BOCA RATON, FLA. — Several factors have driven a retreat from ready-to-eat cereal, according to the Kellogg Co. A decline in milk consumption, a rise in traditional protein sources, such as Greek yogurt and eggs, and expanded breakfast options all have reshaped the morning meal landscape.
“The other thing that is really affecting the category overall is this notion of unconscious migration,” said Michael Allen, president of the U.S. Mornings Foods business, during a Feb. 19 presentation at the Consumer Analyst Group of New York conference in Boca Raton. “And this is this notion that consumers don’t necessarily realize — they are eating one less bowl a week, as an example.”
Ready-to-eat cereal has remained relatively stable over the past decade, and the category in usage occasions still trumps other breakfast items, including fruit, eggs and hot cereals, Mr. Allen said. In approximately 90% of households, cereal has about three times the penetration of Greek yogurt.
Also benefitting the category are the demographics of core consumers of cereal: younger families and aging boomers, both of whom represent large segments of the population.
“So, what we realize when we look at the evolution of the breakfast occasion and all the needs that are desired and the scale that cereal brings to that, as well as the household penetration, is we need to win in breakfast, and we are going to do that with cereal,” Mr. Allen said. “Cereal is still the majority of that breakfast occasion.”
In addition to investing behind core product lines of Special K, Mini-Wheats and Frosted Flakes, the company is activating Kellogg as a master brand.
“So, when you look at Kellogg as a brand versus a sub-brand, like a Special K or Mini-Wheats, Kellogg as a brand is synonymous with U.S. consumers as breakfast; it’s synonymous as cereal,” Mr. Allen said.
Part of Kellogg’s plans to push the nutritional advantages of cereal includes touting the protein benefits of milk.
“As an example, one bowl of Mini-Wheats with a cup of low-fat milk actually has more protein than Greek yogurt,” Mr. Allen said. “These are the kinds of things that we need to make sure consumers understand the benefits of cereal as a category.”
The company also seeks to drive consumption beyond the morning day part, for example, by positioning products as a late-night snack.
“Thirty per cent of consumption is outside of the morning day part; about 10% of that is used for recipes,” Mr. Allen said.
Innovation, too, figures into Kellogg’s cereal revival efforts. Non-G.M.O. Project-verified GoLean Crunch, new varieties of Bear Naked granola and Special K Chocolate Almond are among new offerings that promise multiple consumer benefits.“We always need to build food that is consistent with what consumers want and have a nutritional benefit,” Mr. Allen said.