Jan. 26 (Bloomberg) -- Kellogg Co., the world’s largest cereal maker, reconfigured the size of its boxes in an effort to sell more Froot Loops and Special K at Wal-Mart Stores Inc. and Kroger Co. stores in Detroit.

Kellogg is replacing cereal at 40 Wal-Mart and Kroger stores with shorter, deeper containers that hold the same amount, Kim Miller, vice president of morning-foods marketing, said in a telephone interview. The six-month test starts today.

Manufacturers of consumer goods from laundry detergent to milk have changed the size and shape of packaging in response to retailers who want to free up shelf space to stock more varieties and cut down on waste.

“It’s a shorter and deeper pack, yet still has the same amount of cereal,” Miller said. “By optimizing the geometry, we were able to reduce the size of the actual box without reducing the amount of cereal.”

After several years of research, Kellogg reduced packaging by 8 percent for the test, wagering that consumers who lack kitchen storage will buy cereal in smaller boxes, Miller said.

Consumers put cereal boxes “on top of refrigerators, on countertops, lying down and on their sides,” Miller, 43, said today from Battle Creek, Michigan, Kellogg’s hometown. “Retailers are taking a similar direction, trying to optimize shelf space.”

Wal-Mart, the world’s largest retailer, sells the most groceries in the U.S., followed by Cincinnati-based Kroger. Those companies will track Kellogg’s cereal sales in Detroit to help the maker of Corn Flakes and Frosted Mini-Wheats decide whether to expand sales of the smaller boxes nationally, Miller said.

Same Price, Placement

The cereal will sell for the same price as regular-sized boxes and receive the same placement in stores, Miller said.

Kellogg won’t disclose how much it’s spent developing smaller containers or how much it would cost to adjust manufacturing to roll out the new packaging across the U.S., Miller said.

Wal-Mart Chief Executive Officer H. Lee Scott mentioned Kellogg’s smaller boxes last year as part of the retailer’s efforts to reduce packaging waste and take other steps to help the environment.

Scott, who retires Jan. 31, and other Wal-Mart executives plan to hold a conference call later today to discuss the Bentonville, Arkansas-based company’s sustainability efforts.

Wal-Mart has rewarded manufacturers that reduce excess packaging with prominent display space, said Craig Herkert, CEO of Wal-Mart’s Americas region. He’s scheduled to take part in today’s call.

‘A Winning Proposition’

“Our goal is not to sit back and wait for suppliers to come to us,” Herkert said in a telephone interview Jan. 23. Wal-Mart “doesn’t force the supplier community to get on board but so overwhelms and rewards those who do that it causes everyone to get on board.”

Kellogg views the smaller boxes “as a winning proposition,” Miller said. “We hope consumers appreciate it and retailers get the advantage on shelf space. Lastly, we’re pushing in the right direction on sustainability.”

Shrinking boxes without reducing the amount of cereal is the biggest innovation in cereal boxes since the 1950s, when Kellogg starting placing pictures on boxes, said Susanne Norwitz, a company spokeswoman.

“Rethinking the geometry of the box” was one of Kellogg’s challenges, Miller said. Another was figuring out how to “take air space out of the pack” without diminishing the freshness of the cereal. “Some air is needed just to protect the food,” she said.

Kellogg rose 48 cents to $44.71 at 4:02 p.m. in New York Stock Exchange composite trading. The stock has risen 2 percent this year, after dropping 16 percent in 2008.

To contact the reporter on this story: Chris Burritt in Greensboro, North Carolina, at 1348 or cburritt@bloomberg.net

Last Updated: January 26, 2009 16:26 EST