Cereal Sticker Shock -- My-Grain Headache: Morning Crunchies Have Soared In Price

The woman was clearly exasperated.

"Why are cereals so expensive?" she asked another shopper as they scanned the cereal aisle in a Seattle supermarket. "And they're all frosted. They're not even good for you."

Actually, some cereals are fairly nutritious, and not all of them are frosted. What's really frosted are shoppers - over sticker-shock prices for their morning crunchies. In the past decade, cereal prices have zoomed up at more than double the rate of all foods and nearly double the general inflation rate.

Here are inflation rates for 1982 to 1992, from the U.S. Department of Agriculture:

-- All goods and services: 45 percent.

-- All food: 42 percent.

-- Cereals: 85 percent.

At that rate, a box of cereal that cost $2 in 1982 would cost $3.70 today. And this wouldn't be a high-end brand. Many cereals now cost more than $4 a box and some more than $5.

Who or what is to blame for cereal prices that bowl you over? High demand and the costly introduction of countless new cereal varieties are two possibilities, theorizes USDA economist Ralph Parlett.

He said the demand probably reflects two consumer trends: the quest for convenience, offered by ready-to-eat cereals, and rising interest in health and nutrition. Americans may be turning more than ever to cereals partly because they're worried about the fat and cholesterol in a traditional bacon-and-egg breakfast.

As for new varieties, the start-up costs - and for some, the failure costs - are high and may play a part in high prices at the store, he said.

EXPENSIVE INGREDIENTS

But a spokesman for Kellogg's, the country's biggest cereal maker, served up a different explanation: the expensive ingredients - nuts, dried fruits, multiple grains, honey - used in many of the newer cereals.

The price of Kellogg's Corn Flakes, the country's No. 1-selling cereal, seems to bear out that explanation. It's a fairly simple product, without costly extras, and its price has risen only 42 percent in the past decade - right in line with the inflation rate for all foods.

Of the 10 top-selling cereals, Kellogg's Corn Flakes is the least expensive, at $2.49 per 18-ounce box, or $2.22 per pound, according to the prices recorded last week at a Seattle supermarket.

The costliest cereal among the top 10 - and one containing expensive ingredients such as almonds - is Honey Nut Cheerios, at $5.19 for a 20-ounce box, or $4.15 per pound, at the same store.

Yet original Cheerios, a simple-formula cereal also on the list, isn't cheap either, at $4.99 per 20-ounce box, or $4 per pound.

Cereal prices partly reflect the large number of cents-off coupons available for these products. "More coupons are issued on ready-to-eat cereals than on any other category in the store," says Nan Redmond of the Post Cereal Division of Kraft General Foods.

And the coupons are heavily used, she said. "Our purchase data . . . indicates that more than 40 percent of cereal purchases are made with coupons."

Northwest shoppers, however, are more likely to pay full price for their cereal. Washington is one of the lowest coupon-redemption areas in the country, says a local supermarket official.

Industry spokesmen cite the rising cost of staples such as wheat and increased costs of labor, health insurance, transportation and marketing as other parts of the cereal price picture, although most of these would affect other foods, too.

At any rate, the consumer's cost for a 1-ounce serving of cereal, with low-fat milk, averages only about 20 cents, two major companies said. For many people, though, 1 ounce would hardly suffice for a meal. Probably more realistic is 2 ounces, averaging 40 cents, or 3 ounces, 60 cents.

Top sellers

How does your favorite brand stack up, cost-wise, against some others? Following are the prices of the 10 top-sellers, as noted at the Seattle store. (Prices vary from store to store; some brands were on "special" at the store visited.) These brands, listed in descending order by total sales, were compiled by Wheat First Securities of Richmond, Va.:

-- Corn Flakes, from Kellogg's: $2.49 per 18-ounce box ($2.22 per pound).

-- Frosted Flakes, Kellogg's: $3.99 per 20-ounce box ($3.20 per pound).

-- Cheerios, General Mills: $4.99 per 20-ounce box ($4 per pound).

-- Raisin Bran, Kellogg's: $4.79 per 25.5-ounce box ($3.01 per pound).

-- Rice Krispies, Kellogg's: $4.09 per 19-ounce box ($3.44 per pound).

-- Chex cereals from Ralston-Purina Co. Wheat Chex: $4.29 per 23.5-ounce box ($2.93 per pound).

-- Honey Nut Cheerios, General Mills: $5.19 per 20-ounce box ($4.15 per pound.)

-- Cap'N Crunch, Quaker Oats Co.: $3.59 per 15-ounce box ($3.83 per pound).

-- Grape-Nuts, General Foods: $2.89 per 16-ounce box ($2.89 per pound).

-- Bran cereals from Kellogg's. All-Bran: $3.35 per 18.3-ounce box ($2.93 per pound).

Most of these top-selling cereals have been around for years and are not part of the past decade's explosion of new products. Kellogg's Corn Flakes is the prime example: It was Kellogg's very first breakfast cereal, making its debut in 1906.

Nor are most of the top 10 particularly aimed at the health-conscious crowd, although several, such as Grape-Nuts, Cheerios, Wheat Chex, All-Bran and Raisin Bran get reasonably high marks for nutrition. All 10 are fortified with vitamins and minerals, but several, such as Cap'N Crunch and Honey Nut Cheerios, are also high in sugar and some are high in sodium.