Hot cereal: Portioned for prosperity

by Eric Schroeder
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It may be hard to imagine that instant oatmeal and hot cereal could get much more convenient than the traditional single-serve packages that have dominated the market for years. Consumers have been able to grab a bowl, mix the oatmeal with water or milk and set the microwave for 2 minutes or less to get a steaming hot bowl of breakfast.

But in recent years several hot cereal manufacturers have shifted away from the package and provided a disposable cup, giving consumers even more convenience. The trend has helped heat up the category.

In the 52 weeks ended Dec. 29, 2013, dollar sales of the hot cereal category totaled $1,247,208,000, up 2.4% from the same period a year ago, according to Information Resources, Inc., a Chicago-based market research firm. Unit sales also have increased, rising 4% to 464,395,600.

The Quaker Oats Co., a division of Purchase, N.Y.-based PepsiCo, Inc., is the overwhelming leader in the hot cereal category with dollar sales of $709,100,800, good enough for a nearly 57% share of the segment. In the 52 weeks ended Dec. 29, Quaker’s dollar sales were up 1.4%, while unit sales rose 5%.

Quaker Real Medleys have been a big “win” for the company since their launch nearly two years ago. Combining fruit or nuts with oatmeal in a portable and portion-controlled cup, the product initially was geared toward women looking for a wholesome breakfast, but judging by sales figures, the product has been well received by a much broader audience.

In the 52 weeks ended Dec. 29, dollar sales of Quaker Real Medleys were $44,910,080, up 85% from the same period a year ago. Real Medleys initially were available in apple walnut, summer berry, peach almond and cherry pistachio varieties, and Quaker also recently has added a blueberry hazelnut flavor. Each 2.57-oz cup has 290 calories and 5 grams of fiber.

Another successful hot cereal product being marketed by Quaker features a different type of convenience. Introduced in April 2013, Perfect Portions is a multi-serve instant oatmeal without added sugar that comes in a re-sealable package. The oatmeal is available in two flavors: cinnamon and maple.

“More than half of moms say they have made multiple dishes during a meal in order to satisfy each family member’s taste preferences,” Andrew Sutherland, senior director of marketing for Quaker Oats, said when the product was launched last year. “Quaker Perfect Portions allows parents to easily tailor different oatmeal options for their families while knowing they are getting healthy fuel for energy to take on their everyday adventures.”

Both varieties of Perfect Portions contain 2 grams of soluble fiber per 45-gram serving.

In the 52 weeks ended Dec. 29, dollar sales of Perfect Portions totaled $4,922,162 on unit sales of 2,561,542, according to I.R.I.

Kellogg looks to nourish

Also last spring, The Kellogg Co., Battle Creek, Mich., continued its march beyond the traditional ready-to-eat cereal market with the launch of Special K Nourish, a line of hot cereal and bars. With such ingredients as quinoa, fruit, nuts and seeds, the individually packaged products offer both portability and nutrition benefits.

Packaged in single-serve microwavable cups, the hot cereals contain a whole grain blend of quinoa, oats, wheat and barley, plus nuts and fruit in a removable cap that may be stirred in. In maple brown sugar crunch, cranberry almond and cinnamon raisin pecan varieties, the products contain 5 grams of fiber and 8 grams of protein per serving.

In less than a year on the market, Special K Nourish generated $8,978,826 in dollar sales in the 52 weeks ended Dec. 29, according to I.R.I.

Better oats, better product?

As the Better Oats instant oatmeal brand enters its fourth year on the market, Red Engine Foods (a unit of Minneapolis-based MOM Brands) continues to push its way up the list of leading hot cereal makers. With dollar sales of $20,399,570 in the 52 weeks ended Dec. 29, Red Engine Foods still has work to do, but appears headed on the right track.

The company’s Better Oats Revolution line posted dollar sales of $10,611,200 in the 52 weeks ended Dec. 29, according to I.R.I., up 22% from the same period a year ago. Last summer, the company added to the line with the introduction of three new steel cut instant oatmeal varieties, a product the company described as “one of the fastest cooking steel cut oats products on the market.”

Available in three varieties — maple and brown sugar, classic and apples and cinnamon — the steel cut oats have flaxseed and carry the 100% Whole Grain Stamp from the Whole Grains Council. The oatmeal also includes a built-in measuring cup pouch.

“This innovative new oatmeal is great for busy people who want the taste and texture of slow-cook steel cut-oatmeal, as well as the speed of cooking by microwave,” said Linda Fisher, director of corporate communications for MOM Brands.

Also within the Better Oats line is “Fit.” Considered a good source of fiber with 100 calories, Better Oats Fit oatmeal had sales of $4,020,400 in the 52 weeks ended Dec. 29, up 56% from the same period a year ago.
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