P 14; DX 251A, Lettmann Dep. at 14-15; DX 251; Leckie Decl. P 14. There are also several smaller, specialized manufacturers of branded RTE cereal products, including Health Valley and Sunshine Biscuit Co. Boehm Decl. P 13. Nabisco, with a 1992 market share of 2.82%, was the sixth largest RTE cereal firm and a fairly weak competitor in the RTE cereal market prior to the Acquisition. Boehm Decl. P 14; Smith Decl. P 15; Thomas Decl. P 10; Carroll Decl. P 15; Rubinfeld Decl. P 9(ii)(a), Figure 1 and Table 1. Nabisco's main strength was its shredded wheat line of cereals. Thomas Decl. P 11; Boehm Decl. P 14; Smith Decl. P 15. Although shredded wheat cereals are popular, Nabisco's sales had been declining since 1988. Thomas Decl. P 10; Smith Decl. P 15.
Private label ("store brand") cereals are a significant and growing presence in the RTE cereal market. See Carroll Decl. P 15. Private label cereal sales have consistently exceeded the growth of the cereal industry as a whole in recent years. Boehm Decl. P 16; Smith Decl. P 24. Gilster-Mary Lee Corp. and Malt-O-Meal Co. produce both branded and private label RTE cereal products, and these companies have grown rapidly in the past few years. Rubinfeld Decl. P 9(ii)(c); DX 250; DX 251; DX 250A, Welge Dep. at 9-11, 15, 18-19; DX 251A, Lettmann Dep. at 14-15.
Actual market shares of the manufacturers in the industry fluctuated significantly during the period 1988-1993. Carroll Decl. P 15. Between 1970 and July 30, 1994, there has been a decline in concentration in the RTE cereal industry of about 27 percent. Rubinfeld Decl. P 60(b); Tr. at 251, 253 (Cotterill).
RTE cereals differ from one another in important respects, including type of grain, degree of sweetness, product form (e.g., flake, nugget, shredded, etc.), texture, flavor, complexity, type of additional ingredients (e.g., nuts and fruit), and perceived health benefits. See Leckie Decl. P 4; Tr. at 822 (Rubinfeld). RTE cereal consumers demand a particularly high level of variety and new products, and firms in the industry compete with one another by, among other things, introducing a high volume of new products to meet that consumer demand. Carroll Decl. PP 17-18, 23.
B. Relevant Geographic Market
The parties agree that the relevant geographic market in which to analyze the Acquisition is the entire United States. Post products are manufactured in four facilities and are distributed throughout the United States. Leckie Decl. P 2. The former Nabisco RTE cereal products were manufactured in two facilities and were distributed throughout the United States. Thomas Decl. P 14. Post sells its RTE cereal products to retailers throughout the United States at a single wholesale price. Leckie Decl. P 50; Schena Decl. P 5; Rubinfeld Decl. P 13(a).
C. Relevant Product Market
1. Consumer Dynamics