Cerealicious
A group of young entrepreneurs discovers an untapped market for cereals in a land where rice is the main food staple.
By Katrina Tan; Photos by At Maculangan
The remaining P500,000 went towards their first branch near the University of Santo Tomas (UST). "We decided to get a 15 square meter space in the campus' new parking building because it's a good location and often frequented by our target market," says Balatbat. "The café has five stools, apple green walls, and looks like a warm and cozy kitchen. We wanted customers to feel happy and relaxed while eating their cereal-like being a kid again!"
Cerealicious, however, was not an instant hit. It was only after they revamped their menu a few during UST's semestral break-paying a food specialist P25,000 to create a special milk slush, which Balatbat says "has seven secret ingredients and tastes a bit like melted vanilla ice cream", and forming tie-ups with big brands Kellog's, Nestle, and Post-that Cerealicious became the sensation it is today. Now, the café sells 350 to 400 bowls and makes about P20,000 a day, earning its return of investment in just nine months.
In addition to customers, Cerealicious attracted quite a few franchise inquiries, as well. So as a way to expand the business without shelling out more money, the Cerealicious team decided to become a franchising and trading company in June 2006. Two other friends, Katrina Ronas and Lester Fuentes, signed on as partners in this endeavor, while Zulueta sold some of his shares and became a silent investor.
Two Cerealicious franchises have opened since then. A 42 square meter shop along Taft Avenue, which cost P1.5 million and was opened in August; and the other 32 square meter shop in SM North EDSA, which cost P1.2 million and opened the following month. These stores also experienced a gradual growth. "It usually takes a while before people decide to try the cereal," says Balatbat. "But once they do, they really love it. In fact, about 70 percent of the people in the Taft shop are repeat customers. This store is already doing as well as our first branch!"
The dynamics of the SM North branch are quite different. As opposed to students who are in the vicinity every day, the mall crowd constantly changes and the store can't rely too much on repeat customers. But instead of resorting to advertising and promotional efforts, the Cerealicious team believes that their product is good enough to sell itself. And indeed, daily sales have increased anywhere from P8000 to P16,000; and are steadily rising.
This expansion led them to rent out an office and storage space to accommodate their inventory, which is about P200,000 and the bulk of their monthly expenses-and hold their weekly meetings.
Even with their larger operations, however, these energetic young entrepreneurs are still extremely hands-on. "The hardest part of the business is actually the back end-we still purchase and deliver most of our 100-plus ingredients, hand out fliers, and sometimes run the cashier. As a start-up business, it's necessary to maximize one's resources." says Falcis. "Some people think Cerealicious will be a fad. That's why we're very careful about the stores we open, keep changing our menu, and hold special promos, such as special holiday Blockbusters and frequency cards."
She also adds that, "People say don't do business with friends, but I think it's about choosing the right friends." And indeed, this capable group of friends-turned-partners seems more than able to meet the challenge of increasing clientele and rapid expansion.
Branches:
2 Floor University of Santo Tomas Parking Building, Espana, Manila
Ground Floor Sherwood Plaza, Taft Avenue, Manila
Ground Floor The Block, SM North EDSA, Quezon City
Mobile Number: 0917-4698948
