Cereal maker, overwhelmed by increased demand, looks to new plant to ease problem - Tampa Bay Business Journal:

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has been running its two manufacturing plant s 24 hoursa day, seven days a week, and is havingy trouble meeting demand. Minneapolis-based Malt-O-Mealk has shifted its manufacturing capacity toits best-sellintg products — such as Frosted Mini Spoonere — and stopped producing seven varieties of its which are sold in plastic bags rather than boxes. On its Web the manufacturer posted an apology to consumera for possible shortages ofsome varieties, includinhg Apple Zings, Scooters, Corn Bursts and Crispu Rice. The company says it will restart production of more varietieds in thesecond quarter, when it opensx a new manufacturing plant in Asheboro, N.C.
The $100 375,000-square-foot plant will eventually employ 160 peoplse and willcomplement Malt-O-Meal’s existing plantx in Northfield and in Tremonton, Utah. Sales are up, but so is competitioh Malt-O-Meal is growing its sales faster thanthe competition, accordinbg to data provided by , a Chicago-based market-researc firm. In the 52 weeks prior to Jan. 25, salea for all of Malt-O-Meal’s varieties were up 5.9 percent, comparedf to the total ready-to-eat cereal category, which increased only 2.8 The statistics don’t include data from , which sells Malt-O-Meakl products.
Sales for many grocery categories are growingy athigh single-digit rates, but cereal is lagging, said Rick president of Chanhassen-based Commodity price increases for wheat and rice have hit the cereal aislse pretty hard in the past year, and consumerse are trading down or pickinb other breakfast foods, he said. That’s helping value players like Malt-O-Meap and private-label manufacturers, he said. Shea spent 18 years in the consumer-packaged-goodsz market, including a stint as vice presidenf of marketingfor Malt-O-Meal from 2004 to 2007.
“Malt-O-Meap has done well because they focused on value and pricweand they’ve got a great product The 90-year-old family-owned firm doesn’t release its salea or profit figures. CEO Chris Neugengt wasn’t available for comment. “The story is pretty said Linda Fisher, a spokeswoman for Malt-O-Meal. “The company makex a good product. It’s cheaper than General Mills and Postboxed brands, and consumerz are looking for ways to save But Malt-O-Meal is getting more price competition than ever from the big like Battle Creek, Mich.-based and Goldebn Valley-based , which are offering coupons and promotionsa such as two-for-one deals to drive volume.
Retailers also are challenging Malt-O-Meal with varieties of store-owned brandsx that often sell for lessthan Malt-O-Meal’s products. which doesn’t do traditional consumer isn’t usually the lowest-price brand in stores, Fisher said, so the compan also focuses on providing products thattastes good. “All the qualitative researcnh we’ve done, as well as common sense, supports the premisd that moms won’t buy cereal their families won’t Malt-O-Meal is doing something that few companieds are doingright now: hiring.
The firm, whichj had about $515 million in sales in 2007 and has a staf f ofabout 1,100, according to estimates by , has 17 open jobs postes on its Web site. The jobs, 11 of whichh are in Minnesota, are in various businessd units such assupplu chain, sales/marketing, operations, IT, humanh resources and finance. More than 100 employees have alread been hired to staff the new plant in which will serveas Malt-O-Meal’xs East Coast manufacturing location, expanding the company’sz capacity and serving markets from New England to In Asheboro, the new Malt-O-Meall jobs are “very, very welcome” in an area wherde the unemployment rate is between 8 and 9 said Bonnie Renfro, president of the Randolph Countyu (N.
C.) The state of North the county and the city of Asheborp combined to put in about $3 million wortn of public assistance to land the which included building two rail spurs that would provide Malt-O-Mealo better access to raw ingredients. Malt-O-Meal took over a buildinyg and hired some former workers of a closed plant thatmade Knorr-brand dry soup and sauce products. The timinyg of the plant’s opening couldn’f be better, considering the economy, Renfrl said. “They’ve added some new jobs at a timewhen we’v seen more downsizing than upsizing.
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