- Post Holdings is expected to acquire Weetabix, a top British cereal brand, according to The Telegraph.
- Weetabix is the second largest cereal brand in the U.K., according to Euromonitor, and has been owned by Shanghai-based Bright Food for the last five years.
- The cereal never took off in China, as Chinese consumers prefer hot breakfasts like congee and dum sum.
Just this week, in a rare interview, Post Consumer Brands CEO Chris Neugent said the company was focused on marketing, innovation and seeking out efficiencies within the business. He also referred to Post Holdings as being “an acquisition-driven company” and hinted that new deals could happen sooner rather than later.
This kept analysts from being too shocked when the company announced it was looking to buy Weetabix. The U.K. brand has seen profits fall and sales decline, but that didn’t keep other cereal companies from showing interest. Reports indicate Associated British Foods, General Mills and Nestle all checked in on the brand recently.
Cereal hasn’t been the most innovative category, and has seen sales declines as of late. Still, the category rakes in billions each year, and savvy cereal makers have gradually rolled out new formulations with added protein, fiber and whole grains to draw consumers back to the cereal aisle. According to a recent survey from market research firm Mintel, 40% of millennial shoppers believe pouring a bowl of cereal is too much work and are giving up cereal for breakfast bars, shakes and other on-the-go breakfast solutions. This has prompted brands to roll out new on-the-go cereal applications, and even provide recipes for how to incorporate branded cereal in burrito bowls and French toast.
Post's acquisition of Weetabix suggests confidence in the cereal market space, even as industry analysts discuss the category's impending demise. It will be interesting to see how this deal with benefit Post, as the brand has invested in applications like Weetabix On The Go breakfast drinks that cater to consumer demand for convenient morning foods.