Breakfast Cereal - US

Published by: Mintel International Group Ltd.

Published: Sep. 1, 2009 - 128 Pages

Table of Contents

SCOPE AND THEMES

What you need to know

Definition

Data sources and methodology

Sales data

Consumer survey data

Advertising clips

Abbreviations

Terms

EXECUTIVE SUMMARY

Well-established market leaves little room for growth

Competition for the food dollar

Market drivers mostly positive

Cold cereal controls market

Supermarkets command majority of sales

Kellogg and General Mills battle for top spot

Brand focus: Kellogg’s Special K—the diet-friendly cereal

Innovation driven by attitudes toward health, convenience and flavor

Advertising and promotion of cereals

The breakfast cereal consumer

Frequency of usage

Cereal for breakfast, lunch, dinner, and snacks

Most important attributes: Taste, price, whole grains, familiar flavor, fiber, and sugar

Reasons for eating cereal: Convenience, health, and value

Attitudes toward price

Attitudes towards trial and brand

Kids’ and teens’ use of cereal

Custom consumer groups: Moms and dads

MARKET SIZE AND FORECAST

Growth difficult in saturated market

Increasing usage per eater

Raising prices

Sales and forecast of market

Figure 1: Total U.S. breakfast cereal sales and forecast, at current prices, 2004-14

Figure 2: Total U.S. breakfast cereal sales and forecast, at inflation-adjusted prices, 2004-14

COMPETITIVE CONTEXT

Myriad choices available

Figure 3: Types of breakfast foods eaten, February 2008-March 2009

Convenience of cereal bars

Nutritional content of yogurt

The special treat

Price sensitivity creates internal competition

Figure 4: Breakfast cereal purchase behavior, June 2009

The foodservice battle for breakfast

SEGMENT PERFORMANCE

Overview

Cold cereal dominates and provides growth

Figure 5: FDMx sales of breakfast cereal, by type and sugar content, 2007 and 2009

Figure 6: FDMx sales of breakfast cereal, segmented by type, 2004-09

Figure 7: Total U.S. sales and forecast of breakfast cereal at current prices, by segment, 2004-14

SEGMENT PERFORMANCE—COLD CEREAL

Key points

Medium-high sugar cereals successful by striking a balance for consumers

Ramping up health perceptions

Sales and forecast of cold cereal

Figure 8: Total U.S. sales and forecast of cold cereal, 2004-14

Cold cereal sales by sugar content

Low sugar cold cereal

Figure 9: FDMx sales and forecast of low sugar cold cereal, 2004-14

Medium sugar cold cereal

Figure 10: FDMx sales and forecast of medium sugar cold cereal, 2004-14

Medium-high sugar cold cereal

Figure 11: FDMx sales and forecast of medium-high sugar cold cereal, 2004-14

High sugar cold cereal

Figure 12: FDMx sales and forecast of high sugar cold cereal, 2004-14

SEGMENT PERFORMANCE—HOT CEREAL

Key points

Trade down trend hurting segment performance

Competition squeezing out hot cereals

Sales and forecast of hot cereal

Figure 13: Total U.S. sales and forecast of hot cereal, 2004-14

RETAIL CHANNELS

Key points

Cereal is a supermarket staple

Mass merchandiser/other growth rates very strong

Sales of market, by channel

Figure 14: Total U.S. sales of breakfast cereal, by retail channel, 2007 and 2009

RETAIL CHANNELS—SUPERMARKET/FOOD STORES

Key points

Supermarkets faced with challenges—implementing changes

Supermarkets aggressive in promoting private label programs

Figure 15: Total U.S. sales of breakfast cereal at supermarkets/food stores, 2004-09

RETAIL CHANNELS—MASS MERCHANDISER, DRUG AND OTHER

Key points

Target hits the bull’s eye with tiered private label brands

Figure 16: Total U.S. sales of breakfast cereal at mass and other, 2004-09

NATURAL CHANNEL SALES

Figure 17: Natural product supermarket retail sales of breakfast cereal, at current prices, 2007-09

Figure 18: Natural product supermarket retail sales of breakfast cereal, at inflation adjusted prices, three years ending July 11, 2009

Implications

Natural channel sales by segment

Figure 19: Natural product supermarket retail sales of breakfast cereal, by segment, 2007-09

Brand sales

Nature’s Path and Weetabix’s Barbara’s surge

Figure 20: Manufacturer brand natural supermarket sales of breakfast cereal, 2007 and 2009

Natural channel sales of organic cereal

Figure 21: Natural product supermarket retail sales of breakfast cereal, by organic/non-organic, 2007-09

