- Despite reportedly soggy cereal sales, a new survey from Shopkick shows 96% of U.S. consumers typically purchase cereal during their shopping trip. Almost half of those houses surveyed, 49%, consume less than one box of cereal a week. The data also found 41% generally purchase two boxes of cereal each shopping trip.
- Sweet varieties reign supreme, with 45% of respondents saying a sugary version of the breakfast staple most fits their "cereal personality." In fact, the survey found half of shoppers make purchase decisions based on flavor over nutritional value.
- The survey also found most people purchase their cereal at supermarkets, and more than half of those customers take one to two minutes considering their options before making a purchase.
Although the arrival of National Cereal Day may skew the results of this survey slightly, it would be hard to say that cereal could be more popular than this new survey shows. With 96% of shoppers purchasing at least one box of cereal per shopping trip, these results belie the sales trends that have been reported recently. From 2009 to 2016, cereal sales have decreased 17%, according to IBISWorld estimates referenced by the LA Times. Just last year, according to Nielsen statistics provided to Food Dive, Americans purchased $8.3 billion worth of cereal, a substantial drop from $8.8 billion in 2016.
With the reality of slipping sales hard to ignore, it is interesting to see that cereal remains such a popular option for the majority of U.S. consumers. Why?
In recent years, snacking has been on the rise. Millennials are now the largest generational demographic in the U.S., and they spend a larger percentage of their budgets on prepared foods than other age groups. This combination has led CPG companies to rethink the role of cereal. What used to be positioned as a healthy breakfast option has now morphed into the dessert and snacks category, which prioritizes taste and convenience with a dash of nostalgia. CPGs are accomplishing this shift in cereal through sweetening up their offerings.
Even in the face of a massive rejection of sugar by consumers, General Mills has launched cereals like Cinnamon Toast Crunch Churros, Fruity Lucky Charms and Chocolate Toast Crunch in recent months. Post launched Sour Patch Kids and Hostess Donettes and Honey Bun cereals last year. Kellogg, too, has launched cereals like Peeps and Caticorn, a unicorn cat cereal.
The results have been mixed. Dana McNabb, president of cereal for General Mills, told The Wall Street Journal that the company’s sweeter products are racking up higher sales than the healthier versions. Still, earnings reports from the most recent quarter show General Mills' North America Retail segment, which includes cereal, was down 3% from the prior year, reflecting lower merchandising activity in the U.S. Cereal operating unit. Post has fared better. Its Consumer Brands business — which includes the company’s ready-to-eat cereal business — reported $455.3 million in sales in its most recent quarter last month. This is a 5.4% increase from the year before.
Of course, there are a host of better-for-you options being released onto the market, especially in the kids' space. Last year, Kellogg released Kashi by Kids for a healthier breakfast option that would also please parents.
However, with the Shopkick survey showing that most consumers spend around two minutes considering what to buy, it is difficult for any one cereal to stand out. To combat this overabundance of choice, cereal manufacturers can pursue several different tactics. Studies found placing cereals on the lower or middle store shelves make them easier to spot. Similarly, it’s even been shown that the placement of a brand mascot's eyes could make a difference — those looking directly out into customers’ eyes seemed to do better than those looking elsewhere.
More integrated techniques could include limited edition offerings that tie into pop culture, like Kellogg’s Jurassic World: Fallen Kingdom" themed Frosted Flakes. A recent Mintel study found 40% of consumers consider cereal a snack rather than a breakfast food. Similarly, the Shopkick survey found that a third of consumers consider the product to be an optimal late night snack.
Other options to help grow cereal sales include online promotions that collaborate with supermarket chains to get more consumers through the doors. After all, 65% of shoppers buy cereal from a supermarket, according to the survey.
The good news out of all of this is 84% of survey respondents indicated they buy brand names rather than generic cereal. That small sliver of comfort for the cereal titans should sweeten their outlook and help them remain cautiously optimistic for the future of cereal.