Ever want to have breakfast with Barack Obama? With Cerealize, you could get close.
The San Francisco-based startup is all about custom cereal. It lets people customize their own cereal and box, choosing from a variety of ingredients, and have it delivered to their door. The company is still in beta mode but launched a new campaign this week that’ll let people choose from one of two custom cereal box designs: Obama and Romney.
Cerealize.com is probably the only website you’ll visit that has a cereal configurator. Customers choose their base, whether its mini cookies or multi-grain flakes, and extras, like raisins or pumpkin seeds, and have the option of naming the creation and choosing or making a custom design.
Election-themed cereal boxes popped up during the Obama vs. McCain campaign, courtesy of AirBnB, and came with the slogans “Hope in every bowl” and “A maverick in every bite.” The idea is well suited to Cerealize, which is looking to be topical and tap into a section of consumers interested in such items. When the company began its design process it had a short timetable and turned to 99designs for the work.
“It was a fan favorite,” says Chris Bauman, Cerealize CEO, of the winning design.
The company itself is still testing out the business model. “We want to do small batches, a couple thousand at a time, that are relevant to some time period and location,” says Bauman. This strategy could enable, for instance, the University of Notre Dame to order 500 custom boxes of cereal for a St. Patrick’s Day special and have them distributed in a 3-mile radius of campus. Or, in the case of the election, it could speed an Obama-themed cereal box to your favorite Republican.
The idea for the company originally took home top honors on this year’s StartupBus tour to SXSW. But, with most of the participants already being founders at other companies or busy with projects, there was no dedicated team to execute it. Someone needed to figure out if there was a real business here.
Tim West, one of the Cerealize StartupBus team members, approached Bauman, a business development and marketing guy, to help figure it out. “I really just started diving into this and realized, yeah, there’s a business here,” says Bauman.
When it was initially pitched, Cerealize was described as a mass customization solution in a consolidated industry. “In reality, the reason we’re doing this,” said Jonas Huckestein, one of the original team participants, “is we want to enter the mass market of customized food, and we have found an entry vector into that market, which is cereal.”
When you walk down the cereal aisle in the grocery store, there are hundreds of options. But when you look on the back cover, you’re likely to see one of four names: Kellogg, General Mills, Post Foods or Quaker. Together, they account for 80% of the revenue, according to First Research. The process of producing cereal, and more importantly, the packaging it goes in, can be capital intensive.
The startup, perhaps surprisingly, uses local resources. Many of the vendors it relies on are in the Bay Area, says Bauman. The key for Cerealize is figuring out how much of a premium the market will bear for customized cereal and whether the margins will work.
Two months ago, the company had its first test. Up to 100 custom cereals were available for the flat rate of $10 each, as a way of gaining operational experience and testing whether people would pay, says Bauman. That batch sold out. Another will be available for order this week and an Obama or Romney-themed box will be $25.
“Mass customizing food is not what companies are set up to do, Kellogs is set up to make a million boxes at a time,” says Bauman. “I always wanted to be on the cover of Wheaties….”
The company hopes to do a full launch by Christmas. By then the election will be finished, and at least one of the boxes will be a collectors item.
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