Whether or not cereal bars can be fast, they should be hospitable, according to Steve Stallman, president for Stallman Marketing, who researched the cereal bar concept last year.

Cereal is still America's favorite breakfast food, but, until recently, the easiest way to get a bowl was buy a box at the grocery store.

That is beginning to change, however. A few quick-service cereal cafes - or bars - are beginning to pop up near college campuses and in big U.S. cities. They attract everyone from 20-somethings to families. And like an ice cream shop or salad bar, customers can create a custom bowl of cereal with their choice of toppings and milk varieties. "What makes this interesting to me is that a group of people are trying a new way to [market cereal]," says Harry Balzer, vice president of marketing research firm NPD Group. His concern, however - in this increasingly on-the-go culture - is how to make it fast. "It's the right category; it's a great idea," he says, but "I'm not sure ordering in a store, waiting in line and eating there is making [customers'] lives easier."

He notes the key is to develop repeat business by creating a time and money savings for consumers.

Whether or not cereal bars can be fast, they should be hospitable, according to Steve Stallman, president for Stallman Marketing, who researched the cereal bar concept last year. "It needs to be a place that is inviting for students to hang out - this means free wireless [Internet] and an inviting atmosphere," he says. "Many different types of atmospheres might work - the trick is that it is seen as a happening place, a good place to connect with known friends and, secondary, to meet others."

Kenneth Rader, president and CEO of Miami's The Cereal Bowl, has found success in creating a cereal bar with many of those features. Last year, Rader - along with twin brother, Joshua Rader, and friend Michael Glassman, all 25 years old -The Cereal Bowl across from the University of Miami. Kenneth Rader says the company expects to exceed $350,000 sales in its first year.

"While we were all in college, Starbucks was really starting to break," he recalls, as well as other single-item concepts such as Cinnabon. It started as sort of a joke, but the more the three thought about it, the more it made sense. "Everyone loves cereal," Rader says. "We realized that there were a lot of QSRs [whose items] are not as popular as cereal."

In addition to cereal, the store offers cereal bars, oatmeal smoothies and other proprietary recipes. Wi-Fi Internet, couches, TVs and reading materials round out the concept. "We're trying to make our stores a social place," he says, where grownups can have a parfait and their kids can have sugary snacks, for example. The Cereal Bowl is moving full steam ahead - with 1,000 franchise inquiries, it just hired a vice president of franchising and expects to open 10 to 15 new stores in 2007. "There's a big market out there," Rader adds.

Making it Work
Seena Sharp, principal of Sharp Market Intelligence, says the cereal bar concept is a viable concept because it taps into several preferences that customers seek, including customization and portion control.

"It's similar to the salad bar, which has proved popular for decades," she says. "The concept [is] familiar and easily understood."

But aside from being a user-friendly cereal-and-milk joint, Stallman says, those entering the cereal bar sector must take the lead from Starbucks and what it represents: quality. "This could be [achieved by] creating their own brand or co-oping with a brand," he says.

The Cereal Bowl and Chicago-based Cereality Cereal Bar & Café both offer the same brands found in the cereal aisle at the grocery store, such as General Mills and Kellogg's, in addition to proprietary items.

According to Lisa Kovitz, Cereality's spokesperson, part of cereal bars' appeal is nostalgia. "Cereal is the first food kids could prepare for themselves; it's the first food you have a choice in," she says. "My mom says Kellogg's was the first word I could read." Cereality's founders David Roth and Rick Bacher were inspired to open their concept in 2003 after a simple observation: many people never outgrow cereal - some still enjoy the same varieties they ate when they were kids.

"Rick was in a business meeting when he caught a consultant sneaking Cocoa Puffs behind the desk," Kovitz says. "When he asked about it, others said, ‘We all do this. We all have boxes of cereal in our cubes and break room.'"

So in 2003 - even at the height of the low-carb/sugar craze - the duo set up a pilot Cereality location at Arizona State University that was "under the radar," Kovitz says. The reaction was so positive, they soon had 7,000 franchise requests. In 2005, they decided it was time to expand and sent out franchise applications to interested parties. Within an hour, they received 100 completed applications.

For Cereality, Kovitz says, it's always been about brand building and creating a unique customer experience. "We're not a restaurant, we're an experience," she says. "It's about the look and feel."

For example, Cereality's employees wear pajamas to go with the company's "Always Saturday Morning," tagline. When it comes to innovation, the company invented the Sloop, which is a spoon/ straw that allows people to drink leftover milk without making a mess. Creativity and innovation are expected to keep Cereality at the cutting edge as competition heightens, Kovitz says.

Beyond Breakfast
Stallman, who says he was responsible for figuring out how bagel chains could make lunch viable, adds cereal bars also must aggressively go after other day-parts.

"These breakfast bars must build - at least - a strong lunch concept," he says. "They already have 85 percent of the overhead [or fixed costs] - virtually everything except the extra labor time, and possibly some extra equipment, [so] it should be utilized. I feel this is essential for profitability."

The Cereal Bowl is doing that by not only offering "anytime" snacks, but filling in gaps by offering in-store party packages and catering. "It's not just about cereal and milk," Rader says.

Cereality also offers parfaits, cereal bars and smoothies, and continues to innovate its menu. It also offers catering, customizable cereal boxes, private parties and franchise opportunities.