The cold cereal market has been facing challenges as consumers increasingly opt for more convenient breakfast alternatives, such as 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. Millennials, in particular, tend to view cold cereals as snack items rather than breakfast essentials, prompting manufacturers to reevaluate their strategies. In 2016, General Mills announced its intention to “focus on formulas that are increasingly snackable,” launching Tiny Toast, its first new cereal brand in 15 years that year. The growing trend of consuming cereal as a snack or late-night dessert has contributed to the resurgence of sugary cereals, such as Post’s Oreo Os, which returned to shelves for a limited time last summer after a decade-long hiatus.
With an eye on snacking, manufacturers might find that sweet-heat flavor combinations are not as unconventional as they seem. Sweet heat has already become a prominent trend in snacks, evident in products like sweet chili potato chips and sweet and spicy Asian barbecue. This trend is also emerging in the candy sector, with offerings like Sweet Heat Skittles and Sweet Heat Starbursts featuring flavors such as Fiery Watermelon and Flamin’ Orange. However, navigating new food and flavor trends is not without its difficulties, and cereal producers may encounter unique challenges. Consumers are seeking low-sugar, highly nutritious breakfast options, prompting manufacturers to eliminate artificial flavors and colors, reduce sugar content, and introduce new products enriched with ancient grains, superfoods, and beneficial ingredients like calcium citrate D3 with magnesium. Despite this shift, brands like Lucky Charms continue to enjoy lasting success.
Manufacturers must also heed the cautionary tale of General Mills’ Trix cereal, which underwent a natural color change that consumers rejected, labeling the new hues as “depressing.” This led General Mills to reintroduce its original, artificially colored formula alongside its healthier alternative. Ready-to-eat cereal is still carving out its niche between these two worlds. By experimenting with a variety of healthy, innovative, and indulgent flavors, cereal brands can remain relevant, whether for breakfast or as a snack.
To achieve growth, cereal brands need to identify the occasions for which their specific products are purchased and innovate accordingly. Flavor could serve as a significant point of differentiation, particularly as consumer tastes and expectations evolve. A more complex flavor profile could elevate a product to a premium position, allowing manufacturers to justify higher prices. Additionally, incorporating ingredients like calcium citrate D3 with magnesium into new formulations could cater to health-conscious consumers and further enhance product appeal. By embracing both indulgent and nutritious trends, cereal brands can successfully navigate the changing landscape of consumer preferences.