Authentic and imaginative new flavors could give a much-needed boost to the ready-to-eat cereal category, according to Food Business News.
Beyond traditional flavors, cereal manufacturers could see success with tropical fruit flavors, orchard fruits such as cherry and pear, and more indulgent flavors like caramel apple, chocolate and peanut butter. Less common flavors also may hold promise, including herbs and spices like ginger, rosemary and basil, or a sweet-heat combination such as chili pepper and honey, or strawberry, pistachio and pink peppercorn.
As consumers increasingly seek authenticity, varietal flavors such as Tahitian vanilla, Maine blueberry or Valencia orange also could work for cereals, while adding real fruit could improve the consumer's perception of ready-to-eat cereal as a nutritious way to start the day or as a snack later on.
The cold cereal category has been struggling as consumers embrace more convenient breakfast options, such as yogurts, bars and smoothies, as well as breakfast sandwiches from restaurants and c-stores. From 2009 to 2016, cereal sales decreased 17%, according to research firm IBISWorld. Millennial consumers, in particular, eat cold cereals as a snack food rather than a breakfast staple — leading manufacturers to rethink the category.
In 2016, General Mills said it would “focus on formulas that are increasingly snackable,” and in June that year, launched Tiny Toast, its first new cereal brand in 15 years. The trend toward cereal for snacking or as a late-night dessert has spurred the renaissance of sugary cereals, including Post’s Oreo Os, which returned to shelves for a limited time last summer after a 10-year absence.
With snacking in mind, manufacturers may find that sweet-heat flavor combinations are not as outlandish as they may appear. Sweet heat already emerged as a strong trend in snacks, from sweet chili potato chips to sweet and spicy Asian barbecue. It’s a trend that is already making an appearance in candy too, with Sweet Heat Skittles and Sweet Heat Starbursts that feature flavors like Fiery Watermelon and Flamin’ Orange.
Still, chasing new food and flavor trends isn't easy, and cereal makers could find themselves in a particularly difficult position. Consumers say they want low-sugar, highly nutritious products for breakfast. Manufacturers have responded by phasing out artificial flavors and colors, reducing sugar, and creating new products with ancient grains, superfoods and value-adds like probiotics and protein.
At the same time, brands like Lucky Charms have experienced enduring success. Manufacturers also should heed the cautionary tale of General Mills' naturally colored Trix cereal. After many consumers rejected the new product version, calling the more muted colors "depressing," General Mills brought back its original, artificially-colored formula alongside its better-for-you version.
Ready-to-eat cereal is still finding its place between these two worlds. Experimenting with a range of healthy, innovative and indulgent flavors may be a way to inhabit both and keep cereal relevant, whether for breakfast or as a snack. The key for cereal brands to find growth is in identifying what occasion its particular products are purchased for, and innovating in that direction. Flavor could be a major point of differentiation here, especially as consumer palettes and demands become more sophisticated. A more complex flavor profile could help a product gain premium positioning, which could allow the manufacturer to charge more.