Even though the overall cereal market is expected to grow with a CAGR of 4.1% from 2018-2024, traditional cereal sales are not what they use to be.1 Due to the growing popularity of on the go breakfasts, along with increasing demand for health oriented products, cereal companies are creating new and exciting products to help reverse the decline in traditional cereal. While sit down breakfasts use to be popular, and may still be with an older generation, Millennials want convenient, healthy and novel flavor options. 2 Billionaire trendsetter Kylie Jenner just tried cereal with milk for the first time on September 17, 2018. Is this enough to reignite the love for cereal in Millennials?
Why the Downward Trend?
There are several major reasons responsible for the decline in cereal sales.
- Sugar – Cereal is notoriously high in sugar and today’s health conscious consumer doesn’t want to eat their daily allotment at breakfast.
- Competition – Products outside the category like snack bars, Greek yogurt, and high protein offerings such as breakfast sandwiches are turning the consumer’s head.
- On-the-go Alternatives – McDonald’s has made breakfast an all-day affair and Taco Bell has added it to their menu making it quite easy for consumers to grab and go their first meal of the day outside the home.
- Bars –There is pretty much a bar for every consumer diet. High protein, low sugar, Paleo, Keto— if a consumer is following a meal plan, there’s a bar for it. Cereal brands that also make cereal bars are doing quite well like Kellogg’s Nutri Grain that pulled a cool $112 million in 2017. The overall market for nutritional and cereal/granola bars is estimated at $8 billion in 2019.
The Time to Adapt is Now
With Millennials and their children being the number 1 target market, cereal companies are having to adapt to the preferences of consumers. Despite the sugar association concerns, dessert flavors are tempting to some consumers.
- Kashi has introduced a line of superfood cereals targeting kids. In flavors like Honey and Cinnamon (with shapes that look like mini cinnamon buns), Cocoa Crisps and Berry Crumble, these cereals feature chickpeas, purple corn and red lentils.
- Graham cracker brand Honey Maid launched a S’mores Cereal, and Kellogg’s is expected to release a Magic Cupcake Unicorn flavor. Post hit a nostalgic note with a Nilla Wafers Banana Pudding cereal, and is also pairing with Cold Stone Creamery to blend cereal with ice cream in flavors like honey, strawberry, and marshmallow. A birthday cake flavored cereal with chocolate marshmallows is also in the mix.
- Other companies are focusing on traditional morning pick me up flavors such as chocolate and coffee. General Mills added a Mocha Crunch Cereal as a limited edition launch with mocha flavored corn cereal, which was inspired by whipped cream topped mocha drinks.3
- Overnight Oats made an appearance in 2017 thanks to Millennial and Pinterest moms’ creativity. However, the big cereal companies have made sure it’s here to stay. Overnight oats are hassle free, with only milk added to steel cut oats, along with any desired mix ins. They sit in the fridge overnight and are ready to eat in the morning, Quaker Oats Overnight Oats has made the process even easier, as it comes pre flavored, and so only milk is needed. Who doesn’t love a delicious, healthy and incredibly easy breakfast?
- Bars are right on trend, with being healthy and convenient. Kellogg’s Special K Snack Bars, General Mills’ Nature Valley Granola Bars, and Annie’s Homegrown Organic Chewy Granola Bars are all meeting those needs. These bars are not only delicious, but they are packed with protein, energy and other health benefits. It’s no wonder bars are so popular.
Finally, for something fun on your way to the office, check out a cereal podcast that launched in September 2018. The Empty Bowl Podcast, brought to you by the Cerealously crew, focuses on the happiness derived from sitting down with your favorite combo or cereal blend and just snacking away. Pour a bowl and plug in.