Deborah Cross, Euromonitor International
Times are changing in Western markets as time-pressed breakfast consumers demand convenience served up with value when rushing out to school or work. Many miss breakfast altogether, and reports of children arriving at school without having eaten are becoming common. In 2014, some UK schools are now considering imposing fines on parents if children are late for lessons, so the problem could intensify. Commuting consumers in large cities also like to grab and go by purchasing from foodservice establishments while traditional cereals have faced a slow decline in volume sales for several years.
Cereal’s chance for revival
In Western markets, cereal volumes have been supported by heavy promotional activity to build brand strength. The US preferred flaked cereals in 2013 while the UK and Ireland preferred hot cereals and muesli. Even in these markets, there are untapped demographic groups. The Kellogg Company’s recently launched RTE indulgence cereal Krave (Trésor), targeted at young adults (aged 16-25), has performed strongly in the UK and US markets and increased its value share in France from 6% to 16% since 2008.
Another such untapped demographic is that of the healthy and more mature consumer (aged 50-65), These consumers want value for money and are interested in preventive health but are currently restricted to consuming the same family breakfast cereals as everyone else. Ingredient choice is also a factor. In January 2014, Nestlé, Vevey, Switzerland, filed a patent for manufacturing extruded puff cereals from purple sweet potatoes containing antioxidant anthocyanins.
At present, there are only a few cereals incorporating functional ingredients, for example Kashi Heart to Heart Apple Cinnamon Oatmeal from Kellogg Company, Battle Creek, Michigan, US, and Oats So Simple from Pepsico, Purchase, New York, US. Added protein is also a popular trend, marketed as the selling point in Kashi’s GOLEAN and Kellogg’s Special K Protein Plus cereals.
Breakfast meets snacking
In Ireland, the consumption of cereals is not restricted to breakfast time, with consumers snacking on cereals at other times of the day. Cereal companies have recognized this with the latest breakfast products seeking to tap into the snacking trend. In 2012, Kellogg acquired Procter & Gamble’s Pringles brand, equipping itself with intellectual property in snacks and an entire emerging market supply chain to grow its cereals and snacks business.
Also in 2012, General Mills, Minneapolis, Minnesota, US, acquired Brazilian packaged food company Yoki Alimentos SA, São Paulo, taking its existing snacks business, including the Nature Valley brand, to Latin America. Further innovations in 2013-14 have targeted meal replacements, offering consumers alternative fiber- and protein-fortified breakfast milk-based shakes, with products like To Go from Kellogg in 2013 and On-the-Go, launched by Weetabix, Burton Latimer, UK, in January. Other types of bakery and frozen processed food products have also been breakfast targets, for example, Mondelez International’s Belvita biscuits and Kellogg’s Eggo Waffles and Pop Tarts.
Looking to 2018, the most dynamic areas in the global breakfast cereals market will be hot cereals and muesli/granola, similar to the dynamism within global snack bars. The Jordans brand from Associated British Foods, London, made the small jump from muesli/granola cereal to granola/muesli snack bars. Organic breakfast cereals with food intolerance considerations also appeal to consumers such as the children’s gluten-free cereal ranges from Nature’s Path, Richmond, BC, which also launched Nice and Nobbly Granola bars in the UK in 2014.
Alternative breakfast products already offer strong potential for growth in emerging markets. Hot cereals are already performing well in India and China, where they are similar to traditional congees. With further innovations expected, alternative breakfast products have enormous potential and should be ones to watch in 2014. It would be particularly exciting for companies to infiltrate the emerging markets with snack bars, although the transition could take two to five years.
For further insight, please contact Deborah Cross, PhD, Euromonitor International’s Food Analyst, at email@example.com.