Breakfast Cereals - US

Published by: Mintel International Group Ltd.

Published: Aug. 1, 2007 - 109 Pages

Table of Contents

SCOPE AND THEMES

What you need to know

Definition

Resources used for consumer sections

Abbreviations and terms

Abbreviations

Terms

EXECUTIVE SUMMARY

A $10.5 billion market, moving very slowly

More than 1,300 new cereal products launched worldwide in 2006

Cereal market is driven by competition at home and away from home

Kids and teens bring challenges to the market

On-the-go breakfast options still a threat; snacking provides opportunity

Dining out challenges

Major battlegrounds: price and nutritional value

Market segmentation by sugar content yields insights

Kellogg’s leads market with a 30% share

Advertising to kids is a hot-button issue

Two thirds of sales are through supermarkets

87% of respondents to Mintel’s survey eat cereal

Taste rules for adults; nutrition for kids

Keeping the focus on breakfast

Is it possible to fight the competition from dining out?

Price matters

But nutrition matters, too

MARKET DRIVERS

The importance of breakfast… and of breakfast styles

Figure 1: Weekday and weekend breakfast eating styles, September 2006

Dining out competition

Figure 2: Dining out breakfast usage, July 2007

Figure 3: Sales of limited service breakfast, full service breakfast, and breakfast cereal, 2001-06

Where’s the cereal on the menu?

Competition from other breakfast foods

Figure 4: Types of breakfast food eaten, and eaten most often, in past three months, July 2007

Figure 5: Quaker Oatmeal Crunch cereal ad, “Hot or Cold,” 2007

Portability and convenience

Figure 6: Sales of cereal bars, yogurt drinks, and breakfast cereal, 2002-06

Children and teens

Figure 7: Children, teen, and adult population, 2002-12

Two battlegrounds: price and nutritional value

Figure 8: Rating cereal attributes as “important or very important”, July 2007

Figure 9: Price per pound of select cold cereals (through FDM channels), full year 2006

Figure 10: Top cold cereal manufacturers, by sales and price per pound (through FDM channels), full year 2006.22

MARKET SIZE AND TRENDS

MARKET SIZE

Figure 11: Total U.S. retail sales of hot and cold breakfast cereal, at current and constant prices, 2002-07

MARKET TRENDS

Figure 12: Global new product introductions of hot and cold cereals, 2002-07

Figure 13: Top claims for global launches of hot and cold breakfast cereal,

at current and constant prices, 2002-07

Figure 14: Top claims for U.S. launches of hot and cold breakfast cereal, at current and constant prices, 2002-0727

“In with the good”

“Out with the bad”

Functional cereal

Natural, organic, ethical, kosher, and Halal products

Kids’ cereal

Packaging trends

MARKET SEGMENTATION

Figure 15: FDM sales of breakfast cereal, by type and sugar content, 2005 and 2007

Low-sugar cold cereal

Figure 16: Sales of low-sugar cold cereal, at current and constant prices, 2002-07

Medium-sugar cold breakfast cereal

Figure 17: Sales of medium-sugar cold breakfast cereal, at current and constant prices, 2002-07

Medium-high sugar cold breakfast cereal

Figure 18: Sales of medium high sugar cold breakfast cereal, at current and constant prices, 2002-07

High-sugar cold breakfast cereal

Figure 19: Sales of high sugar cold breakfast cereal, at current and constant prices, 2002-07

Hot breakfast cereal

Figure 20: Sales of hot breakfast cereal, at current and constant prices, 2002-07

SUPPLY STRUCTURE

Figure 21: Manufacturer sales of hot and cold cereal in the U.S., 2004 and 2006

Low-sugar cold cereal

Figure 22: Manufacturer brand sales of low-sugar cold cereal in the U.S., 2004 and 2006

Medium-sugar cold cereal

Figure 23: Manufacturer brand sales of medium-sugar cold cereal in the U.S., 2004 and 2006

