Health-conscious consumers are making their preferences very clear, as they shun ready-to-eat breakfast cereals in favor of products that tout wholesome ingredients and maintain the convenience factor. Based on new or revamped product lines, companies are listening.
Breakfast product sales decreased 5% between 2009 and 2014 to $11 billion, according to Mintel. In particular, RTE breakfast cereal sales, by far the largest segment of the breakfast market, were down, with companies like Kellogg and General Mills feeling the pinch.
High-protein foods, with Greek yogurt leading the way, are a priority for people looking for a healthy, satiating breakfast. "Consumers are looking for foods that will satisfy them nutritionally until lunch," said Teresa Aprile, Chief Marketing Officer of The Chia Co., in an email.
What's been happening?
A Nielsen report found cereal sales down at a CAGR of 1.5% from 2009 to 2014. However, sub-segments of that market were up, following the trend of consumers looking for cleaner labels on what they believe to be healthier products. Gluten-free, no-GMO, and no high-fructose corn syrup cereals grew 22%, almost 67% and 22.2%, respectively.
Also, other segments of the breakfast market were growing, with time-pressed consumers buying more quick-to-prepare items. During the 2009 to 2014 period, frozen waffles, pancakes and French toast sales increased at a CAGR of 4.5%. Packaged breakfast meals, breakfast sausage, and in-store bakery goods also increased, with CAGRs of 6.4%, 5.3%, and 4.1%. Granola and yogurt bar sales saw an increased CAGR of almost 4%.
A factor that may affect the breakfast market is the questioning of the long-touted maxim that breakfast is the "most important meal of the day." For example, studies have brought into question the belief that skipping breakfast can cause weight gain. Whether, and how, this factor will affect the breakfast food market remains to be seen.
Responding to consumer shifts
Companies are responding to the consumer shift toward products with fewer and more natural ingredients. In early July, Kellogg's introduced its Origins line of breakfast products, which uses ingredients such as oats, quinoa, and berries in a range of cereals, granola, and muesli. Kellogg has also gotten into the portable breakfast market with Special K Chewy Nut Bars and Nutri-Grain Breakfast Biscuits.
General Mills has pledged to get rid of artificial ingredients in all products, already having 60% of its products not containing artificial color and flavor. However, Jim Murphy, president of the General Mills cereal division, explained that reformulating cereals to match consumer expectations could be tricky, reports Food Processing. Some cereals like Trix may look a bit different with natural colors.
Smaller companies are also stepping up to meet the demand. For example, The Chia Co. offers the grab-and-go Chia Pod with a spoon under the lid. This dairy-free breakfast or snack contains a full serving of chia seed combined with other plant-based ingredients and no artificial flavors, colors, emulsifiers or thickeners.
Succeeding in the breakfast market
To break into the breakfast market, "you have to give me something new that makes my life easier," Harry Balzer, a food industry analyst for market research firm NPD Group said in a BBC News article about the American breakfast. Ricardo Rodriguez, marketing manager for confectionery & bakery at Ingredion, agreed in the previously mentioned Food Processing article, saying "Convenient, single-serve packs that you can grab, throw in a bag and open easily [are popular]."
Nielsen suggests that food brands that want to keep up with busy consumers need to be aware of three key trends: Freshness, product offerings that taste good and are healthy, and convenience.
Clarkston Consulting has this to say: "Manufacturers need to be more nimble and open their innovation engine to fully understand and connect with their consumers. Those who are flexible to incorporating protein and other flavors or ingredients that are in high demand will be able to better compete for valuable retail shelf space and market share."