David vs. Goliath

A cereal maker, a ticket seller, and an accounting firm: Don't underestimate the entrepreneurs behind these nimble small businesses.

Better Oats vs. Quaker Oats
Better Oats vs. Quaker Oats
The challenge: How does an underdog cereal maker grab market share from the biggest name in oatmeal?

What they did : To snag supermarket shelf space from PepsiCo's Quaker, scrappy cereal maker Malt-O-Meal rolled out Better Oats in 2010. The line of 28 varieties of natural and organic oatmeal features flavors like Chai Spiced and Maple Streusel. According to Chris Neugent, CEO of family-owned Malt-O-Meal, Better Oats uses real ingredients like berries and morsels of dark chocolate, and offers convenient pouches that consumers can use to measure water. The Northfield, Minn., company also listens to grocers, using small boxes to help maximize shelf space. Better Oats now sells in 21,000 retail stores, including Safeway and Kroger, and has launched spinoff brands such as Three Sisters, sold only in Whole Foods.

By Elaine Pofeldt, contributor @FortuneMagazine - Last updated February 01 2012: 12:34 PM ET

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