Medium-high sugar cold cereal

Figure 24: Manufacturer brand sales of medium-high sugar cold cereal in the U.S., 2004 and 2006

High-sugar cold cereal

Figure 25: Manufacturer brand sales of high-sugar cold cereal in the U.S., 2004 and 2006

Hot cereal

Figure 26: Manufacturer brand sales of hot cereal in the U.S., 2004 and 2006

ADVERTISING AND PROMOTION

Advertising to children under scrutiny

Advertising aimed at children

Figure 27: General Mills Reese’s Puffs Cereal Ad, “Fantasy Building,” 2007

Figure 28: Kellogg’s Frosted Flakes ad, “Teamwork,” 2007

Figure 29: Kellogg’s Froot Loops Cereal ad, “Toucan Sam,” 2007

Figure 30: Kellogg’s Mini Swirlz Peanut Butter Blast ad, “Scientists,” 2007

Figure 31: Kellogg’s Eggo Cinnamon Toast Cereal ad, “Eggo Cinnamon,” 2007

Figure 32: Quaker Cap’n Crunch Cereal ad, “Cap’n Crunch,” 2007

Figure 33: Post Honeycomb cereal ad, “Which would you rather drop on your sister?,” 2007

Advertising aimed at parents

Figure 34: Quaker Life cereal ad, “I only have eyes for you,” 2007

Figure 35: Kellogg’s Mini Wheats ad, “Hey, Good Looking,” 2007

Figure 36: Kellogg’s Organic Cereal ad, “Nostalgia,” 2007

Figure 37: Kellogg’s Rice Krispies cereal ad, “Mother’s Day,” 2007

Advertising aimed at adults

Figure 38: Kashi Go Lean ad, “Seven Whole Grains on a Mission,” 2007

Figure 39: General Mills Cheerios ad, “Lowering Cholesterol,” 2007

Figure 40: General Mills Honey Nut Cheerios ad, “Wedding,” 2007

Figure 41: Post Honey Bunches of Oats ad, “Train Station,” 2007

Figure 42: Quaker oatmeal ad, “Friends,” 2007

Figure 43: General Mills Oatmeal Crisp cereal ad, “Surprise!,” 2007

Figure 44: Kellogg’s Smart Start cereal ad, “What’s Your Cereal’s IQ?”, 2007

Figure 45: Kellogg’s All Bran cereal ad, “Fiber,” 2007

Figure 46: Kellogg’s Special K cereal ad, “The Difference is K,” 2007

Figure 47: Post Shredded Wheat cereal ad, “I’m Hungry!,” 2007

Figure 48: Quaker Life Chocolate Oat Crunch cereal ad, “Chocolate on the move,” 2007

RETAIL DISTRIBUTION

Figure 49: U.S. retail sales of hot and cold breakfast cereal, by channel, 2005 and 2007

Supermarkets

Figure 50: U.S. supermarket sales of hot and cold breakfast cereal, at current and constant prices, 2002-07

Figure 51: Nature Valley cereal ad, “Try some!,” 2007

Mass merchandisers and others

Figure 52: U.S. “mass merchandiser and other” sales of hot and cold breakfast cereal, at current and constant

prices, 2002-07

THE CONSUMER: USAGE, BRAND PREFERENCES, AND PURCHASE VENUES

Summary

Personal usage of breakfast cereal

Figure 53: Usage of cold breakfast cereal in last three months, by key demographics, June 2007

Figure 54: Usage of hot breakfast cereal in last three months, by key demographics, June 2007

Amount of cold and hot cereal eaten per household per week

Figure 55: Amount of breakfast cereal eaten per week, January-October 2006

Preferred brands of breakfast cereals

Figure 56: Breakfast cereals eaten, January-October 2006

Teens and kids: usage and average amount used

Figure 57: Usage of breakfast cereal and amount eaten per month, kids and teens, January-October 2006

