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Kellogg Testing New Cereal Box that Cuts Packaging

Source: Reuters
27/01/2009

Chicago, Jan 27 - Kellogg Co is testing a shorter box for its breakfast cereals that uses 8 percent less packaging material and takes up less shelf space.

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The test run in stores in Detroit comes as other food and consumer products companies have been revamping their packages to save money on materials and shipping and also in response to environmental concerns.

The new boxes will be deeper and shorter than the standard box of Kellogg's Corn Flakes, Rice Krispies or other cereals, a spokeswoman said. On average, the boxes will occupy 5 percent less cubic space, than their predecessors, but still contain the same amount of cereal as the old box, spokeswoman Susanne Norwitz said.

While Kellogg said the move is "the most significant innovation in cereal boxes since the 1950's," manufacturers have been tinkering with the size of cereal boxes for the past two years, though in those cases the amount of cereal in the box was also reduced.

In 2007, rival General Mills Inc reduced the size of its cereal boxes in order to bring its prices in line with other competitors.

Last year, Kellogg reduced the size of the package of six cereals, a move that raised the price-per-ounce of those cereals.

Kellogg said the new boxes will be tested for six months in Detroit as the company determines whether consumers will accept the new box and what reaction retailers have, the company said.

Kellogg shares were up 15 cents at $44.38 on Monday on the New York Stock Exchange.



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