- Kellogg has historically promoted its Special K brand to help in weight loss, but will now add probiotics to the cereal and position it as a health tool, according to the Washington Post. Special K Nourish featuring probiotics is due to hit store shelves later this year, according to information shared during Kellogg’s second quarter earnings call last week.
- “We know we have to do more to reassert [the cereal] category's health and wellness credentials. It's the adult health-oriented segment that is pulling down the category," Paul Norman, president of Kellogg North America, said during last week's call. "And the way to reinvigorate that segment has always been through nutritional innovation claims and brand-building, so that's where we're focusing our efforts."
- Cereal consumption remains soft. Kellogg’s U.S. morning foods Q2 segment sales — which is composed predominantly of cereal — were down 7% compared to the year-ago period.
What happens when you mix one of the food industry’s biggest trends — probiotics — with a long-time American favorite in cold cereal? It may just be a recipe for success.
Consumer awareness of probiotics, which have mainly been associated with digestive health, has increased dramatically during the past decade. BCC Research projects the probiotics market will grow to $50 billion globally by 2020. Although yogurt still leads the market, new probiotic-containing products such as juices, confectionery items, baked goods and wine and beer are gaining popularity.
Meanwhile, cold cereal has been steadily losing market share to other more convenient, portable breakfast foods. Sales of ready-to-eat cereals have declined during the past few years, with most brands showing little sign of rebounding as consumers reach for bars, shakes, yogurt and other handheld items. Market research firm Euromonitor projects cereal will decline 2% in volume and 5% in sales during the next four years alone.
The gloomy news has not deterred manufacturers — cereal is, after all, still the most consumed breakfast in America, with a 90% household penetration. As a result, cereal makers have raced to introduce line extensions, healthy innovations, new brands, and are working to extend consumption beyond the morning hours.
Kellogg, which recently reported a company-wide quarterly net sales decline of 2.5%, has nonetheless remained optimistic about the potential for cereal growth as a snack and dessert. The company has been busy exploring new products and formulations in an effort to revive cereal sales, which are down 6% year-to-date.
Kellogg and other cereal makers have focused on health and scaling back processed ingredients in order to boost the product's popularity. Now Kellogg, which historically has promoted its Special K brand as a weight loss tool, plans to play up the cereal’s fiber content and add probiotics. This seems like a logical transition, as probiotic use in weight loss products has become more prevalent.
Increased fiber promotes gut health, as do probiotics. It only stands to reason that the new Special K offer — high in both fiber content and probiotics — should do the same. Probiotics could prove to be a lucrative way for cereal makers to draw consumers back to their products by giving them another reason to consume it. Now, it’s a matter of marketing to get the word out to see if some shoppers are willing to give breakfast in a bowl another try.