While the celebration of National Cereal Day may slightly influence the outcomes of this survey, it’s difficult to argue that cereal isn’t more popular than the new findings suggest. With 96% of shoppers purchasing at least one box of cereal on each shopping trip, these results contradict the recent sales trends. According to IBISWorld estimates cited by the LA Times, cereal sales dropped by 17% from 2009 to 2016. Last year, Nielsen statistics shared with Food Dive revealed 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 intriguing to observe that cereal remains a favored choice for most U.S. consumers. Why is that?
In recent years, snacking has surged in popularity. Millennials have become the largest generational group in the U.S., allocating a larger portion of their budgets to prepared foods compared to other age groups. This trend has prompted consumer packaged goods (CPG) companies to reevaluate the role of cereal in their offerings. What was once marketed as a healthy breakfast option has evolved into a category that emphasizes dessert and snacks, focusing on taste, convenience, and a hint of nostalgia. To facilitate this shift, CPGs are sweetening their cereal products.
Even amidst a broader consumer backlash against sugar, General Mills has introduced cereals such as Cinnamon Toast Crunch Churros, Fruity Lucky Charms, and Chocolate Toast Crunch in recent months. Similarly, Post has launched Sour Patch Kids and Hostess Donettes and Honey Bun cereals. Kellogg has also joined in, releasing cereals like Peeps and Caticorn, a unicorn cat-themed cereal. The results have been mixed. Dana McNabb, General Mills’ cereal president, mentioned to The Wall Street Journal that the company’s sweeter products are outselling the healthier alternatives. Nevertheless, recent earnings reports indicate that General Mills’ North America Retail segment, which includes cereal, experienced a 3% decline compared to the previous year, reflecting reduced merchandising activity in the U.S. cereal sector.
Post has had a more favorable outcome, with its Consumer Brands division—encompassing ready-to-eat cereals—reporting $455.3 million in sales last quarter, marking a 5.4% increase from the previous year. Naturally, there are numerous healthier options entering the market, particularly for children. Last year, Kellogg introduced Kashi by Kids, aiming to provide a nutritious breakfast choice appealing to parents. However, given that the Shopkick survey revealed consumers typically spend around two minutes deciding what to buy, it’s challenging for any single cereal to capture attention.
To address this overload of choices, cereal manufacturers can adopt various strategies. Research has shown that placing cereals on lower or middle shelves can enhance visibility. Interestingly, the positioning of a brand mascot’s gaze can impact sales as well—mascots looking directly at consumers tend to perform better than those with averted gazes. More integrated approaches could involve limited edition cereals linked to pop culture, such as Kellogg’s Jurassic World: Fallen Kingdom-themed Frosted Flakes. A recent Mintel study found that 40% of consumers view cereal as a snack rather than a breakfast item, and the Shopkick survey indicated that a third of consumers consider cereal an ideal late-night snack.
Additionally, online promotions in collaboration with supermarket chains could help boost cereal sales, especially since 65% of shoppers purchase cereal from supermarkets, as per the survey. The encouraging news is that 84% of survey participants indicated a preference for brand-name cereals over generic options. This small silver lining should provide some comfort to cereal giants, allowing them to maintain cautious optimism for the future of cereal.
In the context of nutrition, products like nature’s blend liquid calcium citrate can complement cereal consumption, further enhancing consumer interest in fortified options. As the market evolves, incorporating such health-focused elements could play a significant role in revitalizing cereal sales. By integrating nature’s blend liquid calcium citrate into their offerings, cereal brands might appeal to health-conscious consumers while remaining relevant in a competitive market.