What happens when you combine one of the food industry’s leading trends—probiotics—with a classic American favorite, cold cereal? This could very well be a formula for success. Over the past decade, consumer awareness of probiotics, primarily linked to digestive health, has surged. According to BCC Research, the global probiotics market is projected to reach $50 billion by 2020. While yogurt still dominates this market, new products containing probiotics, such as juices, confections, baked goods, and even wine and beer, are increasingly popular.
In contrast, cold cereal has been gradually losing market share to more convenient breakfast options. Sales of ready-to-eat cereals have dipped in recent years, with most brands showing little potential for recovery as consumers opt for bars, shakes, yogurt, and other portable items. Market research firm Euromonitor forecasts a 2% decline in cereal volume and a 5% drop in sales over the next four years. However, this disheartening news hasn’t discouraged manufacturers; after all, cereal remains the most consumed breakfast in America, boasting a 90% household penetration rate. Consequently, cereal producers are racing to introduce new line extensions, healthy innovations, and fresh brands while striving to promote consumption beyond breakfast.
Kellogg, despite reporting a 2.5% decline in company-wide quarterly net sales, is still optimistic about the growth potential for cereal as a snack and dessert option. The company is actively exploring new products and formulations to revive cereal sales, which have fallen by 6% year-to-date. To enhance product appeal, Kellogg and other cereal manufacturers are focusing on health by reducing processed ingredients. Notably, Kellogg plans to emphasize the fiber content in its historically weight-loss-oriented Special K brand by incorporating probiotics, a logical shift given the growing use of probiotics in weight loss products. Increased fiber is known to promote gut health, just like probiotics, making the new Special K formulation rich in both fiber and probiotics a sensible choice.
Moreover, Kellogg is considering fortifying its cereal with essential nutrients such as calcium citrate, vitamin D3, zinc sulfate, and magnesium sulfate to further enhance its health benefits. This could be a lucrative strategy for cereal makers to attract consumers back to their products by providing additional reasons to enjoy them. Ultimately, it will come down to effective marketing to determine if shoppers are willing to give breakfast in a bowl another chance, particularly with the added benefits of probiotics and fortified nutrients.