Report: Global breakfast cereal market to reach $43.2 billion by 2019
ALBANY, N.Y. — The global breakfast cereals market, valued at $32.5 billion in 2012, is expected to grow at a compound annual growth rate of 4% for the next several years, reaching $43.2 billion in 2019, according to a new market report from Transparency Market Research.
“The need for convenience and busy schedules of people has been propelling the processed food industry, which includes breakfast cereals,” the market research group said. “Developed nations already have breakfast cereals as part of their regular course of meals. Increasing per capita income in developing countries is further giving the breakfast cereal industry a new dimension to look for.”
Geographically, North America, led by sales in the United States, accounted for the largest share in the breakfast cereals market and was valued at $13.9 billion in 2012, according to Transparency Market Research. But the report also points out that declining market in the United States is prompting companies to increase their presence in emerging markets.
The Kellogg Co., Battle Creek, Mich., for instance, last fall announced plans to expand its cereals and snacks facility in Rayong, Thailand, by early 2015. The plant opened in 1997. The move is part of its “Project K,” which aims to rebuild brands in four key areas: cereal, snacks, frozen foods and emerging markets.
Meanwhile, Minneapolis-based General Mills, Inc., though its Cereal Partners Worldwide joint venture with Nestle S.A., in December 2012 opened a new $35 million breakfast cereal manufacturing facility in Malaysia.
“These companies have been increasing their advertising spends in the emerging markets in Asia Pacific region to make consumers aware about the breakfast cereals and the health benefits associated with them,” the report noted. “Companies have also developed some brands according to the regional preferences, such as inclusion of saffron and raisin flavored cereals in India.”
The Transparency Market Research report also said the projected growth reflects the trend that people in Asia are switching their breakfast patterns from customary heavy foods to packaged cereals.
“Increasing workforce and growing concern for wholesome breakfasts is boosting the breakfast cereals market in (China and India),” the report said. “The growing number of convenience stores has been increasing the brand visibility of breakfast cereals. In the markets of China and South Korea, around 4,000 new stores were opened in 2011. Convenience stores have increased multifold in China. The Guangdong province, in particular, had over 2,000 convenience stores in 2013.”
By 2019, Asia Pacific is expected to have approximately 13% of the total breakfast cereals market, while North America and Europe are expected to see their shares fall, the report noted.