Natural channel sales of gluten-free breakfast cereal

Figure 22: Natural product supermarket retail sales of breakfast cereals, by gluten-free, 2007-09

MARKET DRIVERS

Higher prices

Recession is good for cereal sales

Perception of health benefits drives routine usage among adults

Figure 23: Routine use of cereal for breakfast, July 2009

Figure 24: Reasons to eat cereal, routine users vs. non-routine users, July 2009

Not skipping breakfast—“the most important meal of the day”

Figure 25: Kellogg’s Frosted Mini Wheats, More than just coffee, June 2009

Population growth insufficient to drive meaningful gains

Figure 26: Population by age, focus on kids, 2009-14

Long commutes and traffic delays

Figure 27: Average commuting times in select major U.S. cities, October 2006

Making the commute earlier—impacting breakfast plans

One in seven too busy for cereal

Figure 28: Factors impacting breakfast habits, by gender, June 2009

Figure 29: Factors impacting breakfast habits, by age, June 2009

Figure 30: Factors impacting breakfast habits, by presence of children, June 2009

LEADING COMPANIES

Brand leaders raise prices, decrease package sizes

Private label sales flourish

Company sales

Figure 31: FDMx sales of leading breakfast cereal companies, 2008 and 2009

SELECTED BRAND ANALYSIS—LOW SUGAR COLD CEREAL

Key points

Cheerios and Rice Krispies—classic kid brands dominate sales

General Mills’ Fiber One gains while other fiber-rich cereals plummet

Manufacturer and brand sales of low sugar cold cereal

Figure 32: Selected FDMx brand sales of low sugar cold cereal in the U.S., 2008 and 2009

SELECTED BRAND ANALYSIS—MEDIUM SUGAR COLD CEREAL

Key points

Kellogg’s Special K dominates via adult focus and flavor diversity

Figure 33: FDMx brand sales of medium sugar cold cereal in the U.S., 2008 and 2009

SELECTED BRAND ANALYSIS—MEDIUM-HIGH SUGAR COLD CEREAL

Key points

General Mills’ MultiGrain Cheerios “healthy enough”

Post Just Bunches brand off to a good start

Manufacturer and brand sales of medium-high sugar cold cereal

Figure 34: FDMx brand sales of medium-high sugar cold cereal in the U.S., 2008 and 2009

SELECTED BRAND ANALYSIS—HIGH SUGAR COLD CEREAL

Key points

Kellogg’s gives kid-centric brands a healthier makeover

General Mills focused on fun

Manufacturer and brand sales of high sugar cold cereal

Figure 35: FDMx brand sales of high sugar cold cereal in the U.S., 2008 and 2009

SELECTED BRAND ANALYSIS—HOT CEREAL

Key points

Private label hot cereal stealing market share

Manufacturer and brand sales of hot cereal

Figure 36: FDMx brand sales of hot cereal in the U.S., 2008 and 2009

BRAND QUALITIES CASE STUDY: KELLOGG’S SPECIAL K

Alignment as a diet-friendly cereal

Figure 37: FDMx brand sales of leading diet cereals in the U.S., 2008 and 2009

Connecting with women

Figure 38: Special K Challenge, Bikini vs. You, May 2009

Extending the brand

INNOVATION AND INNOVATORS

Health and wellness

Convenience

Flavor and fun

Focused on fun

Leading new product claims

Figure 39: Top 10 cereal product launches by product claim and year, 2004-09

ADVERTISING AND PROMOTION

Recession fuels need for more advertising to stave off private label

Ad spend remains flat

Figure 40: Top cereal advertisers, 2007 and 2008

The traditional route: Targeting kids with cartoon fun

Figure 41: General Mills Cereals, Measuring Up, August 2008

Figure 42: General Mills Lucky Charms, Mini Lucky Charms, June 2009

Bridging the gap: One brand targeting both kids and adults

Figure 43: General Mills Honey Nut Cheerios, Bee Happy Bee Healthy, February 2009

Figure 44: General Mills Honey Nut Cheerios, Buzz Saves the Day, May 2009

CONSUMPTION

Key points

Household usage

Cold cereal

Hot cereal—household usage

Figure 45: Household use of cereal, hot and cold, by age and presence of children, February 2008-March 2009

Frequency of use per week

Figure 46: Weekly portions of cereal eaten, by age, race/Hispanic origin, and presence of children, February 2008-March 2009

BRAND USAGE

Brand usage

Figure 47: Leading brands of cold cereal used, February 2008-March 2009

Figure 48: Leading brands of cold cereal used, by household size, February 2008-March 2009

