General Mills Will Decrease The Size Of Cereal Boxes, Raise Prices

Get ready to pay the more money for fewer Cheerios, starting June 25. General Mills has announced that they will be decreasing the size of their popular cereal boxes as a cost cutting measure, as well as raising the prices. From the Wall Street Journal:

The company also hopes its “Right Size, Right Price” initiative will boost margins — something all food companies are trying to do as they get squeezed by lower-cost, private-label goods and more-expensive fresh and organic food.

Less Cheerios for more money! Yay! Wait. —MEGHANN MARCO

General Mills Raises Price On Line of ‘Big G’ Cereals [Wall Street Journal]
(Photo: iwantamonkey)

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  1. Jozef says:

    “The company also hopes its “Right Size, Right Price” initiative will boost margins — something all food companies are trying to do as they get squeezed by lower-cost, private-label goods”

    So let me get this straight: they are reducing the size of their boxes and raising prices in hopes to attracts customers who currently purchase private-label products? I’m one of said customers, and I don’t think I’d be switching to brand-name products for the privilege to pay more for less.

  2. rmz says:

    I love the “Right Size, Right Price” spin they’re putting on it.

    Anyhow, I thought cereal was already outrageously expensive enough. Something like $4.50 for a regular-sized box of even a relatively no-frills cereal nowadays, right? I didn’t used to like buying the bagged bulk cereals because cereal boxes are easier to store in a cupboard, but I may have to start buying bulk and storing it in those large jars or something.

  3. I stopped buying cereal altogether because it was too hard to find a normal sized box. Everything comes in Super Jumbo Family Size and I don’t want to spend that much money for a cereal box that won’t even fit in my cabinets.

    So know they think I’ll pay more for the priviledge of box small enough to be put away? I don’t think so.

  4. gwong says:

    “Right Size, Right Price” because paying less for more was “Wrong Size, Wrong Price” – I’m amazed at the drivel companies expect us to just eat up.

  5. etinterrapax says:

    I’d really prefer that they just raised prices and left out the insult to their customers’ intelligence.

  6. r81984 says:

    What do you expect to happen? Gas prices have more than tripled since 2000 and for no real reason.

    How do you think everything is delievered?
    Its all by trucks or trains that use diesel fuel.

  7. hills says:

    I guess “Smaller Size, Higher Price” just doesn’t have the nice ring that “Right Size, Right Price” has…..

  8. rmz says:

    @r81984: Gas prices were $1.00-$1.33 a gallon in 2000?

  9. slapstick says:

    From what I understand, they’re actually reducing the price but due to the difference in size, the price per ounce is going up. You’re paying less, but you’re getting less for what you pay for.

  10. glomm says:

    You should use this as an opportunity to encourage people to make their own muesli.

    My mix is usually rolled oats, raisins, flax seed, sunflower seeds, banana chips, walnuts, and kasha. It tastes so much better than regular cereal and is loaded with calories, fiber, vitamins, and good fats. It is also cheaper by the pound then most cereals.

  11. iMike says:

    Related news: Amazon nearly always has coupons/instant discounts on cereal. Winds up being $2-2.50 for a typical ~12 oz box. Plus you don’t have to go anywhere to get it.

  12. Bix says:

    “Right Size, Right Price” is some pretty brilliant buzzwording.

  13. Sathallrin says:

    I get that Malt-O-Meal from Wal-Mart.. it is 3 something a bag and about the size of 3 normal boxes I think.
    Tastes good enough for a bowl every morning.

  14. FunPaul says:

    Amazon is the best for getting bulk dry goods.
    We’ve set up a bit of a doomsday pantry off of the deals we’ve gotten from Amazon.
    They run monthly instant rebate specials, usually $10 off an order of $29.
    http://www.amazon.com/b/ref=sc_fe_c_7_16310101_1/104-33228

  15. mopar_man says:

    @Sathallrin:

    I buy that too but I buy it elsewhere for cheaper. My wife and I have a few Tupperware cereal containers that work great. I can’t tell the difference between it and the brand name stuff. Sometimes the Malt-O-Meal actually tastes better.

