Breakfast Business Finds a Niche

Business is booming for these entrepreneurs, and they’re not worried about the competition.

When we profiled entrepreneurs David Roth, 44, and Rick Bacher, 38, in our March 2005 issue, their innovative cereal restaurant concept, Cereality, was as fresh as the milk they served. Fast-forward to the pres-ent, and several businesses are dishing out cereal in a similar cafe fashion, including Bowls: A Cereal Joint, The Cereal Bowl and Cerealicious.

Like Cereality, all three competitors sprouted up on or near college campuses. Bowls opened near the University of Florida in Gainesville in 2005 before relocating to North Carolina State in Raleigh. Bowls founder Rocco Monteleone, who says he has never been to a Cereality location, offers croissants, salads and sandwiches in addition to cereal and has created more of a “hangout” feel to his space, which he shares with a hamburger restaurant. Monteleone, 39, projects 2007 sales of $50,000 and is focusing on making the first location a success before planning any expansion.

In 2006, Michael Glassman and Kenneth and Joshua Rader, all 25, opened the doors to Miami-based The Cereal Bowl across from the University of Miami. Projecting first-year sales to reach between $350,000 and $400,000, they’re scouting additional locations and will start franchising next month. The partners serve a variety of cereals, but unique items such as “Oaties” (oatmeal smoothies) and custom cereal-flavored frozen yogurt set them apart. The company has partner-ships with Taylor’s Equipment, Seattle’s Best Coffee and Grandy Oats Granola.

Meanwhile, with four locations open in three states since its launch in 2003, Chicago-based Cereality is pursuing area development franchising and multichannel deals, but that’s just the start of their brand-building effort. Catering large events, Cereality also gets personal with customizable cereal boxes. It partnered with Dodge, turning a Dodge Sprinter into a mobile cereal cafe that toured the country, and is working on a multiyear global deal with a major food manufacturer to license Cereality for snack foods. The company already makes cereal bars as giveaways for companies like Old Navy and is in talks with various hotel chains to create room-service offerings. Says Roth, “We’ve taken a simple idea of giving people cereal in a restaurant-like setting and turned it into an enterprise.”

Roth isn’t sweating the competition, either, saying, “It’s like, ‘Oh, you serve coffee, too?’”