Catalina Crunch capitalizes on demand for better-for-you cereal, launches Pairings line for texture twist

“We've launched Pairings, and we have some early adoption from some retailers, [and] we see that the sales are strong. It's been just a little less than a week since we launched it online, but this has been our best product launch to date online through our website.​”

Tapping into consumer trends around toppings, better-for-you

Available in 8 oz. pouches, the Catalina Crunch Pairings series will be available​ as Blueberry Muffin Cereal with Whole Blueberries and Honey Nut Cereal with Roasted Almonds varieties and can be currently purchased from the company’s website with retail distribution starting in early 2024. Each are 100% vegan, gluten-free, keto-friendly, non-GMO, and feature one gram of sugar per serving while providing 25% of dietary fiber and 16% of daily protein needs.

Catalina Crunch found an opportunity to innovate around inclusions after finding many consumers add other ingredients to their cereal, Kaliannan said. The Honey Nut Cereal was a “very popular, long requested flavor from [Catalina’s] consumers​” and includes sliced almonds, and the Blueberry Muffin Cereal features dried blueberries, he added.  

“We talked to ... about 3,500 consumers as part of a large research study, trying to better understand what they liked and didn't like in our cereals and competitors’ cereals. And one of the things that stood out to us was consumers, many of them, were already adding toppings to our cereal when they were eating, over 50% of consumers.​”

Bringing consumers back to the cereal aisle with natural, better-for-you cereals

Catalina Crunch is focusing on the "conventional set" of brands and providing a better-for-you alternative to sugary cereals, noting that the other natural, better-for-you cereal brands aren't its targeted competitors, Kaliannan said. 

“These cereals are 1/3 sugar or more, and in some cases as much sugar [as] you'd find in gummy bears, for example. And kind of passing it off as if it's a healthy good start to the day, and so that's what we really see as our competition.​”

Though better-for-you cereals often come with a price premium and could be a candidate for trading down, Kaliannan noted that Catalina hasn’t noticed “any real inflationary pressure,​” and the brand is “still growing very strongly.​” Part of the growth is coming from strong retailer expansion, as grocers see increased demand from consumers for better-for-you-cereals.

“While the conventional cereal set has been declining for a long time, but the natural and better-for-you part of the cereal aisle has been growing in sales. And it's almost like consumers are rediscovering that cereal can be healthy, and so they're excited about that. Some of the [retailers] that I see doing the best ... are starting to increase the size of the natural or better-for-you set relative to the amount of space for the conventional set, and they’re increased sales as a result.​”

Growing distribution, supporting digital avenues

The brand is also expanding distribution across its portfolio of products and raising awareness of its brand overall, Kaliannan said. “By the end of this year, we want to be at 30% aided awareness, and we think that's very doable based on how we're tracking thus far,​” he added.

Over the last year, Catalina Crunch has already seen “strong and fast increases in distribution as well as velocities on shelf, so both unit sales and dollar sales,​” Kaliannan said. Catalina Crunch has “gained about 32,000 points of distribution​” and dollar “growth is up ... around 70%​” year-over-year, he said.

Additionally, Catalina Crunch is balancing online channels and “investing proportional to the number of consumers that are interested in​” a given channel, Kaliannan explained. This includes making sure that Catalina Crunch’s cereal appears on search pages, and that the brand is “describing [its] cereal in a succinct way, so that consumers can understand the benefits of it, and the ultimately purchase it,​” he added.

“We have consumers that are buying, going into the store, and buying products in the store. Then we have the online pickup and delivery portion, ... and then we have folks that are going to CatalinaCrunch.com or going to Amazon and having the product shipped directly to their door. So, our goal is to be present in all three of these shopping environments.​”