Consumers are demanding more and less from their cereals today, especially in the areas of more functional benefits and less sugar.
"More and more, American consumers are now requesting better-for-you, convenient products that fit their nutritional needs and their lifestyles," said Susanne Norwitz, spokesperson for The Kellogg Co., Battle Creek, Mich. "We strive to offer a variety of product innovations to meet consumers’ diverse health needs such as digestive health, heart health and shape management."
For digestive health, Kellogg has the All-Bran line, and the newest addition to the line, All-Bran Strawberry Medley. Digestive health is also the main driver behind LiveActive cereal from Kraft Foods Inc., Northfield, Ill. The cereal is offered in two varieties and has 3 grams of the prebiotic fiber inulin per serving.
The Smart Start line from Kellogg is marketed for heart health as it contains oat bran and potassium, which may help lower cholesterol and blood pressure. The newest variety is Smart Start Strawberry Oat Bites, which has whole oat squares with strawberry flavor. The Special K line is marketed for weight management with Special K Cinnamon Pecan being the latest introduction.
Kellogg also recently introduced Kellogg’s Frosted Mini-Wheats Blueberry Muffin cereal, which is designed to appeal to the taste of blueberry muffins when consumers don’t have the time to bake.
Mark Izzo, associate director of scientific and nutrition affairs for Post Foods, said the category as a whole is relevant in today’s economy as an inexpensive meal option. Post even has noticed a rise in overall cereal sales in recent months during this period of economic downturn.
"The biggest factor driving today’s cereal market is the combination of taste, nutrition and value that cereal as a food group is really pretty unique in providing," Mr. Izzo said.
For Post, Honey Bunches of Oats, which was first introduced in 1989, has been driving growth.
In terms of being conscious of sugar content, Mr. Izzo said Honey Bunches of Oats delivers taste with sugar content that is 30% to 40% lower than more traditional sweetened cereals. He said the recently introduced Honey Bunches of Oats with Real Chocolate Clusters is an example of this as it offers chocolate taste along with nutritional benefits at moderate sugar levels.
"Our product developers continue to be focused on coming up with the best tasting and most nutritionally balanced product offerings for the market," Mr. Izzo said. "What we will do is focus on new ways to deliver natural, wholesome sweetness at moderate sugar levels in addition to refocusing on the benefits of products like Post Raisin Brain and the natural sweetener power that comes from raisins."
Mr. Izzo said the Shredded Wheat brand appeals to a variety of consumers as it has a variety of products from an unsweetened cereal to a sweetened cereal such as Honey Nut Shredded Wheat and Frosted Shredded Wheat.
"Taste is still a huge driver of cereal consumption, but (consumers) want to feel good about it," Mr. Izzo said.
To make consumers feel good about the products, Post has worked to add functional benefits to its products as well. Mr. Izzo said the company has reformulated and reintroduced its Alpha-Bits cereal with nutrients (iron, zinc and choline) to help support brain development.
"Consumers are increasingly looking for some more sophisticated health benefits in cereals perhaps tailored to their particular age or state of health," Mr. Izzo said. "It does make sense for consumers that a type of food that is inherently good for you, like cereal, is where they would look for these more specific benefits."
Mr. Izzo said the future in the cereal market will be in taking traditional brands and extending them. For example, Post has taken the Grape-Nuts brand and expanded it with a new product, Post Trail Mix Crunch, which appeals to sweet taste and wholeness. It takes the Grape Nut product and adds granola and oat clusters, cranberries, almonds and fiber sticks for variety, taste and nutrition. As another product extension, because consumers said they enjoyed oat clusters, Post has introduced Honey Bunches of Oats Just Bunches, which is exclusively the oat bunches from the cereal.
Mr. Izzo said digestive health and wellness will be a significant area of development in the future for the Post brand, and the current efforts in this area are through Raisin Bran. Post noted cereals with clusters and chocolate are both on trend with the ready-to-eat category.
Traditional cold cereals are not the only area of development in the category. In terms of hot cereals, the Simple Harvest line from Quaker Oats, a brand of PepsiCo, Inc., Purchase, N.Y., has had recent success with flavors such as vanilla, almond and honey.
General Mills, Inc., Minneapolis, recently introduced Fiber One toaster pastries as a way of offering the fiber benefits of the traditional cereal in another format. General Mills also has expanded its Total line, and it now includes cinnamon crunch, whole grain, raisin bran, honey clusters and cranberry crunch flavors.
As in all categories, the trend toward organic has taken hold. Particularly notable is Bear Naked, La Jolla, Calif., a subsidiary of Kellogg, with its 100% organic hot cereal and its granola products. In addition, General Mills has the Cascadian Farm brand with cereals such as Cinnamon Raisin Granola, Clifford Crunch, Hearty Morning and Honey Nut O’s.
Appealing to children
The vast majority of children — 97% of children ages 6 to 11 and 84% of those ages 12 to 17 — said they eat cold cereal, according to a 2007 Mintel International survey. Many products for children traditionally have been high in sugar, although companies are limiting what products they market to children based on nutrition criteria.
Kellogg, for example, has reformulated various cereals, including Froot Loops, Corn Pops, Rice Krispies, Cocoa Krispies and Apple Jacks to meet standards of no more than 12 grams of sugar per serving among other nutrition criteria. Kellogg will no longer market products that don’t meet these nutrition standards to children under 12 beginning in 2009.
General Mills has similar established standards and policies when it comes to advertising to children.
"Manufacturers have attempted to cut sugar from popular cereals, but it may be more fruitful to take a different tack — to develop new kid-focused cereals that are low in sugar rather than to try to tinker with the well-established recipes of popular high sugar cereals, which are familiar to children and which are enjoyed because of their taste," Mintel said. "Kids are quick judges of flavor and are likely to reject a ‘new improved’ version of a beloved classic if the new product does not taste the same. Completely new products expressly for children stand a better chance of being accepted because they will be recognized as tasting good without being compared to a product they are replacing."
Cereal market by the numbers
Consumers are still eating plenty of cereal. A 2007 Mintel study found 87% of survey respondents said they eat cereal, with 52% of respondents saying it was their top breakfast choice.
According to Mintel, ready-to-eat cold cereals represented 88% of the overall breakfast cereal category with hot cereals representing 12%. Also in 2007, Kellogg had 34% of cereal market share, with General Mills taking 25% and Kraft claiming 20%. At the time, Kraft owned the Post line.
According to the Global New Products Database from Mintel, there were 428 new breakfast cereal introductions in the United States in 2007, which was up from 386 in 2006. In 2008 through July 30, there were 386 new cereal introductions. Mintel forecasts the market to reach $9,041.7 million by 2012.
According to Information Resources, Inc., total sales in the ready-to-eat cereal category for the year ended Oct. 5 in categories excluding Wal-Mart Stores, Inc. was $6,517,901,000, up 3% from the previous year. Total sales for the hot cereal/oatmeal category were $891,316,900, down slightly from the previous year.
This article can also be found in the digital edition of Food Business News, November 11, 2008, starting on Page 1. Click