Hot cereal

Figure 49: Leading brands of hot cereal used, February 2008-March 2009

BREAKFAST, LUNCH, DINNER AND SNACKS

Key points

How cereal is used

Figure 50: How cereal is used, by gender, June 2009

Figure 51: How cereal is used, by age, June 2009

Figure 52: How cereal is used, by presence of children, June 2009

MOST IMPORTANT ATTRIBUTES OF CEREAL

Key points

Cereal attributes that influence purchase

Figure 53: Important attributes of cereal, by age, June 2009

Figure 54: Important attributes of cereal, by household income, June 2009

REASONS WHY CEREAL IS EATEN

Key points

Reasons for eating cereal

Figure 55: Reasons for eating cereal, by age, June 2009

Figure 56: Reasons for eating cereal, by household income, June 2009

Figure 57: Reasons for eating cereal, by presence of children, June 2009

Figure 58: Reasons for eating cereal, by gender, June 2009

PURCHASING BEHAVIOR

Key points

Sampling, couponing, and trading down

Figure 59: Cereal purchasing and eating behaviors, by gender, June 2009

Figure 60: Purchasing and eating behaviors, by age, June 2009

Figure 61: Purchasing and eating behaviors, by household income, June 2009

Figure 62: Purchasing and eating behaviors, by presence of children, June 2009

ATTITUDES TOWARDS CEREAL

Key points

Women, younger, and higher-income demos keen on variety

Figure 63: Attitudes towards cereal, by age, June 2009

Figure 64: Attitudes towards cereal, by household income, June 2009

Figure 65: Attitudes towards cereal, by presence of children, June 2009

Figure 66: Attitudes towards cereal, by gender, June 2009

INTEREST IN ARTIFICIAL SWEETENER

Older, wealthier consumers seeking artificial sweeteners

Figure 67: Interest in artificial sweetener, by age, June 2009

Figure 68: Interest in artificial sweetener, by household income, June 2009

Figure 69: Interest in artificial sweetener, by presence of children, June 2009

IMPACT OF RACE/HISPANIC ORIGIN

Key points

Household usage

Cold cereal

Hot cereal

Figure 70: Household use of cereal, hot and cold, by race/Hispanic origin, February 2008-March 2009

Reasons for eating cereal

Figure 71: Reasons for eating cereal, by race/Hispanic origin, June 2009

Purchasing and eating behaviors

Figure 72: Purchasing and eating behaviors, by race/Hispanic origin, June 2009

KIDS’ AND TEENS’ USE OF BREAKFAST CEREAL

Key points

Near-universal penetration among children for cold cereal

Figure 73: Incidence of kids’ consumption of cereal, by gender and age, October 2007-December 2008

Availability of favorite brands in home

Figure 74: Prevalence of child’s favorite cereal in home, October 2007-December 2008

Penetration declines as kids become tweens and teens

Figure 75: Incidence of teens’ consumption of cereal, by gender and age, October 2007-December 2008

Getting to decide on brands

Figure 76: Incidence of teens’ ability to decide which brands of cereal to buy, October 2007-December 2008

APPENDIX: OTHER USEFUL CONSUMER TABLES

Figure 77: Factors impacting breakfast habits, by household income, June 2009

Important attributes of cereal

Figure 78: Important attributes of cereal, by gender, June 2009

Figure 79: Important attributes of cereal, by presence of children, June 2009

Figure 80: Important attributes of cereal, by race/Hispanic origin, June 2009

Figure 81: Attitudes towards cereal, by race/Hispanic origin, June 2009

Important attributes when buying cereal for kids

Figure 82: Important attributes when buying cereal for kids, by race/Hispanic origin, January 2009

APPENDIX: PENETRATION OF CEREAL BY MOSAIC CLASSIFICATION

Cold cereal

Figure 83: Incidence of household consumption of cold cereal, by mosaic, February 2008-March 2009

Hot cereal

Figure 84: Incidence of household consumption of hot cereal, by mosaic, February 2008-March 2009

Mosaic definitions

APPENDIX: PERSONAL CONSUMPTION AMONG ONLINE RESPONDENTS

Figure 85: Personal usage and purchase of breakfast cereal, by age and presence of children, June 2009

APPENDIX: NEW QSR BREAKFAST OFFERINGS

APPENDIX: TRADE ASSOCIATIONS

Abstract

What's in your bowl?

Breaking away from breakfast is a longstanding objective for the industry, and remains perhaps the most vibrant means of increasing usage. While cereal for dinner is an occasional habit for many Americans, cereal manufacturers can do more to promote cereal consumption throughout the day.

Kellogg’s Special K Challenge has made moves to expand its application beyond the morning meal, suggesting that participants use the cereal for two meals each day and supplement with other Special K products for snack needs.

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