Breakfast cereals: next in line to embrace outsourcing?

After snacks and ready meals, cereals will be the next major sector to outsource packing and other operations in a big way, according to one entrepreneur.

Mark Bottjer, who put his money where his mouth is by setting up Cerealpack last year, knows the sector well. He turned around the fortunes of Cereal Innovations before selling it on and focusing on contract packing.

"Outsourcing is becoming a trend in the industry, especially where there is a high level of innovation and a question mark over the longevity of brands," says Bottjer, who is md of Cerealpack. "The brand owner is the specialist in sales and marketing, but the logistics and packing can be quite a headache."

As Bottjer explains, brand owners will not always want to install new lines where volumes are still uncertain. "There is little point putting out to a subcontractor an established product such as cornflakes, which as a product seems to go on forever."

While there are many other contract packers able to serve the cereal sector, Cerealpack believes it has the advantage of being able to offer both short-run capabilities and a more comprehensive support service. The company's processing is currently limited to blending for products such as mueslis, and it has no oven processes.

But at least one customer has requested help with product development, says Bottjer.