  16. GirlGoneRiled says:

    I can’t remember the last box of cereal I bought. Somehow I manage to get my kids breakfast anyway – what with oatmeal, peanut butter toast, yogurt, fruit, eggs, whatnot. Calorie for calorie all probably cheaper than cold cereal and healthier, too. Unless one is without a functioning kitchen (which I know is depressingly not unheard of in lower income families) I don’t see a real need for it.

  17. fairweather says:

    They respond to the threat of fresher, higher-quality goods by raising the prices of their inferior goods as a cost-cutting measure?

    Oh the irony…

  18. nidolke says:

    That’s why you buy the cheapo bagged cereal on the bottom shelf baby.

  19. TedSez says:

    General Mills isn’t making boxes smaller and raising prices at the same time. They’re putting less in each box but charging the same amount as before, so the price per ounce is higher.

  20. yellojkt says:

    I’m still upset over half gallon ice cream containers becoming 1.75 quarts. What is the right size box? You still have to pour it into a bowl.

  21. Jozef says:

    @rmz: As far as I remember, I was getting gas for $0.95 – 0.99 per gallon in the summer of 1999. So $1 – $1.33 per gallon in 2000 sounds about right…

  22. njtrout says:

    Why don’t they reduce the amount they pay athletes to be on the cover of a Wheaties box and pass the savings on to the consumer. I wait for specials and coupons when buying cereal, although those are getting fewer and farther between.

  23. Wally East says:

    @yellojkt: This exactly what I was going to post, too. But, I’m doing my best to make my own. It’s not always cheaper since heavy cream is so expensive but I make better ice cream than most ice cream companies.

  24. badgeman46 says:

    I just buy bulk generic bagged cereal, the bigger the better! Who cares if it goes stale, I still save money! Its like 5 bucks for a bag the size of a small child! Sad, but dry dog food is essentially cereal, and you can buy 30 pounds for dirt cheap! So obviously GM is ripping you off.

  25. Wally East says:

    @Jozef: According to the Energy Information Administration, gas averaged $1.52 nationally for all grades for all of 2000. For the month of May 2007, the national average for all grades was $3.18. February 1999 it was $0.96.

  26. FatLynn says:

    Remember that bulk packaging doesn’t save money if half of it goes stale before you can eat it. There are customers who would rather pay a lower price for a smaller package, even if it is more per ounce.

  27. zibby says:

    The transpots costs are, of course, relevant. I also recall hearing a vague rumor that wheat, corn, and rice prices have been, shall we say, rather “strong” lately, and particularly compared to a year or two ago. So really no mystery or evil here apart why they decided to come up with some B.S. slogan (or whatever it is)that wouldn’t fool a child.

  28. PlanetExpressdelivery says:

    Right Size, Right Price = Small Size, Large Price
    While I’m not a huge fan of the book 1984 (I believe it was mainly written about Nazi Germany and a precursor to Soviet Russia), this marketing campaign is straight out of the book. Anyone want to nominate General Mills to run our new “Ministry of Plenty”?

  29. royal72 says:

    dear general mills, can you say “plain-wrap cereal”.

  30. zibby says:

    @PlanetExpressdelivery:

    Hell yeah, so long as they go back to the original Lucky Charms marshmallow assortment. They definitely got greedy with purple horseshoes.

    Sorry for my typing in the previous post, ugh.

  31. r81984 says:

    @rmz:

    Gas prices were between $0.80 and $1.00 in 2000.
    So that would mean they have more than trippled.

  32. Youthier says:

    @rnkoneil: You Googled the same article I did! 1.54 a gallon was the average. The article I read said it “surged” to this cost in March 2000.

    @r81984: To your point, I paid about $1.15 at that time in my tiny stick town.

  33. r81984 says:

    @rnkoneil:
    I do not believe that statistic of gas being $1.52 a gallon in 2000.

