreement with Roth for 1,500 sf in the 300,000-sf University Square complex, Blue got Jim Bennett, a Madison Marquette managing partner, to work with Roth for future development of multi-format units in Philadelphia and other markets.

Cereality plans to develop all four of its retail formats together in key markets. The café has a serving area of about 1,000 sf to seat between 20 and 25 in an environment that contains a farm table and upholstered chairs, "kind of like a comfy home kitchen," Roth says. The U. of Penn newspaper describes it as Seinfeld-like. Another format replicates the Arizona in-line configuration that can be used alongside other food retailers in a common-seating environment. The third is "a free-standing kiosk that could sell from the street and fit into the lobby of an office building or healthcare facility, without the need for build-out," Roth says. "The fourth is between a café and a kiosk, somewhere in the 500-sf to 600-sf range."

Despite the decision to begin its rollout in University City, which serves both U. of Penn and Drexel University, and proceed to Chicago and Boston, both big university towns, Cereality is not targeting just the college crowd. Roth says, "We asked ourselves, 'who is the most cynical audience?' It's college kids, and if they adopt your brand, they spread the word." He calls this "viral marketing." He's counting on the students and faculty at Penn and Drexel to latch onto Cereality and spread the word.

He calls University Square a "trophy location with a great selection of retail at a top-notch Ivy League campus with real character to it in a city with an ideal demographic spread." After Philly, how far will Cereality go? "You can't imagine," Roth says, claiming interest from as far as the Middle East. "There's very strong interest in England," he says, adding, "yes, we plan to go abroad, looking at opportunities through partnerships." Got milk, will travel.