Oatmeal makers eye expansion

by Monica Watrous and Eric Schroeder
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Quaker Overnight Oats oatmeal
Quaker Overnight Oats generated sales of $11.6 million in 2017.
 

LUXEMBOURG — When it comes to oatmeal, consumers are looking for a hot cereal that is more than just hot. Organic, high fiber, lower sugar and weight control are just some of the attributes that are being attached to products meant to warm consumers’ bellies during the winter months.

In the 52 weeks ended Dec. 31, 2017, dollar sales in the hot cereal/oatmeal category totaled $1,302,471,040, up 0.42% from the same period a year ago, while unit sales increased 1.7% to 490,017,408, according to Information Resources, Inc., a Chicago-based market research firm.

Quaker Oats Co., a division of Purchase, N.Y.-based PepsiCo, Inc., continued to flex its muscle in the category. Quaker accounts for nearly 61% of the hot cereal/oatmeal category, and in the 52 weeks ended Dec. 31 experienced a 1.6% uptick in dollar sales, to $788.6 million.

Quaker High FIber and Weight Control oatmeal
Quaker Weight Control oatmeal sustained a 26% decline in dollar sales during 2017, and Quaker High Fiber oatmeal fell 20%.
 

Quaker’s base oatmeal business turned in a solid performance during the year, with dollar sales up 2.6% to $635 million, but perhaps more encouraging for the company was the success of Overnight Oats. Targeted at millennial moms, Overnight Oats are single-serve cups that contain a blend of oats, quinoa and flaxseed that may be soaked in milk or yogurt. Varieties include Blueberry Banana & Vanilla Bliss, Toasted Coconut & Almond Crunch, Orchard Peach Pecan Perfection and Raisin Walnut & Honey Heaven. In the 52 weeks ended Dec. 31, Overnight Oats generated sales of $11.6 million.

The success of Overnight Oats helped offset declines in other hot cereal products for Quaker, including Quaker Weight Control oatmeal, which sustained a 26% decline in dollar sales during 2017, and Quaker High Fiber oatmeal, which fell 20%.

Elsewhere in the hot cereal/oatmeal category, Bob’s Red Mill Natural Foods, Milwaukie, Ore., had a solid 2017, with dollar sales up 13% to nearly $39.5 million. In October, the company expanded its line of oatmeal cups to include organic options. The new U.S.D.A. certified organic oatmeal cups are made with gluten-free ingredients, including whole grain rolled oats and stone-ground Scottish-style oats, and contain seven grams of protein or more per serving.

Bob's Red Mill organic oatmeal cups
Bob's Red Mill launches U.S.D.A. certified organic oatmeal cups in October 2017.
 

“More and more health-conscious folks are looking to add foods with wholesome ingredients to their diets so they can feel good about what they’re eating,” said Bob Moore, founder, president and chief executive officer of Bob’s Red Mill. “They asked, and we listened. Our new organic oatmeal cups make it easy for all people to enjoy our tasty whole grain oatmeal on the go, regardless of special dietary needs.”

Bob’s Red Mill’s organic oatmeal cups retail for $2.79 per cup and are available in four varieties.

Post Holdings, Inc., St. Louis, recorded a 1.4% increase in dollar sales in the 52 weeks ended Dec. 31, led by a 21% increase in Better Oats Raw Pure and Simple oatmeal. The gain helped offset some weakness in the company’s Better Oats Oat Fit (down 11%), Better Oats Oat Revolution (down 5%) and Malt O Meal (down 3.3%) brands.

Post Better Oats Raw Pure & Simple Organic oatmeal
Post Holdings recorded a 1.4% increase in dollar sales in 2017, led by a 21% increase in Better Oats Raw Pure and Simple oatmeal.
 

An interesting oatmeal story is taking place beyond the major manufacturers as well.

The founders of The GFB: The Gluten Free Bar launched their company in what they consider “the stone age of gluten-free foods.” The year was 2010, still many months before gluten-free would emerge as what many believed was a diet fad, then explode into a nearly $2 billion market in the United States. Now, the Grand Rapids, Mich.-based business is seizing opportunities to remain relevant in a category that has “gotten a lot more competitive,” said Elliott Rader, who co-founded The GFB with his brother, Marshall. (Both, incidentally, suffer from gluten intolerance.)

The latest endeavor from a brand built on the burgeoning bar segment expands The GFB into a new frontier: oatmeal.

The GFB oatmeal
The GFB recently expanded into oatmeal with its new Power Breakfast line.
 

“We like to say it’s like oatmeal but better,” Mr. Rader told Milling & Baking News. “It’s a high-protein product with no added sugar, with a healthy mix of additional things in oatmeal, like nuts, fruit and seeds. The best part and most innovative part of the product is the packaging.”

A single serving is packaged in a portable cardboard pouch that may be folded into a microwave-friendly bowl. 

“It’s super convenient, super innovative packaging, along with a great-tasting product for that on-the go oatmeal space,” Mr. Rader said of The GFB Power Breakfast line, one of hundreds of new specialty food products on display at the Winter Fancy Food Show, held Jan. 21-23 in San Francisco.

Varieties include Coconut Cashew; Fruit, Nuts and Seeds; PB+J; Maple Raisin and Apple Cinnamon. The company also offers six varieties of nutrition bars and six varieties of snack bites, each made with ingredients like fruit, nuts, seeds and brown rice and pea protein. Products are manufactured in the company’s dedicated gluten-free facility and sold in more than 9,000 retail locations in the United States and Canada.

The GFB oatmeal
The GFB Power Breakfast oatmeal varieties include Coconut Cashew; Fruit, Nuts and Seeds; PB+J; Maple Raisin and Apple Cinnamon.
 

“This is a category we feel we have to continue to innovate in, so trying to stay ahead of the marketplace means we’re probably not going to be too successful just relying on bars,” Mr. Rader said. “We know that looking at trends and the way people want to snack more often throughout the day, that led us into the development of bites. And now knowing that people trend away from cereal, but more toward on-the-go packaging, healthy breakfasts — that was another trend we had to capitalize on.”

Last year, The GFB’s revenues increased 60% over the prior year, and the company is expecting similar results this year. In addition to launching Power Breakfast, the company plans to introduce additional flavors of bars and work with existing customers to drive sales, Mr. Rader said.

“A lot of the focus has been what’s going to drive in-store sales with our current retail partners,” he said. “Additional product offerings, that is something we found that keeps our brand fresh in the minds of buyers and consumers.

“Our long-term vision is to be that leading gluten-free brand for people who look for great-tasting gluten-free food and continue to tell the story. We have a good story to tell that we haven’t been doing a very good job of … that a couple of brothers started this brand out of need, and we make everything ourselves.” 

 

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