Hot cereal category looks to heat up

by Eric Schroeder
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Quaker Chef'd partnership
In December, Quaker partnered with Chef’d, an on-line meal kit delivery service, to offer three Quaker-branded Overnight Oats meals.

KANSAS CITY — The hot cereal category could use some warming up.

In the 52 weeks ended Dec. 25, 2016, dollar sales in the hot cereal/oatmeal category totaled $1,294,132,352, down 1.3% from the same period a year ago, while unit sales dipped 0.27% to 480,304,832, according to Information Resources, Inc., a Chicago-based market research firm.

Quaker Oats Co., a division of Purchase, N.Y.-based PepsiCo, Inc., is the dominant player in the hot cereal category with more than $773 million in annual sales, or about 60% of total dollar sales for the segment. In the 52 weeks ended Dec. 25, Quaker’s hot cereal/oatmeal dollar sales were down 0.24% from the same period a year ago.

Quaker oatmeal
 

 

The hot cereal maker has seen wide-ranging success across its product portfolio over the past year, from 20% year-over-year dollar sales growth in its Quaker Protein line to an 18% decline in its Quaker High Fiber line. Dollar sales of Quaker Lower Sugar moved up 17% over the past year, while Quaker Real Medleys declined 13%, according to I.R.I.

Quaker in January 2016 introduced gluten-free oatmeal in three varieties: Quaker Quick 1-Minute Standard Oats (18-oz canister), and Quaker Instant Oatmeal (single-serve pouches) in both original and maple and brown sugar flavors. The products were added to the brand’s Select Starts line, which includes Instant Quaker Oatmeal offerings that address a variety of consumer preferences, such as protein and fiber. In the 52 weeks ended Dec. 25, dollar sales of the Quaker Select Starts line totaled $5,028,391, according to I.R.I.

Becky Frankiewicz, Quaker
Becky Frankiewicz, vice-president and general manager of Quaker Foods North America

“At Quaker, we’re always striving to deliver products that meet families’ evolving needs,” said Becky Frankiewicz, vice-president and general manager of Quaker Foods North America. “Requests for gluten-free oats have been among the top inquiries from our consumers for the past several years. Our expert millers are the best and most passionate in the business, and they’ve taken the time and extreme care to develop great-tasting, gluten-free offerings in which consumers can be confident.”

One way Quaker has tried to spark interest in the hot cereal category has been through the launch of a program encouraging consumers to soak their favorite oats overnight. The company’s web site features a variety of recipes featuring Quaker oats that may be prepared overnight for a healthy and convenient breakfast the next morning. In December, Quaker partnered with Chef’d, an on-line meal kit delivery service, to offer three Quaker-branded Overnight Oats meals, which were among the first breakfast meal offerings on the Chef’d web site.

“For the last 140 years Quaker has been finding innovative ways to help more people start the day with a delicious, nourishing oatmeal breakfast,” Ms. Frankiewicz said. “With more people than ever using meal kit delivery services, our collaboration with Chef’d allows us to introduce more people to a new way of getting creative in the kitchen with oatmeal.”

Quaker oatmeal
 

 

The three Overnight Oats meal choices — all featuring Quaker Old Fashioned Oats — include Quaker’s signature Blueberry Honey recipe, Chef’d’s Strawberry Blueberry Maple Syrup recipe and Chef’d’s Dried Cherry Banana Pecan & Brown Sugar recipe. Each kit costs $10 for a double serving and contains the pre-portioned ingredients and step-by-step instructions necessary for making the overnight oats, along with a Quaker branded mason jar.

Bob’s Red Mill, Portland, Ore., may be a smaller player in the hot cereal category compared to Quaker, but the company, with its wide array of products, is perhaps one of the most innovative. In the 52 weeks ended Dec. 25, Bob’s Red Mill had dollar sales of $34,773,188 in the hot cereal/oatmeal category, up 15% from the same period a year ago, according to I.R.I.

Bob's Red Mill Oatmeal
 

 

Last July, Bob’s Red Mill introduced a new emblem on its packaging to indicate its commitment to non-bioengineered ingredients. The new “Sourced Non-GMO Pledge” emblem indicates that all ingredients sourced for a product have been declared by their suppliers to have been made without the use of bioengineering. 

“While our commitment to sourcing non-G.M.O. ingredients has always been a part of how we operate, our intent with the Sourced Non-GMO Pledge emblem is to make that commitment very visible to consumers,” said Matthew Cox, vice-president of marketing at Bob’s Red Mill. “As more and more people express a desire to know exactly what is in the food products they consume, our aim is to be as transparent as possible.”

Bob’s Red Mill has documentation verifying that no ingredient was bioengineered and conducts audits of suppliers annually. Additionally, the company sources certified organic ingredients whenever feasible, and by definition, foods that are certified U.S.D.A. organic are made only with ingredients that have not been bioengineered.

Oatmeal chart
 

 

The company also last year debuted gluten-free organic oats, joining its three lines of oats: conventional, organic and gluten-free. According to Bob’s Red Mill, one serving of the company’s gluten-free organic oats contains 14% to 24% of the daily value of dietary fiber, 6 or 7 grams of protein and 1 gram of naturally-occurring sugar.

At Post Holdings, Inc., St. Louis, the acquisition of MOM Brands back in 2015 has provided a boost to the company’s hot cereal platform. Hot cereal/oatmeal dollar sales at Post increased 5% to $42,099,040 in the 52 weeks ended Dec. 25, according to I.R.I. The gains have been driven by success in the Better Oats brand, where dollar sales of Better Oats Oat Fit increased 19% over the past year and Better Oats Oat Revolution increased 3%, according to I.R.I.

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