Teens’ and children’s breakfast cereal preferences

Figure 58: Cold breakfast cereals eaten by teenagers, January-October 2006

Figure 59: Hot breakfast cereals eaten by teenagers, January-October 2006

Figure 60: Cold breakfast cereals preferred by children, January-October 2006

Figure 61: Hot breakfast cereals preferred by children, January-October 2006

Purchase venues for cereal

Figure 62: Purchase venues for breakfast cereal, by age, July 2007

Figure 63: Purchase venues for breakfast cereal, by income, July 2007

THE CONSUMER: ATTITUDES AND COMPETITIVE CONTEXT

Summary

Factors to purchasing cereal for one’s self

Figure 64: Rating cereal attributes as “important or very important”, by age, July 2007

Factors to purchasing cereal for one’s children

Figure 65: Rating cereal attributes for cereal purchased for children as “important or very important”, July 2007

Figure 66: Rating cereal attributes for cereal purchased for children as “important or very important”, by age, July

2007

Attitudes and opinions about breakfast cereal

Figure 67: Attitudes and opinions about breakfast cereal, July 2007

Figure 68: Ways of eating cereal, by age, July 2007

Figure 69: Ways of eating cereal, by HH income, July 2007

Figure 70: Attitudes toward cereal value and quality, by race/ethnicity, July 2007

Figure 71: Attitudes toward cereal convenience, by gender, July 2007

Figure 72: Attitudes toward cereal convenience, by age, July 2007

Cereal compared against other breakfast food choices

Figure 73: Breakfast choices, by age, July 2007

Figure 74: Breakfast choices, by race/Hispanic origin, July 2007

Preferred breakfast foods

Figure 75: Breakfast preferences, by age, July 2007

Breakfast away from home

Figure 76: Breakfast away from home, July 2007

Figure 77: Breakfast away from home, by age, July 2007

Figure 78: Breakfast away from home, by race/Hispanic origin, July 2007

FUTURE AND FORECAST

FUTURE TRENDS

Keeping the focus on breakfast

Is it possible to fight the competition from dining out?

Price matters—at the risk of brand loyalty

But nutrition matters, too

MARKET FORECAST

Hot and cold breakfast cereal

Figure 79: Forecast of total U.S. sales of hot and cold breakfast cereal, at current and constant prices, 2007-12

Low sugar cold breakfast cereal

Figure 80: Forecast of U.S. FDM sales of low-sugar cold breakfast cereal, at current and constant prices, 2007-1290

Medium sugar cold breakfast cereal

Figure 81: Forecast of U.S. FDM sales of medium-sugar cold breakfast cereal, at current and constant prices,

2007-12

Medium-high sugar cold breakfast cereal

Figure 82: Forecast of U.S. FDM sales of medium-high sugar cold breakfast cereal, at current and constant prices,

2007-12

High sugar cold breakfast cereal

Figure 83: Forecast of U.S. FDM sales of high sugar cold breakfast cereal, at current and constant prices, 2007-1292

Hot breakfast cereal

Figure 84: Forecast of U.S. FDM sales of hot breakfast cereal, at current and constant prices, 2007-12

Forecast factors

APPENDIX: TRADE ASSOCIATIONS

Abstract

• Cereal manufacturers are in a difficult position in growing a “commodity-based” industry, with almost complete household penetration and a strong position as a breakfast-only product.
• Only 52% of respondents cited cereal as their top breakfast choice, leaving the breakfast field wide open.
• Away-from-home breakfasts through quick-service restaurants and coffee shops, and even through sit-down white-tablecloth establishments, are making it difficult for cereal to stand out and gain share.
• Price and nutritional value are top issues in this segment. Self-imposed reformulation of kids’ cereals and advertising have started to change the playing field, but cereals with less sugar or sugar substitutes have met with only mixed acceptance.
• Pullbacks on advertising to kids are challenged by the fact that kids are precocious television viewers who watch programming (and advertising) beyond the Saturday morning “no ad zone.”
• Cereal is therefore faced with a number of challenges beyond the fact that many consumers are simply “bored” with the segment.

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