4 Trends Revitalizing the Breakfast Cereal Market

holding a bowl of granola

Consumer preferences are steering cereal trends into the snack and health food categories, among others

KerryDigest Fast Facts:
  • Cereal remains a household staple, despite indications that the breakfast cereal market is shrinking.
  • Brands that want to retain or grow sales must cater to new consumer expectations and cereal trends.
  • Demands within the cereal category include offerings designed for on-the-go and health conscious consumers.

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When analyzing the state of the breakfast cereal market, the proverbial bowl is half full. Cereal sales are in decline, with retail volume sales of breakfast cereals in the U.S. expected to fall by 6% between 2017 and 2022, according to a recent report from Mintel. Still, cereal remains a household staple. Nearly nine out of 10 adults report eating cereal at least once a year, per Mintel, which demonstrates the category still resonates with consumers.

As consumers look for healthier, more convenient breakfast options, cereal brands are under pressure to keep up. Ready-to-eat cold cereals lead in new cereal product launches, many of which feature health-inspired callouts. Such new or reformulated products can grab the attention of health-conscious and busy consumers. Here are 4 more research-backed cereal trends, plus suggestions for brands working to capture a piece of the cereal market.

Cereal Trend #1: Reducing sugar
Around 40% of cereal eaters in the U.S. agree that most cereals have too much sugar, according to Mintel’s 2018 “Fixing the Cereal Category” report. A similar percentage of consumers actively seek out low-sugar options, signaling opportunities in the market.

quote about cerealbowl of cereal

But this also leaves a new set of challenges for brands—how to add sweetness and good taste with less sugar. Kerry’s recent study, “Sensibly Sweet,” found that consumers have clear likes and dislikes amongst sweetening agents. Cereals that get sweetness from "consumer approved" ingredients such as honey, dried fruit or coconut sugar present the consumer-preferred balance between sweet and healthy.

Our research shows there are many palatable ways to reduce sugar in cereal. For example, another option is to use a blend of sugar and sweetening agents or taste modulators, which can maintain consumer taste expectations and product functionality while reducing sugar. One consideration when reducing sugar is a product’s target consumer group. Our research shows that Gen Xers are the least likely to prefer sugar-free products while older Millennials actively seek them out.

Cereal Trend #2: Building in convenience and snackability
One in five younger adults already eat breakfast in transit, and 40% of U.S. cereal eaters agree that cereal should be more portable. This means the time is right for brands to create and promote packaging that is more portable. This could be through small changes, such as package size, or through bigger initiatives, such as the formulation of cereal clusters big enough to be eaten out of hand.

This is an important opportunity for brands to position cereals as also suitable for snacking. Although cereal is a generally regarded as a breakfast item, nearly half of consumers reach for cereal as snack, according to Mintel. This is especially true for younger consumers, who eat cereal as a snack—at home and away—and also for dinner.

kerrydigest-cereal-quotes2food scientist measuring ingredients

Cereal trend #3: Increasing feelings of energy and satiety
Many consumers hold firm on to the belief that breakfast is the most important meal of the day, due in part to the perception that a morning meal supplies all-day energy. In a recent Mintel study, 82% of breakfast food buyers agreed that their breakfast selections should keep them energized and 56% wished cereals provided a greater sense of alertness and energy. This was especially true of consumers who enjoyed cereal as a snack: 62% looked for snacks that provided energy while 68% wanted snacks that were filling.

In order to meet these consumer desires, cereals could be formulated to be more energizing and filling, especially products that are to be positioned as a snack. Adding protein is one way to meet the desire for longer satiety and make a brand’s product stand out.

“Research is showing protein distribution throughout the day is important for health, but most people don’t get enough protein in the morning,” says Nathan Pratt, PhD, RD, Nutrition Scientist at Kerry. “Protein-fortified cereal is one solution to this.”

Other ways to make cereals more energizing and filling are through the inclusion of whole grains or added fiber.

“Only 8% of adults meet their recommended whole grain intake in the US, despite over 80% of people thinking whole grains are healthy,” says Pratt.

Many companies have been adding protein, fiber and whole grains to breakfast cereals for years, but balancing these additions with the other trends listed here is essential. Brands must deliver health benefits in a way that doesn’t make people feel like they’re giving up something, such as taste.

Cereal trend #4: Harkening to feelings of nostalgia
Nostalgia can play a key role in the marketing of cereals. Mintel found that 51% of consumers aged 18 to 24 agreed that “eating my favorite brands reminds me of childhood.” For many, this is reason enough to consume a cereal. Playing into the sense of nostalgia surrounding cereals can hook Gen Z and Millennial consumers, many of whom developed a sense of brand loyalty in childhood.

While most cereal brands are shying away from the high-sugar, brightly-colored cereals of yesterday, a recent look at the breakfast cereal market shows that nostalgic flavors can succeed as a limited time offer (LTO), especially when marketed to the consumer group that enjoyed them in childhood. Because of these fond memories, LTO cereals are viewed as a permissible indulgence in the wake of the wellness movement.

The cereal market is changing, but opportunities abound for brands that position their products to appeal to consumers. For more insights around key growth opportunities including current breakfast cereal market trends and flavor innovations, contact Kerry.

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