BOSTON — As consumer eating patterns change, ready-to-eat (R.-T.-E.) breakfast cereal sales are taking a hit and more breakfast alternatives are coming into play, according to a new report from Lux Research, a Boston-based market research provider.
In its report, “Cereal loses crunch as breakfast alternatives take over,” Lux Research said the rate of growth of cereals has been on the decline since 2007 and has struggled since a 2011 peak of $8.5 billion. The main reason, according to Lux Research, is the younger population has begun to embrace other breakfast alternatives. In 2014, when sales of breakfast cereals dropped for the fourth year in a row, yogurt sales exceeded $7 billion and snack bars topped $5.5 billion, revealing a generational shift, Lux Research said.
|Joice Pranata, associate at Lux Research|
“The need for greater convenience, changing social mores and an increasingly mobile workforce are changing the definition of breakfast,” said Joice Pranata, associate at Lux Research and lead author of the report. “With the drive toward ‘natural’ and ‘healthy’ choices, there’s also greater opportunity for experimentation with new breakfast alternatives.”
Lux Research analysts noted several significant findings, including:
• Demographic shifts are causing market upheaval. Fundamental demographic shifts are part of changes in consumer choices, Lux Research found, and declining birth rates and later marriages in western economies have eroded the base of the population pyramid. Lux Research also found half of the consumers in the 2-11 age group have shifted away from traditional breakfast cereals.
• More than 7,000 snack bars in the marketplace. The R.-T.-E. cereal category now faces significant competition from makers of cereal bars, fruit bars, granola or muesli bars, and energy and nutrition bars. Sales of these types of bars have more than tripled, to more than $5.5 billion in 2014 from $1.8 billion in 2003, according to Lux Research.• Yogurt sales are spurred by health concerns. Yogurt is another product category eating into R.-T.-E. cereal’s segment sales. Yogurt consumption in the United States increased at an average of 6.1% annually from 2004 to 2015, according to Lux Research, driven by the products’ nutritional platform as a source of protein and as a probiotic. Yogurt also has the ability to deliver other health functionalities such as vitamin K2 and omega-3 fatty acids.