    I turned 16 in August of 2000. I did not drive before then. In those last months of 2000 I paid between $0.80 and $1.00 in Northwest Indiana near Chicago. During that time there were always gas stations on the news that would sell gas for as low as $.60 a gallon in the Chicagoland area. It was not until the begining of summer of 2001 when gas went up to over a dollar.

  34. Wally East says:

    @r81984: Hahaha, oh man. That was good for a laugh. Thanks.

    You don’t believe it? Because you think I’m making it up? Or that the government agency is making it up? Or does your experience trump that information? Did you click the link? Re-read it closely. $1.52 was the average for the whole country for the whole year for all grades of gas for 2000.

    Your anecdotal experience is just that: anecdotal and your experience.

  35. protest says:

    how about to hell with general mills, if you don’t like it then buy another brand of cereal. when i shop for cereal i buy whatever is on sale, or use whatever coupon i have on hand, or even buy bagels if they are cheaper.
    the cost of gas and corn has gone up a lot, so of course cereal will get more expensive. just like stamps go up, so will everything else until someone puts a stop to this ass raping we call ‘surge in gas prices’.

  36. Ponygirl says:

    rnkoneil,

    I to lived in a metropolitian area with very high gas prices compared to the national average (normally .20 cents above the national average) and I recall paying around $1.30ish. I too think that the $1.52 is not a correct number.

    That aside I don’t see it being right or wrong as a reason to insult and belittle anyone else.

  37. Karmakin says:

    Surprised nobody has mentioned this. About once a month or so I find cereal on sale for 2 bucks a box or so. I buy 2-3 boxes, and that does me for about 2 months. I don’t think I’m the only one who doesn’t jump on the brand bandwagon, but instead gets whatever looks interesting and is on sale.

  38. VA_White says:

    Sometimes the kid wants Cheerios. He’s two. You can’t go anywhere without Cheerios when you have toddlers. It’s the law or something. So I buy the generic oat hoops or some such noise for my kids. I store the cereal in those vertical tupperware containers and the boys are none the wiser.

  39. bbbici says:

    This is just gouging made possible by consumers’ awareness of rising fuel and corn prices. However, the increase in the production and shipping cost PER BOX due to increasing fuel and grain costs is probably less than $0.25.

    The media is also responsible for high gas prices. There is no way Israel shelling Lebanon has anything to do with oil prices, yet consumers willingly accept this BS as an excuse. Meanwhile the oil companies laugh and roll in their profits.

  40. TedSez says:

    The SoCal Albertsons’ eight-hour sale starts in 35 minutes. Cheerios, 15-oz. box, 4 for $5.

  41. Starfury says:

    @rnkoneil: If you’re making your own ice cream (which I do) get your supplies at Costco. 1/2 gallon of heavy cream is under $3, same for half and half.

    On the cereal: I’ve tried the store/maltomeal cheerios and they’re horrible. I also never buy cereal unless it’s on sale and tend to buy a lot when it is. My kids have it 4-6 days a week and I eat it at work 4-5 days a week.

  42. Dervish says:

    @bbbici: “This is just gouging made possible by consumers’ awareness of rising fuel and corn prices.”

    Sorry, but where are you getting this information? Ingredient and freight costs have, in fact, gone up significantly in the past 18 months or so.

  43. yg17 says:

    I buy the off-brand stuff. It’s half the price and tastes exactly the same. It probably comes out of the same factory.

  44. zaky says:

    It’s funny—-I saw this segment on the news this morning and people were complaining about cereal reaching 4 bucks a box. Um, does anyone else here live in New York City? I haven’t seen a box of cereal for UNDER 5.65 in the two years I’ve been here, even at some crap hole locations like Food Emporium.

  45. dohtem says:

    “Right size, right price?”

    I hope someone there saw the irony.

  46. Dervish says:

    @yg17: “It probably comes out of the same factory.”

    I can say with absolute certainty that this is not true – at least not for General Mills cereals.

