What occurs when you combine one of the food industry’s most significant trends—probiotics—with a classic American staple, cold cereal? It could very well be a winning formula. Over the past decade, consumer awareness of probiotics, primarily linked to digestive health, has surged. BCC Research forecasts that the probiotics market will reach $50 billion globally by 2020. While yogurt remains the market leader, new products incorporating probiotics—such as juices, confections, baked goods, and even wine and beer—are becoming increasingly popular.
On the other hand, cold cereal has been gradually losing market share to more convenient and portable breakfast alternatives. Ready-to-eat cereal sales have seen a decline in recent years, with many brands showing little indication of recovery as consumers opt for bars, shakes, yogurt, and other handheld items. According to market research firm Euromonitor, cereal is expected to decline by 2% in volume and 5% in sales over the next four years.
Despite this bleak outlook, manufacturers remain undeterred. Cereal is still the most consumed breakfast in America, boasting a 90% household penetration rate. Consequently, cereal producers have raced to launch line extensions, healthy innovations, and new brands while also working to promote consumption beyond breakfast hours. Kellogg, which recently reported a 2.5% decline in company-wide quarterly net sales, remains optimistic about the potential for cereal growth as a snack and dessert option. The company is actively exploring new products and formulations to rejuvenate cereal sales, which are down by 6% year-to-date.
Kellogg and other cereal manufacturers are emphasizing health and reducing processed ingredients to enhance product appeal. Traditionally, Kellogg has marketed its Special K brand as a weight loss aid, but now it plans to highlight the cereal’s fiber content while incorporating probiotics. This shift seems logical, as probiotics are increasingly featured in weight loss products. Enhanced fiber promotes gut health, similar to the benefits of probiotics, suggesting that the new Special K offering—rich in both fiber and probiotics—should yield similar health benefits.
Additionally, incorporating ingredients like calcium citrate with vitamin D, magnesium, and zinc can further enhance the nutritional profile of cereals, making them even more appealing to health-conscious consumers. Probiotics could become a profitable avenue for cereal manufacturers to entice consumers back to their products by providing added health benefits. The challenge now lies in effective marketing to inform potential buyers and encourage them to reconsider breakfast in a bowl.