KANSAS CITY — It’s that time of year again. Time for hot cereal to regain a prominent place in the breakfast daypart.
In recent years hot cereal manufacturers have made it easier than ever for consumers to eat oatmeal. Nearly every company in the category now offers some version of a microwavable cup or pouch. Now, companies must find other ways to differentiate.
In the 52 weeks ended Dec. 30, 2018, dollar sales in the hot cereal/oatmeal category totaled $1,314,638,346, up 1.3% from the same period a year ago, according to data from Information Resources, Inc., a Chicago-based market research firm. Unit sales, though, were down 0.7% to 484,549,330.
Each of the top four hot cereal makers experienced an increase in dollar sales in the 52-week period, led by an 11% increase in sales at Bob’s Red Mill Natural Foods, Milwaukie, Ore.
The only drag on the category came from private label, which experienced a 2.6% decrease in dollar sales in the period, to $274,202,750, according to I.R.I. Private label unit sales also dipped, falling 4.7% in the 52 weeks ended Dec. 30.
Quaker Oats Co., the Chicago-based subsidiary of PepsiCo, Inc. and the category’s largest player, posted a 1.8% increase in sales during the period, to $798,602,893. The company offers a wide range of products in the hot cereal category, and as a result offered a mixed bag of results across individual product lines.
Dollar sales in Quaker’s base hot cereal/oatmeal business, which accounts for 50% of total dollar sales in the category, increased 4.6% in the 52-week period ended Dec. 30, according to I.R.I. Also performing well in the period was Quaker Lower Sugar, up nearly 4%; Quaker Overnight Oats, up 20%; Quaker Oats, up 12%; and Quaker Select Starts, up 6%. Quaker Real Medleys, meanwhile, sustained a 26% decline in dollar sales in the period, while Quaker High Fiber fell 6.4%.
PepsiCo executives have credited the strength within Quaker’s hot cereal business to a strong marketing campaign highlighting the functional benefits of oatmeal and innovation like Simple & Wholesome organic multigrain hot cereal. Quaker Simple & Wholesome hot cereal contains between 27 and 34 grams of whole grains per serving and is certified U.S.D.A.-organic and Non-GMO Project verified. The hot cereal is available in three varieties: date and almond, red quinoa and buckwheat and flax.
The second largest player in the hot cereal category is B&G Foods, Inc., Parsippany, N.J. B&G generated dollar sales of $73,164,315 in the 52 weeks ended Dec. 30, up 1.1% from the same period a year ago, according to I.R.I. The gain primarily was driven by the Cream of Wheat brand, which posted dollar sales growth of 1.3%, which more than offset a decline of 1.1% in the Cream of Rice brand.
B&G Foods boosted its presence in the hot cereal category last summer with the acquisition of McCann’s Irish Oatmeal from TreeHouse Foods, Inc. for approximately $32 million in cash.
“We are delighted to welcome the McCann’s brand to the B&G Foods family,” Robert C. Cantwell, president and chief executive officer of B&G Foods, said when McCann’s was acquired in July 2018. “McCann’s is an excellent complement to our existing portfolio of brands, including our Cream of Wheat hot cereal brand. This acquisition is another example, along with our acquisitions of Green Giant, Spice Islands and other spices and seasoning brands, Victoria and Back to Nature, of our efforts in recent years to acquire better-for-you brands that taste great and resonate with today’s consumer.”
Post Holdings, Inc., St. Louis, was a strong performer in the hot cereal category during 2018, posting dollar sales of $45,590,409, up 7.5% from the same period a year ago, according to I.R.I. It has been four years since Post acquired MOM Brands and its Better Oats oatmeal brand, and the brand is delivering strong gains for Post.
Better Oats Oat Revolution oatmeal posted dollar sales growth of nearly 5% in the 52 weeks ended Dec. 30, while Better Oats Raw Pure and Simple increased almost 8% in the period. Mom’s Best Naturals old fashioned oatmeal also performed well in the period, experiencing a 6% increase in dollar sales.
Earnest Eats, Solana Beach, Calif., is one of the newer players in the hot cereal category. The company offers a portable breakfast option in its Protein + Probiotic Oatmeal cups. Featuring a blend of ancient grains, including organic, whole rolled oats; puffed quinoa; and amaranth, along with grass-fed whey protein and probiotic cultures, the cups contain at least 15 grams of protein each. The oatmeal also is available in resealable 10-oz bags.