    And if you think about it, why would a company compete against itself by selling both name brand and private-label stuff?

  47. Hexum2600 says:

    @Dervish:

    You. Are. An. Idiot.

    Market penetration. Some people onyl buy name brands. some people never do… why not sell to both?

    Didn’t we just have an article here about dollar stores and the first comment was about a factory just sticking different labels on the same can?

  48. lizzybee says:

    Quaker’s already done this, but without all the fanfare, so it doesn’t surprise me to see General Mills following the “pioneers” of this trend. Oddly enough, the organic cereals have remained the same price in the same-sized box, AND they’re a dollar cheaper. Plus, they’re less processed and taste better. I’ve been buying a lot of Barbara’s Puffins lately.

    http://www.worldpantry.com/cgi-bin/ncommerce/ExecMacro/bar

  49. dohtem says:

    @Karmakin: In the past year or so, those have become very rare at my safeway. The best deals I see are usually $3/box.

    We go through cereal pretty quick too :(

  50. adrock75 says:

    Well, I’m sold, where do I get in line?
    I’ve seen some restaurants do this, but the portion size is smaller and the price is smaller. That makes sense.
    This is just crazy.

  51. Dervish says:

    @Hexum2600: Take it easy. I said I know first-hand that it doesn’t happen with this particular brand of cereal. Yes, it was a qualified statement, but I’d appreciate it if you read it before calling me an idiot. For a well-known brand name like General Mills it doesn’t make a ton of sense to do this because part of what they’re selling is a name.

    If you’re Flavorite or some other brand that’s already seen as a lower quality product, then it makes more sense to sell under as many different names as you can, because you’re not selling what’s regarded as a premium product.

  52. bbbici says:

    “@bbbici: “This is just gouging made possible by consumers’ awareness of rising fuel and corn prices.”

    Sorry, but where are you getting this information? Ingredient and freight costs have, in fact, gone up significantly in the past 18 months or so.”

    In your typical box of cereal, ingredient costs are maybe 10% of the purchase price. Processing, company overhead and pay, manufacturer profit, advertising, and shipping make up about another 50%. 40% goes to the retailer. Therefore, for a $5 box of cereal, about 0.50 goes to ingredients. If ALL ingredient prices doubled (which they haven’t), the price of a box of cereal should therefore increase by no more than 0.50. The increased shipping cost per box of cereal is marginal, pennies.

  53. Dervish says:

    @bbbici: I see what you’re getting at, but it’s not just ingredients that have gone up in price. Packaging is more expensive. Energy is more expensive, which increases company overhead and manufacturing. Manufacturers (from the info I’ve been privvy to) have been eating at least some of this cost increase over the past few years, but margins are thin for this product platform and at some point the cost needs to be passed on.

    I’m sorry I don’t have concrete figures, but I don’t work in costing. And I’m not saying that they’re increasing costs without the intention of putting extra pennies in their pocket, because that’s not how business works. But it’s not part of some grand conspiracy. This cost increase has probably been on deck for a long time, but in this particular industry no company wants to be the first to do anything because they’ll take such a hit from it. General Mills was just waiting for someone (i.e., Quaker) to do it first. Kellogg’s and Post may follow suit in the near future.

  54. barbarareller says:

    @zaky: I, too, live in NYC and for a lot longer than 2 years. I’ve never paid $5.00 for cereal. You’re just shopping in the wrong places. Food Emporium is very over-priced. So is D’agostino’s. For cereals try sales at Rite-Aid, Walgreen’s or CVS. This week I got two 15 oz. boxes of Cheerios for $4 (less a coupon for .75) Even Food Emporium had them on sale this week 2 for $6. If it’s too much trouble to check sales at the local stores,or to buy in bulk, or buy generic brands,and you have money to burn, walk in to any store and pay whatever they ask for what you want whether it’s for cereal, cell phones or cars.

  55. cabinaero says:

    I’m trying to not violate a couple NDA’s here, but I think I can safely say that General Mills took about 9 cubic inches out of their boxes.

