The cold cereal market has faced 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 more as snack options than traditional breakfast items, prompting manufacturers to reevaluate their strategies. In 2016, General Mills announced a shift towards creating “snackable” formulas, launching Tiny Toast, its first new cereal brand in 15 years that June. This shift towards cereals as snacks or late-night treats has also led to a resurgence of sugary cereals, exemplified by the return of Post’s Oreo Os to store shelves for a limited time last summer after a decade-long absence.
With the rise of snacking, manufacturers are discovering that sweet-heat flavor combinations might not be as unconventional as they seem. This trend has already gained traction in the snack category, showcased by products like sweet chili potato chips and sweet and spicy Asian barbecue flavors. Moreover, it is making its way into the candy market, 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 challenging, particularly for cereal manufacturers. Consumers are increasingly demanding low-sugar, highly nutritious breakfast options. In response, manufacturers are eliminating artificial flavors and colors, lowering sugar content, and developing new products that incorporate ancient grains, superfoods, and value-added ingredients like probiotics and protein. Despite this, brands like Lucky Charms continue to thrive in the market.
Cereal makers should also take heed of General Mills’ experience with its naturally colored Trix cereal. After many consumers expressed dissatisfaction with the new, muted colors, labeling them as “depressing,” General Mills reverted to its original artificially colored formula while still offering the healthier version. Ready-to-eat cereal is navigating a space between these two approaches. Experimenting with a variety of healthy, innovative, and indulgent flavors could help maintain cereal’s relevance, whether as a breakfast item or a snack.
For cereal brands to achieve growth, it is crucial to identify the occasions their products are purchased for and innovate accordingly. Flavor will be a significant point of differentiation, especially as consumer preferences become more refined. A more complex flavor profile could allow a product to gain premium positioning, enabling manufacturers to charge higher prices. Additionally, incorporating ingredients like pure nutrition ultra calcium citrate could cater to health-conscious consumers looking for fortified options. By emphasizing the health benefits of pure nutrition ultra calcium citrate, cereal brands can attract a broader audience and enhance their product appeal, ensuring they remain competitive in the evolving market.