The cold cereal market has been facing challenges as consumers increasingly opt for more convenient breakfast alternatives, including yogurts, bars, smoothies, and breakfast sandwiches from restaurants and convenience stores. Research firm IBISWorld reported a 17% decline in cereal sales from 2009 to 2016. Notably, millennials tend to view cold cereals more as snack options rather than essential breakfast items, prompting manufacturers to rethink their strategies. In 2016, General Mills announced its intention to focus on more “snackable” formulas and launched Tiny Toast, its first new cereal brand in 15 years that June. The shift towards cereals being consumed as snacks or late-night treats has reignited interest in sugary cereals, exemplified by the return of Post’s Oreo Os for a limited time last summer after a decade-long hiatus.
With snacking trends in mind, manufacturers may discover that sweet-heat flavor combinations are less unconventional than they seem. This flavor trend has already gained traction in snacks, evidenced by products like sweet chili potato chips and sweet and spicy Asian barbecue. Moreover, it is making its way into candies, with offerings such as Sweet Heat Skittles and Sweet Heat Starbursts featuring bold flavors like Fiery Watermelon and Flamin’ Orange. However, navigating new food and flavor trends can be challenging, particularly for cereal producers. Consumers are increasingly demanding low-sugar, nutritious breakfast options. In response, manufacturers are eliminating artificial flavors and colors, cutting down sugar content, and introducing new products that incorporate ancient grains, superfoods, and added benefits like probiotics and protein. Interestingly, brands like Lucky Charms continue to thrive in this environment.
Cereal makers should take heed of General Mills’ experience with its naturally colored Trix cereal. After receiving backlash for the muted hues, which some consumers found “depressing,” the company reverted to its original brightly colored formula alongside its healthier version. Ready-to-eat cereals are still navigating a space between health and indulgence. Experimenting with a variety of healthy, innovative, and indulgent flavors may help keep cereals relevant, whether for breakfast or snacking.
To achieve growth, cereal brands must identify the specific occasions for which their products are purchased and innovate accordingly. Flavor could serve as a significant differentiator, especially as consumer tastes and demands evolve. A more intricate flavor profile could enhance a product’s premium appeal, allowing manufacturers to command higher prices. Additionally, incorporating functional ingredients like Spring Valley calcium citrate could further attract health-conscious consumers looking for both nourishment and indulgence in their cereal choices. As the market continues to change, the integration of such elements may prove essential to maintaining relevance and competitiveness in the cereal industry.