A Look at What's Inside Malt-O-Meal's Sustainability Bag

As a small, discount cereal brand going up against General Mills and Kellogg's, Malt-O-Meal has cooked efficiency into operations for decades.

"We've always been positioned as an innovative cereal company that was going to go to market at more affordable prices," said Linda Fisher, Malt-O-Meal's consumer marketing manager. "So when you are focused for years on innovation to reduce costs, conservation and saving resources are key areas."

In other words, when cost is your primary selling point, you will do everything possible to boost efficiency to keep costs down. In recent years Malt-O-Meal has started to expand its focus beyond simply being more efficient. It's set down a formal sustainability program, developed environmental goals and looked at where it could eke out further gains. Last month, the company took a big step into green marketing -- you can read our coverage of that initiative here.

The company has also run into unique hurdles as a smaller player that's growing market share for its bagged cereals, such as Cinnamon Toasters and Honey Graham Squares, as well as challeges posed by its reliance mainly on bags (a couple brands are boxed) for packaging.

Malt-O-Meal's sustainability effort targets four areas: energy, water, waste and packaging. On the energy side, the company's manufacturing plants have conservation programs, it's involved in the U.S. EPA's SmartWay Transport program, and since 2006 has been purchasing renewable energy from utilities and renewable energy certificates to offset the energy used to make its Mom's Best Naturals, Bear River Valley, Three Sisters and Isabel's Way brands.

The company is also bringing green building features like occupancy sensors, Energy Star equipment and daylight harvesting to its facilities, starting with its Asheboro, N.C., manufacturing facility. But in keeping with its thrifty ways, Fisher said Malt-O-Meal won't pursue LEED certification because of the application and certification costs.

For water, Malt-O-Meal has reduced the amount of water used to make a pound of product by 41 percent over the last 15 years by eliminating water use where possible and capturing used water for reuse in non-production operations.

Although the company has no specific further water reduction goal, it does for waste. Malt-O-Meal's five manufacturing plants are aiming to keep 99 percent of their solid waste out of landfills. The largest plant, in Northfield, Minn., is at 95 percent, the bulk of which is food waste that is sold as animal feed.

And for packaging, the company in 2009 commissioned research firm Franklin Associates to conduct a life cycle assessment of its packaging, finding that its bags are responsible for 77 percent less solid waste and a 58 percent smaller carbon footprint that similarly-sized bags in boxes. It's now looking at how to add recycled plastic to the bags.

The company has since used its packaging as a sustainability selling point for its cereal, comparing its impacts against companies that sell cereal in boxed bags. Around the same time of the LCA, the company made its first forays into public relations -- opposition from a board member meant Malt-O-Meal had had no PR efforts until recently. While we found some faults with its Bag The Box campaign, the campaign highlights the opportunities as well as risks companies face when they first dive into green marketing -- or any kind of marketing.

Growing Sustainably

Rapid growth brings another set of opportunities and risks, from both a business perspective as well as a sustainability perspective. Malt-O-Meal has seen its market share double to 10 percent in the last five years (although some stores refuse to carry them since bags can't be stored and displayed as neatly as boxes), and is expanding to meet that growth. The company built two of its three cold cereal manufacturing plants since 2000, laying claim to be the only cereal company to build new plants in the last decade. 

Fisher said that Malt-O-Meal took economic and environmental impacts into consideration when siting its new plants, locating them in Tremonton, Utah, and Asheville, North Carolina. With its first plant in Minnesota, Malt-O-Meal now has facilities closer to customers on both coasts and the Midwest, cutting shipping costs and emissions. 

But a side effect to operating new plants has been an increased environmental impact. Malt-O-Meal measures its impacts per pound of product, and because the Asheville plant isn't yet producing at full capacity, it is applying fixed costs to smaller production runs.

Even though it's a smaller company, Malt-O-Meal has faced the same struggles that much bigger firms have with harnessing and managing the individual efforts of its 1,700 employees, who are spread across five manufacturing plants, eight distribution centers and its Minneapolis headquarters. Fisher said small groups in each plant have taken up 22 initiatives around saving water, recycling plastic waste and more, but the company has no formal method for tracking all those little efforts.

It has, though, used its sustainability steering committee, created in 2006, as a way to bring up employee ideas to top management. The committee is made up of senior managers from production, operations, marketing and sales, and they propose sustainability initiatives.

"Participation in this is somewhat integrated into their regular jobs," Fisher said. "A lot of the good ideas come up from employees and employee engagement."

The company also provides profit sharing for employees, and when it gives out bonuses, every single employee gets one, cultivating a culture that rewards efficiency, productivity, innovation and cost-cutting.

Even though we half-mockingly called Malt-O-Meal's Bag the Box campaign "half in the bag," the company's efforts offer an important look at just how challenging it can be for any company to get up to speed on sustainability issues. "We didn't start out to be green," Fisher said, but it's where the company is headed.