  56. Dervish says:

    @cabinaero: Really, you too?

  57. cabinaero says:

    @Dervish: Yeah me too. I don’t work for the Mills directly but, instead, work for suppliers which are involved in the pacakging retool down to the smaller boxes. (Not at the box plants or the bakeries. Think more upstream.)

  58. Uriel says:

    general mills can take their new smaller boxes, crank up some Weezer, and weeze’em up their asses.

  59. veronykah says:

    How come no one has mentioned TARGET???
    Their cereal is amazingly cheap and their Target brand versions of the “real thing” are actually GOOD and come in a box…not to mention they are usually 1.97.
    Mini wheats for 1.97, cinnamon toast crunch for 1.97…all the Target brand food I’ve tried so far has been good and its REALLY cheap.

  60. Grrrrrrr, now with two buns made of bacon. says:

    I either go with the Malt-O-Meal bags or the DeMoulas store brand. Admittedly, I’m not a cereal snob, but I really can’t tell the difference (except for the 50% I save).

    As a side note, yes, gasoline was $1.00 a gallon in the fall/winter of 1999. I filled up my generator before Y2K in December of 1999, and regular was 99 cents a gallon. Oil was below $20 a barrel.

  61. TheUpMyAssPlayers says:


    Mmmmmmm, my daily 1/2 cup of Oatmeal (dry, before cooking) looks even better. One big tube of Quaker instant lasts me nearly a month AND gives me 4 grams of fiber, 2 of which are soluble. Only Cheerios comes close to that, and it still has sugar.

    Oatmeal with 2 packets of splenda, yumTASTIC, cheap and better for you than overpriced unhealthy cereal.

  62. lindyman77 says:

    The corporate spin doctors never cease to amaze me with the nonsense they come up with. I have to hand it to them for spinning this so that somehow in the eyes of General Mills the customer is coming out on top.

  63. Ryan Duff says:

    Companies have been doing this for years… it’s nothing new. Apparently GM still hasn’t found the “Right Size or Right Price.”

  64. Jaysyn was banned for: http://consumerist.com/5032912/the-subprime-meltdown-will-be-nothing-compared-to-the-prime-meltdown#c7042646 says:

    Tell GM what you think about companies that insult your intelligence. I did.

    http://consumercontacts.generalmills.com/ConsolidatedConta

  65. JohnMc says:

    The part I never understood is why repackage? All those changes take $$ to implement. More I would suggest that would just raising the price at the register.

    I buy our cereal in the big plastic bags, no box. Saves money, has the same product.

  66. FLConsumer says:

    I refuse to support and industry which was founded upon the ramblings of a white-supremacist quack doctor who was totally obsessed with his bowels, enemas, vegetarianism, genital mutilation, and thought sexual activity, eating meat, and drinking alcohol & caffeine were the worst thing you could do to a human body.

  67. bradite says:

    Hooray for Ethanol!

  68. ancientsociety says:

    “as they get squeezed by…fresh and organic food.”

    This is precisely why I pay more for them – because they aren’t genetically engineered and pumped with preservatives.

  69. Wally East says:

    @Ponygirl: Where the heck do you think the government got the number from? You think it’s made up? You think your memory of what you paid for gas SEVEN YEARS ago in one location overrides collecting data as events happened on a national scale? Did YOU check the link? All Grades for the whole year for the whole country. ALL GRADES. For the WHOLE YEAR. For the WHOLE COUNTRY.

    So, OF COURSE you remember getting gas for less than that. You probably bought regular at the cheapest gas station in your area. I would expect that. That, however, does not reflect the average price of gas.

    What is wrong with people? The government isn’t ALWAYS lying to us. Only sometimes and usually about the important stuff.

    @Starfury: Thanks for the tip. $3 for a half-gallon of cream is a HUGE savings!

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  71. cabinaero says:

    @JohnMc: Reducing the retail carton size means you can reduce the shipper size which means you can fit more shippers on a pallet.