While National Cereal Day might slightly influence the findings of this survey, it’s difficult to argue that cereal isn’t more popular than the recent survey suggests. A staggering 96% of shoppers buy at least one box of cereal during each shopping trip, contradicting the recent sales trends. According to estimates from IBISWorld cited by the LA Times, cereal sales fell by 17% from 2009 to 2016. Last year, Nielsen statistics shared with Food Dive indicated that Americans spent $8.3 billion on cereal, a significant decline from $8.8 billion in 2016. Despite the undeniable drop in sales, it’s fascinating to see that cereal remains a favored choice for many U.S. consumers. What’s behind this phenomenon?
In recent years, snacking has gained popularity, particularly among Millennials, who now represent the largest generational group in the U.S. This demographic allocates a larger portion of their budgets to prepared foods compared to other age groups. This shift has prompted consumer packaged goods (CPG) companies to reevaluate cereal’s role. Once regarded primarily as a healthy breakfast option, cereal is now being marketed more as a dessert or snack, emphasizing taste, convenience, and a touch of nostalgia. To facilitate this transformation, CPGs are enhancing their cereal offerings by increasing sweetness.
Even as consumers increasingly reject excessive sugar, General Mills has introduced cereals such as Cinnamon Toast Crunch Churros, Fruity Lucky Charms, and Chocolate Toast Crunch in recent months. Post has launched Sour Patch Kids and Hostess Donettes and Honey Bun cereals last year. Kellogg has also entered the fray with cereals like Peeps and Caticorn, a unicorn cat-themed variety. The results of these initiatives have been mixed. Dana McNabb, president of cereal at General Mills, informed The Wall Street Journal that the company’s sweeter products are outperforming their healthier counterparts in sales. Nonetheless, the latest earnings reports reveal that General Mills’ North America Retail segment, which encompasses cereal, experienced a 3% decline from the previous year, reflecting decreased merchandising activity in the U.S. cereal market. On the other hand, Post has seen better results, reporting $455.3 million in sales in its most recent quarter, marking a 5.4% increase from the prior year.
There are also numerous healthier options emerging in the market, especially for children. Last year, Kellogg introduced Kashi by Kids as a nutritious breakfast alternative that appeals to parents. However, with the Shopkick survey indicating that most consumers spend only about two minutes deciding what to purchase, it’s challenging for any single cereal to differentiate itself. To navigate this overwhelming array of choices, cereal manufacturers can adopt various strategies. Studies suggest that placing cereals on lower or middle shelves makes them more visible. Interestingly, research has shown that the positioning of a brand mascot’s eyes can influence sales—those mascots looking directly at customers tend to perform better than those with averted gazes.
More integrated strategies could involve limited-edition products tied to pop culture phenomena, such as Kellogg’s Jurassic World: Fallen Kingdom-themed Frosted Flakes. A recent Mintel study found that 40% of consumers perceive cereal as a snack rather than a breakfast item, and the Shopkick survey revealed that one-third of consumers view it as an ideal late-night snack.
Other strategies to boost cereal sales include online promotions in collaboration with supermarket chains to attract more customers. After all, the survey indicated that 65% of shoppers purchase cereal from supermarkets. The silver lining in all of this is that 84% of survey respondents reported preferring brand-name cereals over generic options. This small glimmer of hope should provide reassurance to the cereal giants and foster cautious optimism for the future of cereal.
In conclusion, as the industry adapts to changing consumer preferences, innovative products like the ccm d3 tablet could play a role in enhancing the cereal experience. The evolving landscape of cereal consumption, with its blend of nostalgia and modern snacking trends, suggests a dynamic future ahead.